Sonny Corinthos

There's a war going on in the video game world, but it's over dollar signs, not virtual land.

A boxed copy of Call of Duty: Modern Warfare 3, the world's top-selling console game, costs $60. Angry Birds, the world's biggest mobile game franchise, costs $1 for software that you can download in under a minute. The pricing gap between what's traditionally considered the highest-tier premium games and the fast-evolving mobile, tablet, and social gaming market is widening, and it's spelling disaster for countless game makers caught in the middle.

According to The NPD Group, physical content sales were down 8% in 2011. This year hasn't been a cakewalk either, with sales continuing to slide. Though some of the blame can rightfully be foisted upon the decline of the once-mighty Wii, it's apparent that people aren't buying games like they used to, and the industry is scrambling to figure out why. But most agree that it begins — and likely ends — with the high cost of new games.

The sentiment that games cost too much is certainly not new. Wired's Chris Kohler recently outlined a list of reasons games cost too much and combated the argument that the used game market can be blamed. Nexon America's CEO Daniel Kim told GamesIndustry International that "Free-to-Play" games (often called "Freemium" because users are incentivized to pay small premiums for more content) are not going away and the traditional model will have to change.

He's right. $60 has always been an embarrassing, crippling barrier of entry compared to gaming's entertainment peers. A brand new book, DVD, or CD rarely breaks the $20 mark, and even the highest tier Blu-rays cap out at around $30. Why are new games so pricey?

Publishers have long blamed console games' high price on a plethora of issues. Skyrocketing development costs is a biggie, as is piracy. Most recently, publishers are taking aim at the used game market, charging that the buying and selling of used merchandise is taking cash out of their pockets. But whatever impact on profitability these concerns have, it doesn't change two monumental problems:

- Psychologically, $60 just sounds expensive. This isn't anecdotal, this is common sense. Unless you're financially independent, $60 outright repels a vast slice of the entertainment consumer populace that the games industry desperately needs to convert to grow and survive.

- People are having fun playing more affordable games. The choice and product quality at the bottom end of the pricing scale -- anything under $15 or so -- has grown tremendously in a relatively short period of time. Games like Draw Something, Angry Birds, and Infinity Blade aren't only played by 'casual' gamers.

That being said, the top perennial franchises like Halo, Elder Scrolls, Battlefield, and Madden aren't going anywhere, at least for a while longer. Games that critics and consumers universally laud as "must-haves" can continue to support this massive premium. But it's the mid-tier titles, the unestablished IPs, the riskier endeavors, the worthwhile games that don't quite master the magic formula, that will never get off the ground. Even highly-praised franchise entries like Rayman Origins struggle, and publishers like THQ have been threatened with NASDAQ delisting despite enjoying sales that "exceed expectations." Black Rock, creators of critical darlings Pure and Split/Second, were denied sequels by publisher Disney to focus on freemium content and eventually shuttered entirely.

The most egregious example of old-school thinking is the release of Plants vs. Zombies on PlayStation Vita. One of the rarer "crossover" successes, the game costs $3 on the iPhone but a whopping $15 on the Vita for an identical product. Why? Because it's a dedicated gaming device and core gamers are accustomed to paying higher premiums. How long can this madness last?

It's not just Facebook and smartphones that threaten to steal that audience. The consoles themselves have thriving online stores in Xbox Live Arcade and PlayStation Network, offering gaming alternatives with high production value and more relaxed pricing. Just look to successes like Battlefield 1943 (over 1MM units sold), Xbox's Castle Crashers (sold 2.6 million), and recent PS3 hit Journey, which quickly became the PSN's fastest-selling title ever.

If the Old Guard would just drop the charade that $60 is the only feasible price point, they might find an unexpectedly higher volume of purchasers to mitigate the reduced revenue per gamer. I realize that the $60 Call of Duty costs some tens of millions more to develop, market, and distribute than the $1 Angry Birds, but is there really a $59 differential there? Someone wiser than me in economics can surely model up a theory that finds a middle ground.

http://games.yahoo.com/blogs/plugged...181412574.html

MoviePage

Yep. Used games are the current most convenient scapegoat, and the methods they're devising to combat secondhand sales are accomplishing nothing except driving more consumers away. Meanwhile, they're shocked and horrified that a lot of people resist the idea of paying $60 for the latest poorly-reviewed, consumer-unfriendly title on day one.

Decker

Angry Birds on the iPad is $3-$5. I think it's safe to say that MW3 is at least 20 times as compelling, 20 times as complex and provides at least 20 times the gameplay depth of Angry Birds. This is sort of a silly essay.

You could make the same argument about watching a movie on PPV vs buying the Blu Ray at full price. With the exception of the guy who prices the Xbox Marketplace Games On Demand, everyone knows there's a value difference between digital distribution and physical game ownership.

K&AJones

Considering the sheer amount of man-hours, the amount of people involved and the technical aspects of making a game from sound, video and even the musicl score.....no-way we see the average price decline from $60 anytime soon. Plus throw in the declining value of the dollar, pay-scales (union or non-union), insurance, energy costs, renting, leasing, maintenance, royalties and overhead.

