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Why Next-Gen Titles Cost $60

Zonk posted more than 7 years ago | from the some-worth-more-than-others dept.

Games 241

Heartless Gamer writes "Forbes.com has up an article detailing what goes into the $60 price tag for next generation games. Publishers get about a buck per copy sold. 'The remaining $59 per game goes into many hands. The biggest portion — nearly 45% — goes toward simply programming and designing the game itself. Then the console maker, retailer and marketers each get a cut. Add in manufacturing and management costs, and depending on the type of game, a license fee. Some gamemakers also have to pay a distributor to help get their titles in stores.'"

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What about Wii? (5, Insightful)

jZnat (793348) | more than 7 years ago | (#18413859)

Then how can you explain why Wii games only cost $50 still? I blame the increased graphical power of the 360 and PS3 which increases the development costs due to the developers' (or publishers?) need to utilise all graphical power available.

Re:What about Wii? (4, Insightful)

Vandilizer (201798) | more than 7 years ago | (#18414095)

Simple you want to know why Wii games cost less!

They are the only ones who are not subsidizing the price of their consoled with the games that they are selling!

Sony takes about $150 hit they need to recap!

Pay for it now, pay for it later in the end you are still paying for it! I for one do not mind paying a bit more now to save later!

Re:What about Wii? (1)

Itchyeyes (908311) | more than 7 years ago | (#18414167)

Nintendo takes just as much a cut of the game as Microsoft and Sony do. The reason Wii games cost less is development costs, plain and simple. A game like Wii Sports, or even Twilight Princess, costs substantially less to make than something like Gears of War or Oblivion.

Re:What about Wii? (1)

Chmcginn (201645) | more than 7 years ago | (#18414209)

A game like Wii Sports, or even Twilight Princess, costs substantially less to make than something like Gears of War or Oblivion.

True... but how does the cost of porting Oblivion compare to the cost of creating Gears of War? Or even Twilight Princess, for that matter.

Re:What about Wii? (1)

Itchyeyes (908311) | more than 7 years ago | (#18414389)

First of all, Oblivion wasn't a port, it was developed for the PC and the Xbox 360 at the same time. However, developing a game for multiple systems is even higher then simply developing for one system, since in addition to the usual costs there's the cost of coding the game for the second system. Obviously, the benefit is that you get a larger install base to sell your game to, but the total cost of development is still higher.

Re:What about Wii? (0)

Anonymous Coward | more than 7 years ago | (#18415275)

The total cost is greater, but that's irrelevant. The "usual costs" (design, audio, graphics, etc) are the same whether it's for one platform or 2; the development cost per platform is less.

Re:What about Wii? (1)

Itchyeyes (908311) | more than 7 years ago | (#18415785)

It's only irrelevant for blockbuster games, where the added sales far outweigh the cost of porting to a second system. For games with more marginal sales it's a valid consideration. Porting a game to a second platform may increase the overall sales of the title, but the added cost of moving to that second platform might decrease your rate of return on your investment. From a business perspective it might be better to invest that money in another game instead of in porting an existing game. It's something that has to be calculated on a case by case basis.

Regardless, we're now moving away from the point of the argument, which was that higher costs of development for games on high end PCs and next gen consoles is a legitimate cause of higher game prices. While the cost of development for Oblivion may indeed have been mitigated by releasing it on two platforms, it was still higher than the cost of development for Morrowind which was also released on two platforms. When you compare apples to apples, games cost more to make today across the board, which is why game prices have gone up. The parent's assertion that the reason Wii games cost less because Nintendo doesn't charge a royalty is patently false. They cost less because they require fewer assets because the platform doesn't have the power to produce high end graphics, end of story.

Re:What about Wii? (1)

bendodge (998616) | more than 7 years ago | (#18415081)

That makes sense. I am a hobbyist game developer and have always found that programmers are a dime-a-dozen. Game art (esp pixel animation) is hideously expensive.

Re:What about Wii? (1)

tepples (727027) | more than 7 years ago | (#18415323)

I am a hobbyist game developer and have always found that programmers are a dime-a-dozen. Game art (esp pixel animation) is hideously expensive.
Access to platforms that encourage multiple players per screen (for game scenarios such as Gauntlet, Secret of Mana, Bomberman, and Smash Bros., which do not require that the screen be split) is even more expensive. The only open platforms (Windows, Mac, and Linux) encourage the use of 17" monitors and one $800 PC+monitor per player, not the 27" monitors and one machine per four players of the consoles.

Re: Cost =! price. (2, Insightful)

trdrstv (986999) | more than 7 years ago | (#18415191)

The reason Wii games cost less is development costs, plain and simple.

No. There is no direct correlation between development costs and consumer price.

If it did you would have non-standard prices that would vary wildly. Do you pay more to see a 'summer blockbuster' that cost 200 million dollars [to make] than an independent film that cost $5 million?

The developers have standard price points and they set their price and development budget to a level they feel they will make the most profit.

Welcome to capitalism 101.

Re: Cost =! price. (0)

Anonymous Coward | more than 7 years ago | (#18415539)

True, but pretending that cost does not influence price is an oversimplification. The amount of profit a game developer can make depends on the cost of the game and the price people are willing to pay for it. If you can lower the price (and therefore increase the number of buyers) while still making as much or more profit (due to lower costs) as you would have doing something else, then you are likely to do so.

If you think of it in terms of opportunity cost, then the pull on the seller is to equalize their total profits from game development on the consoles. (If you can make more profit on PS3 games, even at higher cost, then you are likely to switch to that, assuming you are equally capable of game development on all consoles.) The lower development costs of the Wii are reflected in lower prices, since developers can make just as much there with lower sale prices as on the PS3/XBox360.

