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Question of the Week Responses: Next-Gen Games Price Increase?
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Question of the Week Responses: Next-Gen Games Price Increase?

April 6, 2005 Article Start Page 1 of 2 Next

Last week's Question of the Week was: "Do you think that retail prices for next-generation games need to increase? " With so many responses, it's clear this is a hot button issue among our readers with a great deal of them feeling quite strongly on the subject.

Illustration by Adam Reed


There were those who felt that with bigger teams and bigger games, the next generation of games would have to bring bigger prices.

The cost of creating games continues to rise. So in order for developers to stay in business and continue making games, either the prices must increase or the market must expand.
John Bolton, Page 44 Studios

Yes, to be profitable, I think the costs will have to go up. Its unfortunate, but I don't think sales will increase enough to cover development costs otherwise. Conversely, I think that PSP and DS games should go down, as they can be made with smaller teams.

As the costs of making a videogame increase, the expense must be recovered somewhere, so for the short term, yes. One thing that tends to be forgotten is that as the number of polygons that you can render each frame goes up, someone has to create the content that uses those polygons. A better solution for the long term would be to figure out a way of generating game geometry that scales better. If content creation tools cannot keep pace with the increasing complexity of the target platform, costs of developing games will continue to spiral upward.

Games have been approximately the same price point for twenty odd some years. It's really weird that everything else goes up in price, and not games, or game systems. I remember the original Nintendo system coming in at around 400, dropping steadily to the 199 range. Games were around 60 bucks. I think price points that reflect inflation might be a start, especially in consideration of AAA titles, and the increasing cost to produce them.

There will definitely be some moaning and groaning from consumers if there is an increase in the price of new releases. The typical price that we think of for video games now is $49.99 for the typical brand-new, highly-anticipated title. Most consumers do not know about the amount of money it takes to produce a game and how spending that $49.99 on that game will support that company so they can continue to make better games. So, if the technology calls for higher production levels, then yes, games need to increase in retail prices if the company honestly feels it is needed.
-Erica Johnson

I believe they do, but maybe not for the reasons most people are thinking (rising cost of production, etc). I would like to see game prices increase in hopes that increased cost would prompt the audience to be more discriminating in their tastes, and thus cut back on the number of overall crappy games being produced. At the moment it seems that so many games are thrown together piecemeal simply because they can generate enough sales to make a profit with a pretty box and little else - hopefully a higher cost to the consumer would cause them to think twice.
-Evan Rothmayer, ISU

Tricky, as the cost of development appears to be going up for next gen consoles, I expect that this will even out over time, so it's a hard one to answer, working at a publisher I guess I should say “yes”?

If the games are going to be of higher quality, as it seems they will be from early visuals and speculation, I say YES! We griped about the prices of movie tickets being raised but we have pretty much become accustomed it and the movies that we see today are not of better quality, longer length or more enjoyable than those of the past. So if we can pay more money for the same quality movies, there shouldn't be any problem with paying more for games. Especially since they will provide better graphics, more interactive level designs, and more hours of gameplay than previous gaming systems. And don't forget that to make these higher quality games developers and everyone else involved in the process will have to put in more hours of work especially at first when everyone is becoming accustomed to working on these new systems.
-McConnell Lamarre, Brandt, Steinberg & Lewis LLP

Yes, but only if that increased price goes entirely to the developers who are facing the increased costs of creating next generation content. I'd hate to see more of gamers' money falling into the hands of greedy publishers who really don't have any increased costs as a result of the next generation technology. However, the developers need to realize that next generation technology does not instantly make a good game. There's no point in spending millions extra just to create fancier graphics or sound when you will make gameplay suffer as a result. A better solution to cope with the higher costs of next generation games would be to just plain get rid of the publishers and retail stores all together. Having everything as a downloadable purchase ensures that all of your money is going straight to the developers who deserve it. Effective retail prices could drop but only this time, the developers will get their fair share of the deal.

