Do Video Games Cost Too Much? [Slashdot]

[DP ServBot]

Valve's Gabe Newell gave the keynote address at this year's Design, Innovate, Communicate, Entertain (DICE) Summit about the cost of games, the effect of piracy, and how to reach new players. Valve undertook an experiment recently to test how price affected the sales of their popular survival-horror FPS, Left 4 Dead. They Reduced the price by 50% on Steam, which "resulted in a 3000% increase in sales of the game, posting overall sales that beat the title's original launch performance." They also tested various other price drops over the holidays, seeing spikes in sales that corresponded well to the size of the discount. This will undoubtedly add to the speculation that game prices have risen too high for the current economic climate. G4TV ran a live blog of Newell's presentation, providing a few more details.
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[Oobgarm]

Given the current 'economic climate', I think they are, but that's just because money goes elsewhere and not so much to entertainment.

I do honestly think that companies should release new IPs at $40. If EA had done that with both Dead Space and Mirror's Edge, they'd have sold a ton more copies than they did. You gotta figure that the difference will be made up in the fact that they're going to sell more copies. I mean, you're going to have those who are always going to wait for the drop to $20, but a lower initial cost might spur on some of those fence-sitters. Only reason I personally got either of those games is because I got them for $40 each.

All things considered, scale things back by even just $10 for a while and I think companies will see higher sales. It's amazing what a difference a small amount makes.

[JunkTheMagicDragon]

this is why gamestop does gangbusters on their used game sales. price, price price.

i can buy a new 360 game for $60, or i can buy two or three used ones for the same price. not a hard decision to make, unless you're talking about an absolute must-have new release.

i would def buy more new games if the initial cost was lower. i remember some cd stores around here used to sell new release cds for cheap (around 10 or 15 bucks) for the first couple of days to drive sales, then after that the price would go back to retail. if i was on the verge with an album, the cheap price would usually make me go for it. for aaa titles, the publishers would be shooting themselves in the foot, but like oobgarm said, something similar for new ips or niche titles would be a good sales booster.

on second thought though, i wonder how well this kind of thing would work in a brick-n-mortar. valve has so little overhead on steam, they can afford to do a drastic sale. cutting the price on physical releases (whose price includes distribution costs and the retailer's cut) would drive margins down for everyone. sales would increase, but would it be enough to offset those losses?

[Jorpho]

With so many unplayed games sitting around, the thought of spending more than $20 on a single new game these days makes me downright queasy.

They also tested various other price drops over the holidays, seeing spikes in sales that corresponded well to the size of the discount.

Heh. Who wouldn't buy Bioshock for five freaking bucks?

this is why gamestop does gangbusters on their used game sales. price, price price.

Except Gamestop's (or at least EB's) used game prices aren't much of deal compared to retail, or even other sources of used games.

[Clownzilla]

My price point for a game is $20 and $200 for a system($100 for a handheld). I don't care if it's new, used, clearance as long as I pay no more than $20 for all of those 1's and 0's on a disc. I understand the advanced technology in games and game systems but in the end it's just a form of entertainment. Games are fighting with TV, dining out, movies, board games, books, etc. and in my world $50 to $70 is a complete ripoff for a video game. Don't get me wrong, I LOVE games but I will only pay a reasonable amount for them.

[chrisbid]

publishers can basically charge whatever they want. the physical cost of production is very low. all of the costs of a game are in development and (for third parties) licensing. Sony and Microsoft have to keep the licensing fees high to make up for the losses sustained with hardware sales.

i agree that game prices are too high, but the bigger problem is expensive hardware.

[j_factor]

Games do cost too much. I remember paying $40 for new games in the Playstation days. There is no reason a game should be $60 by itself. It's not like we've gone back to cartridges.

[eugenek]

Yeah, you'd think they'd be smart enough to figure that halving your profit margin but selling three times as many copies = more revenue. Does anyone remember when the 2K franchise went to $19.99 for newly released games? I hope that made money for them, it's the only time I've bought all of a single year's sports games. Too bad EA had to screw them over on the NFL license. Fuck EA.

[backguard]

The thing with lowering the release price on a game is that you don't want to get lumped into the euphemistic category of a "value title". Lots of consumers equate quality with price and they may view a $40 dollar new release as worse than a $60 game just based on the pricetag. Stupid yes, but it is normal consumer behavior.

[bangtango]

Games appear to be less expensive now than they were in the cartridge days. Plus I remember there being far fewer price drops back in the 8-bit and 16-bit era compared to today.

There were a lot of 8-bit and 16-bit games which seemed to be priced at the $40-60 mark long (years) after they had been released and this is something you don't see today. Now a game might be out less than 6 months and get a price drop or two.