Re:What about Wii? (3, Funny)

Kevin DeGraaf (220791) | more than 7 years ago | (#18414483)

Easy!

On!

The!

Exclamation!

Points!

There!

Dude!!!

Re:What about Wii? (1)

PrescriptionWarning (932687) | more than 7 years ago | (#18414101)

not to downplay the Wii, I think its a really fun system, but most of the games simply aren't as feature filled. Again, not saying thats a bad thing, but it certainly makes it easier to develop cheaper. I also seem to remember that some of the games are simply ports as well, such as Call of Duty.

Re:What about Wii? (4, Insightful)

MS-06FZ (832329) | more than 7 years ago | (#18414107)

Then how can you explain why Wii games only cost $50 still? I blame the increased graphical power of the 360 and PS3 which increases the development costs due to the developers' (or publishers?) need to utilise all graphical power available.
I disagree. More likely it's due to the Wii hardware's close kinship to the Gamecube. Developers familiar with the 'cube can take advantage of their existing skills - much like GBA developers could with the DS. The same applies to some extent to the PS3 and XBox 360, too, but those machines are much more distant from their predecessors in terms of capabilities.

But there's also this: in the end, they don't charge you what the game costs, they charge what you're willing to pay and then distribute the monetary yield. The Wii is an economy system, whereas the PS3 and XBox 360 are more high-end gear, (and with more "loss-leader" money to recover) so the game titles are priced to match.

Re:What about Wii? (1)

Itchyeyes (908311) | more than 7 years ago | (#18414335)

You can disagree all you like, but you'll still be wrong. Take a character model from Wii Sports and a character model from Gears of War, which one cost more to make? You can give Epic the best tools in the world and all the experience they could want with the XBox 360; it's still going to cost more to make Gears of War. You need more designers, more coders, more artists, better equipment, etc... That's just the way it works. That's the way it's been for the last 2 decades.

Re:What about Wii? (4, Insightful)

nagora (177841) | more than 7 years ago | (#18414575)

You need more designers, more coders, more artists, better equipment, etc... That's just the way it works. That's the way it's been for the last 2 decades.

You're absolutely right, and that's a big part of why I didn't buy a console for 2 decades until the Wii arrived. I want enjoyable games, not tedious movie-wannabes or, even worse, pretentious dross by programmers who want to be "artists". That approach just means sinking the budget into visuals instead of game design.

Cheap and fun beats high-definition dullness every time.

TWW

Re:What about Wii? (1)

miyako (632510) | more than 7 years ago | (#18415063)

Not to completely disreard your point, but sometimes it is substantially more difficult to create lower polygon models of things. Yes, games for more powerful systems often have more art assets- and that can correlate to more cost to pay artists- but at the same time there are certainly cases where a more powerful system means that artists and programmers don't have to spend as much time optimizing.

Re:What about Wii? (1)

Seumas (6865) | more than 7 years ago | (#18414293)

I don't get the "console makers get a cut" part. How can they require that?! I'm pretty sure Ford doesn't get a direct cut every time I fill up my tank or buy a new car stereo.

Re:What about Wii? (1)

CastrTroy (595695) | more than 7 years ago | (#18414419)

A better analogy. I don't see Dell getting a cut when PC games are sold. I don't think that the designers of the console should be entitle to anything. However, with this model Nintendo would still do well as they don't sell the console for less than it costs to manufacture, and they have a lot of first party games that sell quite well. Sony and MS would have a much harder time making ends meet if they didn't get a cut of every game.

Re:What about Wii? (3, Informative)

krlynch (158571) | more than 7 years ago | (#18415273)

I don't think that the designers of the console should be entitle to anything.

They're not "entitled" ... the companies have simply established a mutually beneficial business arrangement that you're willing to pay for when you buy a game. Nintendo sinks money into developing a console, in the interests of making money. The software company sinks money into developing a game title, in the interests of making money. The software company pays Nintendo to license the Wii name and logos for marketing and sales purposes (you know, so they can say the game is for the Wii), and to get Nintendo's technical assistance and expertise. That serves the software house's interest, as it allows them to sell more games, and hence make more money. It also serves Nintendo's interests, as they also make more money. You're free to go ahead on your own and develop and market a console game without the help of the console manufacturer ... but you aren't going to make a whole lot of money without their assistance and logos. Really, how many people are going to spend money to buy a game for a console when the box doesn't say it's for that console? Bloody few....

I don't see Dell getting a cut when PC games are sold.

In this instance, there's no mutually beneficial business arrangement that would dictate that. The correct comparison would to Microsoft getting a cut for each PC game sold. And they DO get a cut (of a kind ... I don't know if they get an actual slice of money per box), in that they license their Windows logos and tools to developers in another kind of mutually beneficial business arrangement.

Re:What about Wii? (0)

Anonymous Coward | more than 7 years ago | (#18415839)

"You're free to go ahead on your own and develop and market a console game without the help of the console manufacturer"

Except that modern consoles use encryption, digital signatures and sometimes custom disc formats to prevent unauthorised code from executing. You want to sell a PS3 game? Well, you'd better hire some bloody good reverse engineers and start building your own blu-ray plant.

P.S. Microsoft selling the odd copy of windows and visual studio to PC developers isn't really in the same league as getting 7 dollars per boxed copy... A typical game that sells half a million on 360 nets them 3.5 million bucks. A game that sells half a million on PC means the developers spent a few thousand dollars on MS software for the developer machines - which they can re-use for the next game.

Re:What about Wii? (1)

MBraynard (653724) | more than 7 years ago | (#18415379)

I don't think that the designers of the console should be entitle to anything.

The spreadsheet that is made to determine whether or not a project goes forward considers many things: both the upfront revenue and future revenue. All of this, minus costs, get calculated into a NET PRESENT VALUE.