Next time compare the "credits" from a game to the credits of a movie...they're about five times longer. Granted not all games are mega produced like the COD's, Halo's, GOW's or ME's and a few others out there but they're not far behind. The problem are the real lousy ones out there that someohow either get rushed or doesn't get real scrutinity before going out the door. For every COD, BF, Halo or ME there are at least three or four that don't break the (5 or 6) Gamer Score.


Probably what we all need is a $$$ score instead of a number score. Rank the games as either $60 all the way down to $10. Something else is every game should have a demo period. How many people would buy a car without test driving. Or buy a TV without at least seeing model in a showroom.

Tracer Bullet

I think it's only 15 times as compelling as Angry Birds, but 17 times as compelling as Temple Run.

Tracer Bullet

That's the point, though--this is unsustainable. Very few games are "worth" $60. Too bad that they're getting really expensive to make.

So far this year I've played Mass Effect 3 and Cart Life. The latter blew the former out of the water.

orangecrush

Maybe, but the industry did extreamly well in the midst of the some of the worst unemployment we have had in decades with $60 games. I don't really think $60 games are nearly the problem that they are made out to be. We have had $60 games for 5 years now and games have sold extreamly well this generation. The real problem, as you alluded to, is the cost of game development. It is so expensive to create a "AAA" game now that many developers can't survive 2 poor selling games back to back.

This is just stupid. Blu-rays are cheap because studios make so much money at the box office before the home release. Books and albums cost practically nothing compaired to games to make. Why not say that books are way overpriced compaired to free iphone games?

kgrogers1979

The author of that article must be relatively young since he doesn't remember $80-$100 cartridges in the 90s. Those were some expensive games...

And also nobody bothers adjusting for inflation. $50 even a decade ago is not worth the same $50 today. Games today really are not more expensive than they used to be, and in fact are far cheaper than those expensive cartridges. The Xbox 360 launched in 2005, so a $50 game in 2004 adjusted for inflation would be the same as $57 in 2010, which is only $3 cheaper. That's the cheapest games have ever been. Hell, an $80 cartridge in 1995 adjusted for inflation would be the same as $113 today. That's almost twice as much as today's $60 games... we should be extremely grateful that cartridges are a long dead format...

And yeah comparing something like Angry Birds to Call of Duty is absolutely retarded. A big game like Call of Duty costs millions and millions of dollars to develop. It takes hundreds of people working for 3-4 years to develop a game like that. Like a previous poster said, look at the end credits roll of any modern blockbuster game and the list is a mile long. A game like Angry Birds is extremely cheap to develop. A handful of people can develop it in a few months. Comparing small indie games to big name games is idiotic.

MoviePage

Maybe, but as the article is trying to point out, consumer perception of value doesn't always reflect the reality of development costs. To some people, games are games, and if the major deciding factor is $1 vs. $60, well...

kgrogers1979

Its still apples and oranges. A small indie game doesn't really compete for the same market as a big blockbuster. Its like the Wii vs the PS3/360. The Wii had a lot of older people and "casuals" buy the console and that's a completely different market from the "hardcore" who buy all the Halos, GTAs, CoDs, etc. There's really only a few people that overlap and exist in both markets.

chuckd21

AAA titles should cost $60.

Deadly Premonition was a great $20 title.

Games like Split Second and Blur should have been $40.

Price points are needed. $60 for Mass Effect 3 was totally worth it. $60 for Brink is a joke.

fujishig

When everyone moves to an Angry Birds model and the best, say, RPGs we'll get are like Infinity Blade (admittedly good for an iphone game, but not very deep) or Chaos Rings and the best shooters like the current iphone/ipad games, but all for less than 10 bucks, then gaming will die (at least the gaming that we enjoy). This smacks of the Wii/Kinect move to more casual games that end up alienating the hardcore gamers.

But hey, you say, we have stuff like GTA and Final Fantasy Tactics on the iphone! All after making their money on other platforms for full price.

Is the author really saying that if they cut prices on console games, that they would sell enough to make up for the price difference? Somehow I don't think so, even less so for the so-called medium range games that he says the industry is currently killing. You know what happens if you release split/second at $40? You'll probably get a small uptick in sales, but people will still wait for the inevitable price drop, plus you devalue the franchise in the eyes of fans. If it becomes a big hit, you can't up the sequel to $60. It's not like game makers go into a game trying to make a mediocre game (well, at least most of the time)

kgrogers1979

There's also the fact that the profit margin on software has to remain high because the profit margin on hardware is very low or even nonexistent. Consoles themselves are a loss leader sold for little to no profit in order to get consumers to buy the games where the true profit is. So if you cut down the price of the game, you are not only cutting into the profit of software but hardware as well.

chuckd21

Binary Domain came out recently at $60, with no marketing of any kind, and sold 20k copies.

If it had come out at $40, people would have asked "What's this $40 Sega game?" and generated a tiny blip of buzz. Maybe they'd sell 40k copies.