Never in the cartridge days did you see new releases come out at $10-20, which is far more common now (and has been since the days of the PS1). Granted that is because you couldn't really do that type of thing in the cartridge days. However, the point I am making is things are better now than they used to be.

[Bojay1997]

Games do cost too much. I remember paying $40 for new games in the Playstation days. There is no reason a game should be $60 by itself. It's not like we've gone back to cartridges.

No you didn't. MSRP on the A-list Playstation games were $49.99. This is the first generation that MSRP has gone up to $60 which I agree is too much in this economy, but let's not pretend that things were cheaper than they actually were back in the good old days.

[Clownzilla]

publishers can basically charge whatever they want. the physical cost of production is very low. all of the costs of a game are in development and (for third parties) licensing. Sony and Microsoft have to keep the licensing fees high to make up for the losses sustained with hardware sales.

i agree that game prices are too high, but the bigger problem is expensive hardware.

No matter how it's sliced, the market can't sustain these prices. The consumer does not think about the licensing, development costs, royalties, etc. when they look for games. All the consumer thinks about is "I can't afford this so I won't buy it". It's funny how companies like Sony keep hammering home that $500 is a good deal because it will play Blue Ray movies and games when most consumers will not buy a $500 game system no matter what it does. Sure, I also would love to deck my house out with solar panels and geothermal heating because it just makes sense.............except for my pocketbook.

[Zap!]

My price point for a game is $20 and $200 for a system($100 for a handheld). I don't care if it's new, used, clearance as long as I pay no more than $20 for all of those 1's and 0's on a disc. I understand the advanced technology in games and game systems but in the end it's just a form of entertainment. Games are fighting with TV, dining out, movies, board games, books, etc. and in my world $50 to $70 is a complete ripoff for a video game. Don't get me wrong, I LOVE games but I will only pay a reasonable amount for them.

But $50 to $70 is cheaper than when we paid $40 for games in 1982, inflation-wise.

[Gameguy]

But $50 to $70 is cheaper than when we paid $40 for games in 1982, inflation-wise.

Has everybody's income also increased at the same rate, inflation-wise?

[Icarus Moonsight]

This may be just a regional anomaly, but it is my experience and personal experience goes a long way to shape ones opinions and biases. Anyway, back in the 90's in the Minnesota Twin City area I remember retail prices being terribly high and not just on N64 carts... For many titles, if you didn't catch them at release for MSRP then you were stuck with TRU's premium pricing scale, and anything RPG at TRU up there was 80-100 bucks. Despite the titles MSRP. Dragon Warrior 2, 3 and 4? 70-100 bucks. Phantasy Star for SMS or Phantasy Star II, III or IV? 100 bucks. Panzer Dragoon Saga, Rayearth, House of the Dead or Shining Force 3 for Saturn? 80-100... The release of FFVII seemed to be a big help in normalizing the prices in the region. They seemed to settle down a year or so after. Back then, it irritated me, but I didn't bitch about it. I waited for the clearence sales. Unfortunately, a few of them I listed dried up before the price could get cut down to a reasonable level.

[Zap!]

Has everybody's income also increased at the same rate, inflation-wise?

Yes. The minimum wage back in 1982 was a scant $3.35/hr. I really don't get inflation. Since prices AND wages both go up together, why doesn't everything just stay the same?

[hellfire]

some games are waaaay overpriced some are underpriced

[kaedesdisciple]

Even in terms of dollars, $50 for a video game 20 years ago while the NES was still king of the hill is a hell of a lot more than even $60 for one PS3/360 game now. Yet, people still found the money then as they do now. If anything, games are cheaper now just looking at the CPI over the last 20 years.

[Ed Oscuro]

Valve's Gabe Newell gave the keynote address at this year's Design, Innovate, Communicate, Entertain (DICE) Summit about the cost of games, the effect of piracy, and how to reach new players. Valve undertook an experiment recently to test how price affected the sales of their popular survival-horror FPS, Left 4 Dead. They Reduced the price by 50% on Steam, which "resulted in a 3000% increase in sales of the game, posting overall sales that beat the title's original launch performance."

The strange thing about this is that I hadn't bought a new game at full retail for well over a year before L4D. I paid full retail for that one, however.

Haven't played it in a while now. Still waiting on that new content.

[BHvrd]

To me it's all about the features a game offers. If it's a single player game I usually won't pay over $30 for it, period. I look at it as "I can just play that later". If it's a new game with online/offline/co-op/splitscreen/great single player I almost always will buy it at the full $60 retail.

If they started focusing on more options then it would justify at least "my" purchase. I can't count the number of times i've said (Damn, I wish GTA IV was splitscreen).

I would vote for more options versus less price and I think current prices can and should cover all those bases.