If the net present value, minus the liscence fee that you don't think should exist, was not sufficient, the company would either not produce as good a console or not produce the console at all.

It doesn't MATTER if a company makes money on the console sale itself or makes it on the console + three games.

Re:What about Wii? (1)

Applekid (993327) | more than 7 years ago | (#18414747)

Typically, the console manufacturers will produce the games for the publishers. The fees the publisher pays for this service will vary based on how many they make and whether the title will be exclusive to the platform. In return, the manufacturer will produce the discs/cartridges and that media will work in the console. In that price is their "cut".

Re:What about Wii? (2, Interesting)

Blakey Rat (99501) | more than 7 years ago | (#18414955)

It's an interesting market. The console makers get a "cut" because they hold the keys to the car. Without using Microsoft, Sony or Nintendo's encryption on your disk, it's unplayable on their console. Slashdotters hate DRM. (And stop winging on about Nintendo being so great, the reason the Gamecube disks are so mutant is specifically to make them hard to copy.)

The console makers generally charge a fee to publish the game on their console, but then they spend this fee in additional testing and QA for the game. Microsoft has teams of people QAing non-Microsoft games to meet minimum established standards of quality. Since the publishers don't complain about this arrangement, I'm guessing that the QA service Microsoft/Sony/Nintendo provides is worth the publishing fee, but I don't know.

Re:What about Wii? (1)

larry bagina (561269) | more than 7 years ago | (#18415363)

One reason that publishers don't complain is that it helps limit competition.

Re:What about Wii? (1)

tepples (727027) | more than 7 years ago | (#18415385)

Since the publishers don't complain about this arrangement
Microstudios, which more often than not produce casual budget games, have generally got the shaft on console platforms since 1985.

PC games too (0)

Anonymous Coward | more than 7 years ago | (#18414701)

PC games are a lot cheaper too, in the UK it's not uncommon for a PC version of a game to cost half as much as the 360 version.

The article claims that the licencing fee is only about $7 - where does the rest go then?

e.g. on play.com Battlestations Midway: 18UKP vs 40UKP, Star Trek Legacy: 18UKP vs 25UKP, Oblivion: 18UKP vs 30UKP, Prey: 10UKP vs 18UKP
http://www.play.com/Games/PC/4-/478909/BattleStati ons_Midway/Product.html [play.com]
http://www.play.com/Games/Xbox360/RNR/3-/2553438/B attlestations_Midway/Product.html [play.com]
Can't be bothered to link the rest, check for yourself...

Of course, the answer is that the prices are what the market will bear. Try to charge 40UKP for a new-release PC game and people will just pirate it, whereas Gears of War has an RRP of 50UKP and people bought it.

Re:What about Wii? (1)

RyoShin (610051) | more than 7 years ago | (#18414979)

That's the main reason as far as I know. If companies kept their graphics at the height of the PS2/XBox generation, they would quickly be slammed by all video game media as having "lack-luster graphics", despite the fact that they might be able to then offer those games at $45 instead of $60.

A big reason a lot of previously-exclusive PS3 titles are going multi-platform or jumping ship altogether is because of the substantial increase in development cost for the PS3, combined with the very slow sales of the console.

Re:What about Wii? (1)

MBraynard (653724) | more than 7 years ago | (#18415155)

MS's own 360 games cost $50 still.

Something tells me... (0, Redundant)

rhartness (993048) | more than 7 years ago | (#18413863)

... that also a large chunk of this probably goes to the console maker as well. I'd be quite surprised to see that Sony (or M$) hasn't upped their licensing fees for these new systems over the last generation significantly.

Inflation (5, Insightful)

UbuntuDupe (970646) | more than 7 years ago | (#18413885)

Easier explanation:

-Why did next-gen titles five years ago cost $50?

-Now, take that answer and apply inflation for five years.

1.1^(1/5) = 1.9% per year inflation is all it takes, and it's been worse.

Re:Inflation (1)

MobileTatsu-NJG (946591) | more than 7 years ago | (#18413947)

"1.1^(1/5) = 1.9% per year inflation is all it takes, and it's been worse."

You've got a good point. It's amazing that the $50 price tag held on as long as it did. However, even a bad next-gen game still fills the DVD with textures etc. because Sony and Microsoft insist on it.

Re:Inflation (1)

ToxikFetus (925966) | more than 7 years ago | (#18413981)

It's not like $60 is an unheard of price point, either. Hell, I remember FFIII and Secret of Mana costing $60 when they came out on the SNES.

Re:Inflation (1)

Nimey (114278) | more than 7 years ago | (#18413993)

In their cases, that was because they were large games that required lots of ROM, and ROM was expensive.

Re:Inflation (1)

shotgunsaint (968677) | more than 7 years ago | (#18414535)

Absolutely correct. Nintendo kept a tight reign on the ROM supply, and since you had to buy it from Nintendo to make a NES licensed game, they stayed expensive. I remember paying $75 for Final Fantasy III (6) back in middle school. Funny that I'd have more disposable income then than now.

Re:Inflation (1)

grumbel (592662) | more than 7 years ago | (#18414817)

ACK, back when the SNES was up to date basically all third party titles cost around 65EUR over here, some even up in the 75EUR, only some first party titles where sold at 50EUR and even then those prices aren't adjusted to inflation. If video games actually would adjust to inflation we would probably pay around 100EUR today.

There is really nothing to complain about the current prices, even if one doesn't like the 60EUR price tag, there are a ton of used games out there and all those cheap platinum/classic rereleases, which weren't available back then either.

