Beginning with the next MX vs. ATV title, THQ is hoping to explore an alternative business model for retail games -- launching at a lower price point and then selling more incremental content later. That's where the industry is headed, says company president Brian Farrell.
"What we're thinking about the business is we're turning it on its head a little bit," Farrell told attendees at the BMO Capital Markets conference in New York this week. "It's not, 'how high a price can we get', but 'how many users'," he suggested.
"If you can capture everyone under that economic curve, that's where you can make the most money," Farrell added.
The $59.99 price point is "keeping people out," he continued. A more accessible retail price point means a wider initial install base for a title, thus a larger pool of DLC customers -- and a more viable business model overall, according to Farrell.
"When we launched [MX vs. ATV] at $59.99, we'd do some units, and then when we brought the price down to the mass market-friendly price of $39.99, it would just pop," he said. "So the thinking this time is, let's initially launch at $39.99 -- it's a very robust game, very high quality, so this is not about trying to get a secondary title out."
"It's an AAA title, at that price point, but then with a series of DLC so people can extend their experience," Farrell explained. "We think this is the future of gaming. We think that's the way games are gonna go in the long term."
Although it largely remains to be seen, DLC tie ratios for console titles are expected to be a little bit wider than the 15-25 percent seen on PC -- but according to Farrell, the focus should be on expanded install bases for console titles. "The fact that you've created a hit -- that's the real win," he suggested. If an install base is large enough, the tie ratio becomes less important.
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Our industry cries like a baby about used game sales but it's because our price points have trapped consumers in this cycle. Today gamers feel pressure to trade their game in as soon as possible to recapture the most value, which kills multiplayer and DLC sales. If we got our games down to $40, $30, even $20 where we were comparable with books and DVDs it would cut the legs out from under the used game market, prolong the multiplayer window, and free up money and tray life for high-margin DLC.