I think that it is going to increase. With the increase in everything else, increasing the price for the disks or cartridges would help balance out the price income.
-Jeremy Smorgala

I feel that the price of the games need to be relative to how good the game is, who is making the game, and how long it took to make. When Microsoft makes Halo 3 and Nintendo makes Super Smash Bros. for the Revolution, games will take longer to make, cost more money to make, and cost more money to market and promote. Honestly there are some games that come out for fifty bucks right now, which take six months to make, and cost a very small amount of money to make in comparison to the game giants ten bucks. So if a company like Microsoft spends ten times as much money on a game to make...yes, it will be a better game and more people will buy, but they also deserve to charge more for their games.
-Brooks Pentheny, Microsoft

Software prices for gaming consoles are likely to be on the rise whether the consumer likes it or not. The interesting part about the price increase is that it is not really coming from the cost of development which is only incremental. The real cost increase comes from following the movie industry where a $100 million movie only cost about $20 million to make, but they spent another 80 in marketing and advertising. Notice how PC games are not really advertised on television and pricing is fairly competitive, but console games run prime time spots on some channels and their prices are on the rise again, using the new game systems as an excuse.

I think that companies need to do everything in their power to keep prices at the current level. We have already seen that these prices do pretty well at making billions of dollars for the industry, so why increase? Greed? At the same time a slight increase to offset new technology costs may be hard to avoid. However if a price increase happens, all titles for current systems should be lowered to help offset the cost and also open gaming up to a larger crowd.
-Tony White, NovaLogic

Lower Prices and Price Flexibility

Some respondents felt the opposite; that lower prices or a more flexible pricing structure were the way to go, arguing that such a move would actually generate more profits by growing the audience. Some even felt that shorter, significantly less expensive games would require less of a time investment to draw in the time-poor casual gamer while the lower price would make games a more casual purchase.

I believe we need a multi-tier system. My suspicion is that many blockbusters (non-Sims blockbusters, at least) are purchased by hardcore players who are addicted to a specific genre. They need their fix and are willing to pay extraordinary amounts of cash to get it. If you really loved GTA2, is a mere 10 dollars going to get in the way of buying GTA3? Probably not. Publishers can and will take this large, money rich population of fanboys to the bank. On the other hand, there are more casual gamers who see gaming more as entertainment and less as a lifestyle. If we want to encourage women and non-gaming men to partake of our games, we need to price at a level that removes purchase barriers and matches up with the consumer's expectation of a casual 'spur of the moment' purchase. If you want to see this theory in action, just look at the prices for a DS game vs. a PSP game.
-Daniel Cook, Anark

Quite the contrary. Games prices need to significantly decrease. We keep talking about mass market, but even the largest hits are laughably small in terms of possible mass market penetration. The early adopters (geeks and technophiles) don't mind paying a zillion dollars for their priced toys, but with any technology prices are substantially lowered before the mass market takes them on. Why are we not following that model with games, and yet keep dreaming of breaking into the true mass market (which is a hell of a lot bigger than what The Sims, Myst, or Half Life have sold). Yes, it is a catch 22, a dramatic increase in sales are needed to warrant a price point of say, 10 dollars for a new AAA title, but that critical mass will not occur if we don't lead the way. Are the customers going to take that leap of faith on us? I don't think so; it is not like there is no other entertainment available out there. We want it, so we need to make the bold move.
-Marque Pierre Sondergaard, Powerhouse

I think the pricing model for games needs to be re-thought in general. The console manufacturers have (understandably) feared repeating the Atari cartridge game price meltdown of the early '80s, and have kept a very tight rein on game prices. More flexibility in pricing would encourage more game innovation. The current "one price fits all" business model is too limiting.

Definitely not! I'm sure publishers and platform-owners will argue about the rising costs of development (true to a certain extent), but we're talking about _games_! It's recreation/entertainment and therefore I argue we must find a way to keep costs low, especially if we want the holy grail of mass market adoption! I can't believe that the costs of duplicating DVDs are rising! If I can purchase a AAA Hollywood blockbuster movie, that cost the studios $100M USD to make, for under $20 USD then I think we need to take a long hard look at why the price "needs" to increase.

No, I believe that the games that are created need to be more diversified so that a wider audience will be buying those games thus relieving the need for companies to raise the price.