Re:Inflation (1)

Senobyzal (826207) | more than 7 years ago | (#18414063)

Hell, I remember paying $50 for Genesis titles back around 1990. That's almost $80 in today's money.

oops :-( (1)

UbuntuDupe (970646) | more than 7 years ago | (#18414401)

Sorry, that calculation was for 10% over 5 years. It actually increased 20%. (10/50) Still, they've been steady at $50 for about ten years, so the surprise is why it didn't increase sooner.

Re:oops :-( (1, Funny)

Anonymous Coward | more than 7 years ago | (#18414921)

That's okay, you can probably blame it on the bootloader.

Re:Inflation (1)

Hotawa Hawk-eye (976755) | more than 7 years ago | (#18414481)

$50*(1.019^5) is about $55. 1.2^(1/5) is about 3.7% and $50*(1.0371^5) is about $60.

Re:Inflation (0)

Anonymous Coward | more than 7 years ago | (#18414655)

hell, I remember $50 Wii games? So, Nintendo is immune to inflation, while the Xbox360 and PS3 are prime victims? BS, it is pure and simple greed. Look at other media, DVD movies for example. Costs have stayed almost the same, and have actually probably come close to going down on average. You cannot tell me inflation ignored the movie industry. You also cannot tell me that movies became cheaper to produce in the last five years either. Like I said, this boils down to one thing...GREED.

Re:Inflation (1)

JLennox (942693) | more than 7 years ago | (#18414951)

But this ignores the cost reduction as optical media becomes cheaper to manufacture (Blu-Ray may have an argument, but DVD does not) as well as the costs of the ROMs to construct those old carts.

Re:Inflation (1)

poot_rootbeer (188613) | more than 7 years ago | (#18415203)

-Why did next-gen titles five years ago cost $50?
-Now, take that answer and apply inflation for five years.


It's not that simple, or else Atari 2600 games would have retailed for under $10.

Come to think of it, they DID, after the industry collapsed. I know MY cartridge collection, for one, grew substantially circa 1984 as retailers attempted to liquidate their remaining stock.

Bull (0, Flamebait)

AliasTheRoot (171859) | more than 7 years ago | (#18413893)

The publisher makes a hell of a lot more than $1 a title, and the money certainly doesn't go to the developer. The retailers take a huge chunk of it. Realistically speaking, the publisher takes the lionshare of the profit - and uses that to cover the advances made to the developer.

The reason games cost $60 is nothing to do with the cost of manufacturing anyway, the console manufacturers run a cartel and have agreed these prices.

Re:Bull (1)

j00r0m4nc3r (959816) | more than 7 years ago | (#18414009)

The publisher makes a hell of a lot more than $1 a title

Yeah, especially when they doctor their books so that the $1mil they were supposed to spend on marketing and PR went straight into their own pockets, and when they massage sales figures so they don't have to pay the developers what's fair. Publishers are a dirty dirty breed. Their entire business model pretty much falls apart if you remove the corruption.

Re:Bull (1)

Nimey (114278) | more than 7 years ago | (#18414039)

OK, show your research proving this. You have research, don't you?

Re:Bull (1)

Tickenest (544722) | more than 7 years ago | (#18414069)

The extensive supporting documentation and sourcing you have included with your argument makes it all the more compelling. Perhaps you have a newsletter to the likes of which I may wish to subscribe?

Re:Bull (1)

Itchyeyes (908311) | more than 7 years ago | (#18414071)

Source? Unless you've got something to back it up, I think I'll believe the story from a reputable business magazine over an anonymous message on the Internet.

Re:Bull (1)

Canthros (5769) | more than 7 years ago | (#18414317)

From the article: 45% of revenue goes to development costs of various sorts: art, programming, engineering, design, etc. Everything that it takes to get from having nothing at all to having a salable product. Retailers get about 20%, or $12. Of the retailer's $12, at least $11 goes to cover various operating costs associated with having a storefront. That shouldn't be a surprise: it's been known for a while now that videogames are a loss leader for many stores, and that the real money in video game sales is in used games, not in new ones.

There's another 11.5% in console licensing fees. The article implies that these may be waived for exclusivity of the title. I'd bet the fee varies depending on which console you're looking at, but it's probably comparable across the board. Marketing will eat up another 12% of the revenue, licensing an additional 5% (expect that amount to wind up in the marketing budget if the property is original), packaging 5%, publisher and distributer 3% between them (about a buck each per unit sold, it looks like), management and corporate overhead .3% and hardware development costs .05%. Retailers take a large chunk, but it's not the largest chunk.

The point at which a developer can rake in money on their own is when they successfully establish an original property. When that happens, they get the smaller marketing budget associated with a licensable property, but they're essentially licensing it from themselves, so they can pocket that 5% that would otherwise go to, e.g., LucasArts or Marvel Entertainment.

Re:Bull (1)

A Name Similar to Di (875837) | more than 7 years ago | (#18414471)

The retailers take a huge chunk of it.

I know I only have anecdotal evidence on this one, but I don't think retailers take a huge chunk of it. About 8 years ago I worked at CompUSA (it was my first job). The employees got their purchases at cost which we could look up. While I got a nice discount on some hardware, I was disappointed to see that cost for most $50 games was about $47. In fact, when the store would put new games on sale in their weekly flier for $45, most of the employees jumped on the sale as well as the store was selling at a loss to draw more customers through the door.

Now that was a long time ago, but I doubt that the retailers have managed to somehow carve a bigger chunk out of the price for themselves.

Cute (1)

MobileTatsu-NJG (946591) | more than 7 years ago | (#18413895)

I click on a link to an article of why game prices have gone up and I get a full-page ad asking me to compare various sports cars.

Beats the music industry (1)

pipatron (966506) | more than 7 years ago | (#18413973)

If the programmers and actual developers get 45% of the remaining $59, it beats the music industry content creators by a magnitude or more.