Sure right this second if a game came out at a lower price point everyone would assume "Wow, that game must suck since it's not full price." But if there are established tiers going forward, that won't be an issue.

Rob V

The end of the $60 video game is near because the begining of the $70 video game is right around the corner... if you count DLC we've already been down that road.

fujishig

Do you really think so? I think Neverdead came out at $40, and it's already been clearanced at Target; I wonder how that sold. And I passed on it because even on clearance, it was 30 bucks, and I'm sure it'll be 20 eventually.

And Rob V's post is what I thought this would be about, that games are getting more expensive as they withhold DLC or come up with premium packages that include the DLC.

Michael Corvin

No but it's clear what developers and franchises are AAA worthy at this point. $40 may be too low(devalues it), but I think mid-range games could benefit from at $50 price tag. If by chance a game becomes a hit and reaches AAA status (Borderlands, Bioshock), then the inevitable sequel can then garner the $60 AAA price tag.

Another simple bar, a 6-10 hour game with no multiplayer(or half baked MP that is merely a tick on the back of the box) is not worthy of $60. Darkness, Prey & Tomb Raider come to mind.

d2cheer

Until some company releases a top game for say $30.-40.00 retail the above story is complete nonsense. Breakthrough pricing has to have someone do it "first" and show they can make a profit. A better one than if they sold it at a higher price. It is all about revenue.

Paramount I believe broke the VHS barrier when it released Star Trek II at $29.95 (proudly purchased on Beta), people then began to think of owning the movie rather than renting. It was a huge success and soon many other companies followed.

As some have already pointed out if it is $30 it can't possibly be as good if they charged $60...

chuckd21

Why are expectations of price non-existant on places like XBLA? Everyone wants games to come out at 400 and 800 points, then flips out when they come out at 1200. Arcade titles at 800 points aren't perceived to be inferior.

The Bus

Matthew Chmiel

Hey you guys, am I too late for the circle jerk?

All I've heard so far is bitch bitch moan moan. The question at the end of the day: what provides you with the longer, more worthwhile experience? Angry Birds for a dollar or Modern Warfare 3 for sixty times more? While I paid $11.99 for my copy of Modern Warfare 3 on release date (thanks Amazon!) and I've played nearly 72 hours of the game to date on multiplayer alone. In comparison, I've played Angry Birds for barely two hours total.

$11.99 divided by 72 = $0.17 an hour I've paid for entertainment. That's actually pretty fucking great! If I add in the price I paid for an Elite subscription ($39.99; thanks Best Buy gift card!), I'm at less than $0.72 an hour! I don't even get that sort of value from a movie ticket, an album, or a Blu-ray with hours of bonus material!

If anything, mobile platforming is going to cost more. Look at Angry Birds: Space. Unlike the past games which had some DLC for an additional dollar or two, Angry Birds: Space has now made its way to become a game that's pay for play. I thought Rovio made the game and not Zynga? Zynga being the company that has set the model up for how web and mobile-based games should cost. If you want the game, it's free (or a dollar or two). If you want the entire experience to kick your friends' asses, well, start paying up bitch. I feel that route is far more insulting to the customer than charging the customer up front a set price.

Speaking of price, look at any Nintendo published game. No DLC because they're against it.

PC gaming, thanks in part to Steam, is how games should be priced. Your AAA titles are priced at MSRP (usually $59.99) and anything/everything else falls in-between from free to whatever. Fuck, Valve gets how you price a game. Portal 2 cost me $39.99 on release date and the PS3 copy came with both a copy for your console and another for Steam. I've only gotten ten hours out of the game ($3.99 per hour), but the experience was worth it and I can practically play it anywhere I want.

TL;DR: Everyone needs to follow Valve and Steam.

DJariya

If a game provides you with hours/days and months of enjoyment, I don't think paying $60 is unreasonable. I pay $60 every year for the new NBA 2K game (if I can get it cheaper great) and that provides me with 9-10 months of entertainment during the NBA season.

Anubis2005X

The $60 tag doesn't usually last very long anyway. Just picked up SSX and FFXIII-2 for $30 each and those just barely came out. Just wait a few weeks and the $60 tag disappears on many titles.

Obi-Wanma

I got FFXIII-2 for $14.99 with the @Gamer coupon, plus it was the novella version.

maxfisher

The original article is pretty poor and ignores some big points. Comparing COD to Angry Birds is ludicrous, and that's coming from someone who has both and has played more Angry Birds. For the vast majority of people though, COD will provide exponentially more entertainment hours and it certainly justifies the higher price. The bigger problem, as several other posters have noted, is that $60 should be the price for games that deserve it, not 95% of what makes it to market. Honestly, though, the system does a great job of dealing with this now. Almost all games, even the AAA ones, are available on sale for $40 within a month. Most drop to $40 or $30 MSRP within a year, resulting in sale prices of $20 or so, which can often be stacked with Best Buy coupons or Gamestop B2G1F or whatever. My concern is when we do get forced into digital distribution only. I think that'll put the brakes on many of the rapid drops/sales and be awful for the industry, as a lot of gamers will buy a lot less games.