I don't think it is necessary or desirable to increase prices for next generation games. First of all, current game prices are already very high. The high prices make it hard to open the market for non-hardcore gamers. Not many casual gamers would shell out $50 or $60 for a game they may only end up playing for a few hours (not many people can afford 30+ hour games, and not many would actually want to either). Second, I believe a major reason development budgets are ballooning is because many developers are trying to make up for the lack of ideas with ever more convoluted games. They are trying to put every feature they've ever heard of in a game in a desperate attempt to give gamers more reasons to buy the game. Many games today try to be a FPS, strategy, fighting, shooting, driving, and cinematic game all at the same time. The end result: more developers are needed to build all the features, and more marketing needed to try to make it the big hit that it consequently needs to be. In conclusion, I think that a better approach would be to create smaller, cheaper games that concentrate on fewer things but do them better; and try to reach a wider audience by creating more games with unique features rather than fewer games that try to please everyone.

Retailers take about 45% of the cash paid for a videogame. Developers get about $1 from every $35. The truth is that dev costs are totally irrelevant and have been for several years. Most consumers are unaware of this and would be furious to discover it. Retailers are unquestionably the 'secret villain' of the games industry. Remove them from the equation via digital distribution and I think you'll find that the price could actually come down. But they won't, because publishers are greedy too, and will keep the difference for themselves.

NO! In fact, I think they should decrease. I think sales would increase if games were less expensive. I'm much more willing to spend $25 than $50 for a game. Personally, I usually wait until the game appears in the bargain bin or buy it used.
-Rich Cacace, Pensacola Junior College

No. If anything they should decrease. By increasing prices you lose the "spontaneous buy" option. When games cost $50 or more people have to "budget" when considering a purchase. If the price were around $25 your average gamer would not be as careful when making a purchase.
-Richard Cherry, York Int

No. This would only encourage people to wait a few months or more for prices to decrease.
-Chris Wood, Victoria University Wellington

No. Not only do retailers like to maintain that key "under $50 price point" but increased price stands to make for ballooning budgets that will most likely strangle innovation. I guess it'd be okay to charge more for the big budget blockbuster games but those games should not make the smaller games more expensive to make and sell. I'm hoping there will still be smaller budgeted next-gen games.
-Nat Loh, Toys For Bob

No. Games already cost too much these days. The standard $50 price tag is one of the main things that keep games from becoming more mainstream. If we were to lower the standard price to about $30 I think many companies would see their profits double from increased sales, if not more. Raising prices will only turn away casual gamers and encourage piracy to rise. One of the main reasons people say they pirate games is because they can not afford them.
-Derick Eisenhardt, Electronic Boutique

With the game industry model mimicking the movie industry so much, I believe video games should cost no more then the blockbuster DVD movies you find at the store.
-Jason Blazkiewicz, Akurasu

Blockbuster titles may be able charge those special edition prices to everyone, but most games can't be sold for more than fifty bucks. If game prices go up, the used game market will continue to expand, and the number of independent developers will continue to diminish. I believe game experiences need to get shorter and cheaper in order to increase audience size and game quality. If we want our industry to become like the movie or magazine industry, not only must we provide top-notch content at an affordable price, but we must also provide content that doesn't force our customers to sacrifice their careers, families, or other interests to enjoy.
-Jordan Blackman, NovaLogic

It would probably only hurt the market. If prices of games are increased, more pirating will probably occur. Ironically, I think reducing the prices might yield better profits.

In most cases they are already higher than they should be. I think the industry should move to even more price differentiation, with games available in a wide range of prices depending on production values, franchise costs, etc.
-Marc Ordinas i Llopis, Tragnarion Studios

No, if anything they should decrease to open in up to a whole new group of purchasers. There are tons of people out there who love to play but just can't afford it. Lower the price and I think they would sell enough more to easily offset the loss.
-Jeff John, Jeff John Sculptures

While I acknowledge that overall profits need to increase in order to avoid further studios closing as we enter the next generation of consoles, I don't think a higher price is the answer. In our industry, the best games finance the rest. This is what separates us from something like the movie industry where even an average title will appeal to enough people that it will likely make a profit. So I think the answer, ironically, may lie in lowering retail prices. Gaming needs to keep expanding as it has in the past, but gamers also need to buy more titles, and this can only happen via a more mass-market price.
-Robert Green, MDS

No. Rather, I believe the retail prices would need to decrease. With the expansion of the video gaming market, the decreased prices should open up the video gaming market to countries which have yet to fully welcome it yet, and would decrease piracy to an extent.
-Zhansheng Phang

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