Re:Beats the music industry (0)

Anonymous Coward | more than 7 years ago | (#18414819)

You can't really compare it to the music industry, AAA games usually take 3 years to make, and involve more than 100 people working on it. I don't think there has ever been and album that has required resourses like that. And you're just comparing it to the what the artist gets, not all of the people that worked on it, there is no one person who makes a game (these days anyway). Don't be fooled games cost a lot of money to make.

Re:Beats the music industry (0)

Anonymous Coward | more than 7 years ago | (#18415079)

A "magnitude". Is this a mathematical or scientific term? How big is a "magnitude"?

Re:Beats the music industry (1)

SirTalon42 (751509) | more than 7 years ago | (#18415353)

An 'order of magnitude' would be 10x, so for his statement to be accurate 'content creators' would have to get 4.5% or less (though he said 'content creators', not artists, which probably get far less since they're not used for marketing purposes, thats what the artist is for).

Re:Beats the music industry (1)

pipatron (966506) | more than 7 years ago | (#18415483)

Yeah. I only know the Swedish numbers, but I don't think they differ that much internationally, at least not in the western cultures. According to them, the content creators gets to see about 2% of the money that the population spend on culture. The rest ends up in the pockets of various middlemen.

Order of magnitude (2, Funny)

tepples (727027) | more than 7 years ago | (#18415501)

A "magnitude". Is this a mathematical or scientific term? How big is a "magnitude"?
An order of magnitude difference [wikipedia.org] is a factor of approximately ten. For instance, Mega Man X for Super NES was 1,280 KiB, which is an order of magnitude larger than Mega Man for NES, which was 128 KiB.

Because it's what the market will bare. (5, Insightful)

hal2814 (725639) | more than 7 years ago | (#18413983)

As long as people are willing to pay $60 per title, that's what they will cost. You can break down the numbers all you want but if the market won't tolerate $60 games, there sure as heck won't be any. The least important links in the chain will either be paid less or eliminated entirely.

Re:Because it's what the market will bear. (1)

iainl (136759) | more than 7 years ago | (#18414137)

Exactly. An extra £10/$10 was slapped on the price of 360 games because the publishers (not Microsoft, the publishers) thought they coud get away with it at that stage of the game.

The vast majority of a game's expenses are on the creation of the product; R&D if you will. They're the same whether the game sells one copy or a million. So, just as we saw with the previous two generations (more? I wasn't buying console games then, as I was computers only) and indeed with DVDs, the price starts high while the people with the machines are the early adopter stage, then once the userbase is a bit bigger you can drop your prices to sell more copies.

Re:Because it's what the market will bare. (0)

Anonymous Coward | more than 7 years ago | (#18414139)

Interestingly, as long as the alternative is a choice between $60 and $0, a big chunk will pick $0 instead.

Re:Because it's what the market will bare. (1)

Aladrin (926209) | more than 7 years ago | (#18414393)

Interestingly, as long as the alternative is a choice between supporting the company and paying for something legally, ethically, and morally, and downloading it off the internet and screwing the developers of the game you love so much, damning your eternal soul, and taking a chance on going to jail, a big chunk will pick $60.

There, I fixed that a bit for you. It goes far beyond the money aspect. Some people actually appreciate the fact that the developers put a lot of hard work into the game and if sales are bad, the company will quite making them!

Re:Because it's what the market will bare. (0, Troll)

Truekaiser (724672) | more than 7 years ago | (#18414759)

seems to me you never have had a job or had to ballence your own budget.
60 bucks is allot to waste.

Re:Because it's what the market will bare. (3, Insightful)

MeanderingMind (884641) | more than 7 years ago | (#18415523)

If it's a waste, why are (hypothetically) you taking the game for free? That appears to be what you're implying is the proper response to the price.

I'm confused by a strange attitude I see in people today I'd label "entitlement". Somehow, we are entitled to anything we want, whether or not we can afford it. Instead of dealing with it and living without luxuries, we take what we want.

I don't know where this attitude comes from, I'm just noting what I've been seeing here in America.

Re:Because it's what the market will bare. (1)

91degrees (207121) | more than 7 years ago | (#18415143)

downloading it off the internet and screwing the developers of the game you love so much, damning your eternal soul, and taking a chance on going to jail,

True. That's why some people choose to pay.

Of course, to some other people their eternal soul and the risk of jail are less than $60 but more than say $30. This is far from an unheard of concept. Most people have a price on their morality.

Re:Because it's what the market will bare. (1)

BlueCodeWarrior (638065) | more than 7 years ago | (#18415285)

Interestingly enough, it's possible that the OP meant that when choosing between paying $60 for a game and not buying one at all, some just won't buy a new system at all. I know $60 games are one reason that's kept me from buying any next-gen consoles so far.

Not everything is about piracy.

Re:Because it's what the market will bare. (1)

xdroop (4039) | more than 7 years ago | (#18414179)

My god, man, this is Slashdot -- it is no place for rational discourse. And on economic theory no less!

Unless you are going to rail about the "unfairness" and "greed" inherent to the current system, I recommend you find another place to discuss the matter.

(Now in your defense, you did disguise your rationality by using "bare" instead of "bear".)

Re:Because it's what the market will bare. (1)

hal2814 (725639) | more than 7 years ago | (#18414211)

"(Now in your defense, you did disguise your rationality by using "bare" instead of "bear".)" Yeah I noticed that after I hit submit. I guess I've seen the "We bare all." billboard a few too many times on I-85.

Because it's what the girls will bare. (0)

Anonymous Coward | more than 7 years ago | (#18414495)

Naturally, however it is an informative article that brings to the forefront those elements that are common across most games. For example the quest for immersiveness generates a lot of the cost across a number of genres. Even RTS's are becoming more realistic.

Sooo.. (0)

Anonymous Coward | more than 7 years ago | (#18414147)

..who gets what percent of the $0 I spend on awesome homebrew games?

Homebrew on what platform? (1)

tepples (727027) | more than 7 years ago | (#18415615)

..who gets what percent of the $0 I spend on awesome homebrew games?

You meant on Nintendo DS, right? Wii, Xbox 360, and new PSP units are still completely locked down, and PLAYSTATION 3 homebrew using the "Other OS" bootloader still has to use Quake 1 era software rendering because the hypervisor turns off the RSX chip.

Forbes is out of its element (0)

Anonymous Coward | more than 7 years ago | (#18414173)

Even though it is a Forbes article, and not some random blog post, that's a lot of horse puckey. I think Ms. Rosmarin is buying whatever major game pub or console producer are selling her. Remember, according to Hollywood studio accountants, no film ever makes a profit. "Woe is me," says game publisher, "I only get $1/unit if I sell more than $500,000". Granted, video games are a 'hit driven' industry, one success pays for many 'failures'.

As if console games were cheap before (0)

Anonymous Coward | more than 7 years ago | (#18414181)

http://en.wikipedia.org/wiki/Phantasy_Star [wikipedia.org] : 69 $ (20 years ago)

Well this one is an exception :) But 15-20 years ago console games (especially the bleeding-edge ones) WERE as (if not more) expensive are today's ones.

Obvious (0, Offtopic)

WankersRevenge (452399) | more than 7 years ago | (#18414219)

Do we really need an article to spell this out? I mean, it's not rocket science. Right now, the cost of obtaining a temporal snatcher device is very expensive. First you need to power it, then find someone who knows how to use, and then calibrate it so you can even find a Playstation 4 dev kit. Not an easy task by any means. I mean, do we even know there is even going to be a playstation 4? What happens if you snatch Rosanne's underwear instead? It might make for a happy dev team (if your team is into that), but the investors will be a little miffed.

I once worked on a project where we actually snatched one of George Lucas' fake beards. We fed-exed it back to ILM, and instead of thanks, we got a lawsuit. Not what the money men were looking for. After that incident, we switched development to xbox 360/playstation 3 which - surprise, surprise - is cheap in comparison.

Market forces (2, Insightful)

tygerstripes (832644) | more than 7 years ago | (#18414225)

It's interesting to see where that money goes & how it's divided, but to suggest that the ultimate destination of that revenue is the reason for the price of games is ignorant and foolish. Supply and demand, people. Any company who doesn't get all the revenue they can for a release won't last long.

Way past my impulse buy point (3, Interesting)

sixteenvolt (202302) | more than 7 years ago | (#18414339)

When I am browsing through something like Steam, I don't think twice about buying a game for $20 or $30. For $60, it definitely becomes a calculated purchase, and I really start questioning how badly I want the game.

$60 seems to be pushing the extreme limits of how much I'd even pay for a video game under ANY circumstances. I wonder if this line will ever be crossed?

And People Wonder Why DS Sells So Well... (1)

EXTomar (78739) | more than 7 years ago | (#18415149)

I agree with the parent that $60 is past the "impulse buy" range. I suspect why the DS does so well month after month isn't the hardware (which is so-so) but the fact it is a cheap gaming device with cheap games. Especially with kids, are you willing to spend $60 on a game you've never heard of for your kid or a $30 kiddy looking one?

This is why I'm disappointed in this era for consoles. Both the XBox 360 and PS3 are overpriced, their software is overpriced, and the games are getting shorter and maybe of questionable quality. The Wii could make a killing if they actually had some games. All in all we are getting the short end of the stick for video games on consoles this time around where maybe in a year it will clean up and pick up but I'm not holding my breath.

Re:And People Wonder Why DS Sells So Well... (1)

MeanderingMind (884641) | more than 7 years ago | (#18415593)

The Wii could make a killing if they actually had some games.


Not to mention systems.

This breakdown doesn't work (1)

91degrees (207121) | more than 7 years ago | (#18414351)

Or rather it's the price that changes the breakdown. Lets assume that a game has a staff of 30 programmers and designers at $100 000 pa and takes a year to write. That means that it cost 3 million to write the code. Now then, if they sell 100 000 copies of that at $60 a time, then that's $30 per programmer for each copy sold, or 50% of the cover price. If they only sell 50 000 copies, that means that 100% of the sale of each game goes to the programmers. If they sell 500 000 then it means $6, or 10% of each game goes to the programmers. So, do they reduce the price of games if they know they'll sell more? Doesn't seem to be the case.

Okay, next - the retailer gets $12 for each game sold. Would he still demand $12 if the games cost $20 each? What if they cost $12? Of course not. The retailer knows that the lower price would yield higher sales and would be happy with a similar percentage cut. Teh same applies to the console feee. The console companies charge a smaller amount per unit for budget games.

Manufacturing costs - Now this is something that actually affects the end unit costs. However they exaggerated severely. Small (1000 disc) runs cost less than half that.

Marketing? Well, that's not even in the picture. If this was considered an expense, they might as well get rid of the marketting department and make a whopping $4 extra per unit. Every dollar spent on marketting sees more than a dollar return either in allowing them to increase the sale price or increasing the number of sales.

This is pure bullshit (1, Troll)

ludomancer (921940) | more than 7 years ago | (#18414375)

This article is a work of fiction on a hilarious level. "Next-Gen" titles cost $60 because the greed of publishers demands it. Publishers get the majority of the profits, developers only get the amount it actually takes to develop the game and pay their employees. I can't believe the writers of this have the gall to say otherwise.
For the record I've worked in the industry for 15 years. There doesn't seem to be a hair of truth in this article.

Re:This is pure bullshit (4, Insightful)

LordPhantom (763327) | more than 7 years ago | (#18414733)

....and your post was grade "A" fertilizer. Look, real prices of games have actually gone down over time due to inflation. 60$ today is -not- the same as 60$ in 1995 or 1990, etc. When you were buying the high end games for your SNES, you were paying the equivalent of roughly 20$ more in terms of today's money. The reason for games being cheaper also probably has something to do with the fact that more of them are selling (volume).

In short, greed has nothing to do with it. It's a simple matter of money value over time, and mildly increased production costs.

And honestly, using a vague work history for the record industry isn't likely to increase your credibility for most people here, most of all in a post that tries to imply that -game- publishers are greedy.

Pricing (0)

Anonymous Coward | more than 7 years ago | (#18414387)

In the UK, 360 games are £40-£50 (guessing $70-$90 ?).
PC games are £35 or so.
Wii games are £40.

At those prices, I cant afford to buy lots of games on the offchance they are any good, so I have to spend hours reading reviews for games to help decide what to buy.
If the games cost half the price, I could impulse buy many more titles - they would probably get 2-3 times the revenue out of me than they do now. All for the price of a CD/DVD and a plastic box?

It's mostly licensing... (4, Insightful)

MaWeiTao (908546) | more than 7 years ago | (#18414413)

I don't think the $60 price tag is anything new. I recall seeing PS2 and Xbox games in that price range.

The obvious reason why console games are expensive is because of console licensing costs. It's why the same game for PCs costs $10 to $15 less. PC games have been $45, at most $50, for years but console games seem to have been creeping up in price in that same time period. So the price difference clearly isn't due to increased development costs.

This is one of the reasons I never really got into console gaming. I don't like having to pay for these nonsense licenses nor do I like having to spend that much on games. Certainly consoles have some desirable games, but not desirable enough that I'm willing to spend that much more money on them. And if you think what we pay in the US is bad, you should see prices in Japan where your average game is at least $70, and I've seen some close to $80.

Why does anything cost what it does? (2, Insightful)

ThousandStars (556222) | more than 7 years ago | (#18414469)

Because people will pay the price. If they won't, the product sooner or later disappears.

hmmmmm (1)

Joker1980 (891225) | more than 7 years ago | (#18414491)

This was my biggest worry about gettting a 360, but to be honest ive got about 8 games now and i havent paid more than £25 for any of them (and they were new). The irony is that so far this gen has been much cheaper for me.

Its probably just luck, seeing the deals at the right time and such but i swear if u stay the hell away from brick and motar stores you'll be fine.

Doesn't add up (1)

Cauchy (61097) | more than 7 years ago | (#18414523)

The article says that they need to sell 1 million units before they get into the black and start making $1 per sale. It also says that many games cost $20M+ to produce. Assuming the $20M mark, and assuming that production costs don't increase with sales (do programmers get royalties?), that means they are paying off their investment at $20/sale. If this is so, why do they not start making $20/sale after selling 1M units?

Re:Doesn't add up (1)

tomstdenis (446163) | more than 7 years ago | (#18414985)

Supply and demand.

If the game is selling million*S of copies, there is still a strong demand for it. Lowering the price would not make much economical sense.

When sales taper off they usually promote them as "players choice" or "gold" games for $39 or $49 or whatever...

If you can resist buying a game for the first year after it comes out, you usually can save yourself some money. However, if you instead just buy fewer games you can get them early.

Re:Doesn't add up (1)

Cauchy (61097) | more than 7 years ago | (#18415297)

I'm not arguing they should lower the price. I'm saying if they are receiving a net $20/sale (as the math shows) that after they pay off their production costs, they should be profiting $20/sale, not $1/sale.

Re:Doesn't add up (1)

tomstdenis (446163) | more than 7 years ago | (#18415411)

Oh, yeah, well expect some level of lying. But don't underestimate the # of hands in the pot. Especially sport franchises where they pay millions in license fees just to stick a jersey on some modeled animaton. /me plays NES games, and desperately wants a Wii

Re:Doesn't add up (1)

Cauchy (61097) | more than 7 years ago | (#18415519)

One presumes that the licensing fees go into the other $40.

BTW, I have a PS3 that my wife bought me after I mentioned I might start playing WoW again. I play it once every week or two, and I desperately miss WoW. *sighs*

Total Horseshit! (1)

lbmouse (473316) | more than 7 years ago | (#18414597)

I call shenanigans on this piece of FUD. Sure the poor lil' ol' publisher only makes $1 and the evil programmers make $27... based on how many games sold? After you paid the expenses of producing a game, you don't pay more. There are no royalties provided to the creative minds behind what actual did something... like make the game. It all becomes pure liquid profit for the publishers. Why do you think the asshats can afford to charge only $20 for older games? Did they all of a sudden become cheaper to make, market, or distrubute? Nope, it's because they already raked enough cash to buy that private island in the Caribbean, but still need to hire Jose to wax the yacht. One buck a game? My ass. Leave it to Forbes.

Re:Total Horseshit! (1)

tomstdenis (446163) | more than 7 years ago | (#18414933)

They sell old games at a discount for various reasons

1. To clear stock, selling a game at a lower loss is better than a total loss.
2. Older game could inspire future sales (lead generation)
3. Why the hell not?

Tom

Wrong, It's all about what people will pay. (1)

Oz0ne (13272) | more than 7 years ago | (#18414609)

If you'll notice, a lot of next gen titles are existing previous generation titles in higher resolution with a few more effects enabled. Obviously the development costs there weren't anywhere near what the inintial development was, especially with cross platform titles that have to have a portable enough code base to be deployed on disparate architectures.

The $59.99 is completely artificial, because that's what people will pay. There's no other reason for it. Of course, some games do cost quite a bit more to develop than others, so it makes sense their publishers would price them higher. That's not what happens though. Some games and publishers will price lower, because they can (or other marketing reasons,) but most will price the same at release to make the most profit possible. Good for them.

Just like last generation you'll notice games will come out at "max" price. A month or so they'll be down $5-10 everywhere, then they'll keep dropping, eventually they'll hit a "bottom" price where they'll be republished as a "greatest hit," if they can still sell. They're still making profit off the greatest hit games. Whether it's because they've completely recouped development costs at that point, or if it's just what the market will bear for that game, who knows. Probably a bit of both.

Re:Wrong, It's all about what people will pay. (1)

tomstdenis (446163) | more than 7 years ago | (#18414755)

I'd like to point out that it make take several titles to recoup the cost of a single game engine.

That said, I think they're focusing too much on detail [the wrong details], which is why the games cost so much. If you had to hire 200 artists, musicians, modellers, etc. for a year to make a game, you'd sell it for $60 too. Back when games were the product of 10-20 folk, it was totally possible to sell them for $20 and profit.

Tom

Hypocrite Alert! (0)

Anonymous Coward | more than 7 years ago | (#18414691)

I hope none of you World of Warcraft players paying $15 a month for two years are in the group complaining about a $60 game :)

I have a RIGHT to pirate as many games as i want! (-1, Offtopic)

Anonymous Coward | more than 7 years ago | (#18414743)

Because Information Wants to Be Free!

Supply meet Demand (1)

MrCopilot (871878) | more than 7 years ago | (#18415393)

Why do they cost $60, People will pay it. Period.

Next-gen? (2, Funny)

ebingo (533762) | more than 7 years ago | (#18415487)

I'm sorry, but I always buy games for current-gen systems. What would be the point of buying a game for a system not out yet?

Because They Can (1)

Greyfox (87712) | more than 7 years ago | (#18415565)

Just wait a year and buy the game in the bargain bin for $15. If you've got to have the title NOW, you obviously don't mind paying the premium that much.

GoW production cost: $10m not $20m (1)

El_Muerte_TDS (592157) | more than 7 years ago | (#18415949)

Now explain why other games that were twice as expensive to be made also have the $60 pricetag.

It's getting to be too much at times... (1)

PotatoHead (12771) | more than 7 years ago | (#18415959)

Frankly, Final Fantasy XII was worth the $60. (Yeah, I know the non-collectors one was $50, but it was out of stock at the time.)

Many of the franchise games, with recurring themes, are no longer worth the $60. Many of these simply look better, or have some nifty feature and that's it. Hmmm... reminds me of Microsoft software actually. --no thanks! This title was big (really fricking big), expanded on the story line and overall theme nicely and had fantastic art direction. Beautiful and engaging game, with a lot of depth. Casual players could blow through it and enjoy the title. Those wanting to really explore the game are rewarded with lots of things to do. Playtime on this title ranges from 20-30 hours, to nearly 200! That's worth the $60.

If the game is actually something new, and provides that escape factor, the $60 is no biggie, particularly if it's got some playtime to it. If it's a rehash, I'm more inclined to snag it used, or just skip it period.

All of the licensing that goes on, makes sure the existing games remain expensive for new versions. I've no problem with that, but I think as time goes on, more people will start doing what I am; namely, skipping or buying used or trading. That pie will shrink somewhat. New gamers will counter that somewhat. Don't know where those curves intersect!

A new Madden game, for example, is generally not worth the $60, IMHO. The core elements that make that kind of game fun are present in the titles I already own. Getting new players and such is cool, but not $60 worth of cool.

Retro gaming is getting pretty fun these days. Being able to self-publish creative and fun games for older consoles is a kick and more people are doing it now than ever. I like this scene. The games are fun, you can get to know the developers and even participate in the process too boot! Interestingly, some of these titles hit $40.00 each! Many sell into the hundreds and a few into the thousands. $40.00 for a game written for the Atari 2600, suggests there could be a very strong market for smaller scale development efforts, given the right expectations are set. It also suggests that smaller houses could make plenty to make the whole affair worth it.

The current crop of consoles is powerful enough to allow for some level of abstraction to make developing new games easier. The price will be perhaps somewhat smaller games, or maybe less potent graphics, but the creativity is likely worth it in the longer run. We need new genres, or perhaps we just need to really explore some of the ones forgotten.

For now, I'm not getting a new console. The trusty PS2, retro machines and my computer all provide a lot of gaming fun. I'll spring for a new title, and I'll pay the higher price too, but I just don't do it as often. For so many games, it's the same overall ideas with different skins, essentially. No thanks!

Rather than get into a price discussion, I would prefer that be off the table and instead see more efforts to encourage smaller scale game development. Heck, if the console makers are worried about managing expectations (graphics, for example), brand the effort with a logo so those titles are differentiated from the blockbuster ones filling the shelves now.

More diversity and creativity in gaming will expand both the pool of potential gamers as well as generate a new set of core platforms from which second and third gen games can be built. This is where the value is. Always has been, always will be.

I fear the established players have a solid interest in not seeing this go any farther than the current retro scene. If people got into games as art, and played them for playability and all the other classic things that make games fun, suddenly the need for totally new console hardware drops doesn't it? Efforts, like the ones I described above, could span several consoles and even generations of them, given some engines to work with. This would be a much better scene than the one we have now.

BTW, of the new consoles, the Wii is probably the one I will get because they've added to the core experience with the motion controllers. The others are really remakes of earlier efforts. More power and storage really don't add as much to the experience these days. (Again, look at FF XII for PS2, for a solid example of that!) Much better to add new elements in, instead. Nintendo groks this element of gaming better than the others do right now. The sales numbers support this nicely too.

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