Open Letter to the Game Publishers: Stop Raping Gamers' Wallets!

Dear Game Publishers, what are you thinking? For years, loyal supporters of your games have dealt with ridiculous price increases, overpriced downloadable content, and silly DRM schemes. Yet now, in these most critical times for the game industry, your idea of repaying them is to make us pay even more? Really?

Furthermore — stooping to an all-time low — EA has stepped up for your industry and decided that users should be pushed (if not forced) to purchase new games only, punishing gamers who legitimately purchase used games. The idea behind this is essentially to make them pay extra money for… nothing (or as they put it, “bonus features”, which come with the game when you purchase it anyways).

The fact is that the industry is going through one of its worst downturns in years, proving that the game industry is not recession proof. This should enlighten you guys as to what is obvious to most: people want more value than ever before. But instead of looking for ways to provide that value to gamers, you look for ways to punish them instead.

So I have a simple question: have you guys lost your freaking minds?

 

Pushing The Wrong Buttons

The average price for games has gone up over the years: no doubt in response to the massive amount of effort that is required to create these games. But as the initial investment goes up, it shuts out those gamers who would like to play your games but can’t afford to. It also makes people consider their purchases more carefully — driving them to purchase games that can provide the most bang for their buck.

But things have gone wrong. For example: who was the genius that got the brilliant idea that withholding and then selling game content as DLC or expansions would provide more value? Instead of giving your customers the whole experience, some of you specifically plan on releasing that content later as DLC that could have been already been placed in the game. Just another scheme to make more money, right?

But this isn’t The Sims! Eventually gamers are going to see right through this. And while history would predict that they will pay, regardless of the price. It will still turn even more potential customers away.

Now I haven’t purchased a single computer or console game in well over four years. I have always rented my games from GameFly, and it is worthwhile for me because I typically only play your games for a few hours anyways before I send them back. So if I have managed to avoid paying for your expensive titles for several years now — and I am fully willing to pay for games if I really want them — how do you think millions of other gamers feel about paying for these games?

How many others are there just like me that you have turned away?

It’s no wonder why rentals and used games are so appealing. Hint: it’s your customers telling you something.

But another issue that seems to make you guys steam is piracy. You hate that people acquire, circumvent DRM, and play your games without paying.

But did you ever step back for a moment and question why this happens? Maybe it is the price, of all things, that has been a motivating factor. Maybe if the barrier wasn’t so high, those people who have previously pirated your content would actually pay for it instead, because I am sure that many of them would love to support your efforts.

In case you didn’t notice, the world has been going through some pretty serious economic problems, you know? So it is time for the industry to adapt.

(Update: Here is a great forum post by Stardock CEO Brad Wardell that goes in depth about how piracy has impacted PC sales of his company’s titles.)

 

Second Life

If you want to better yourselves — which you should, before things get worse — you could start off simple.

How about lowering the barrier to entry? You say you want the revenues from a $60 investment per gamer, right? Fine. So why not charge $30 and entice twice as many gamers to shell out the cash for the game? You potentially make the same amount of money (if not more), yet you get significantly more exposure and engagement from gamers. This means more opportunity. And everyone knows how you could (and probably would) exploit that.

(Update: Many have been claiming basic economic theory against my idea of cutting the price in half and doubling the sales. Many are calling me crazy. However, it has been proven to work. Not only that, but sales have exceeded all expectations in these cases. For example, digital distribution platforms like Steam and GamersGate report massive sales boosts by reducing the prices slightly. Paradox Interactive noted a sales increased of 5,500% by temporarily cutting the price by 75% for some of their titles on Steam. That doesn’t sound crazy to me, and game publishers should take notice!)

Downloadable content. You could have developers put more effort into developing DLC, and those gamers who are passionate about your games will almost certainly pay for it. The lower barrier to entry means that more gamers will have the opportunity to purchase this DLC, which could, in turn, eventually result in you make significantly more money than you initially intended! Yes. Making more money! How crazy of an idea is that?

The problem with that is that there will be some of you who urge developers to withhold development of content to provide a more bare game. Thus you would require gamers to purchase DLC to have a proper experience. Don’t do it!

And finally, let’s talk about this whole used games mess. Most importantly (before you guys start following EA’s plan to punish those who purchase used games), you could come together to sell used games at a discounted price, while still getting a piece of the pie. Yeah, it is that simple.

Obviously, there are gamers who want to purchase your games without paying full price. They wait and buy used games, resulting in a missed opportunity for you to make money. This also happens at a time when the amount of revenue for your games have probably fallen off quite a bit. So why not provide easily accessible services to compete (or work with) with the likes of GameStop, GameFly, and others to provide used games at a discounted price, thus giving you a way to make money from used game sales? Why not work with the used game market to reap in more profits and sales instead of punishing it?

It makes sense. You make money that you wouldn’t have made otherwise. The gamer gets a great product that can also generate money through DLC. And everyone goes home happy.

(Update: It appears now that EA isn’t the only publisher thinking that they should charge $10 for… well… nothing. Ubisoft is considering charging you an extra $10 as well, simply for purchasing a used game. Every publisher is probably going to adopt this scheme now. So thanks for nothing, EA. Sigh.)

 

Game Over

But it is clear that things need to change, especially before things get worse.

The game industry is at a critical point where newer technologies are set to be released, being lead by the idea of 3D gaming experiences, mobile gaming experiences, and social-aware gaming platforms. It is quite possible that games as they are known today will not exist as they are in a few years down the line. And all these plans that you come up with to extract more money from gamers will likely speed up the demise of your industry.

It’s only a matter of time. It happens in every industry, and while the game industry has managed to avoid it, one can’t help but wonder how long that will continue to last.

It can’t. Not unless things change. Not unless you change.

Written by James Mowery

James Mowery is a passionate technology journalist and entrepreneur who has written for various top-tier publications like Mashable and CMSWire. Follow him on Twitter: @JMowery.
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104 Comments »

 
#1
Elliott
May 18th, 2010 at 8:57 am

Good article… I agree with you. One point you didn’t cover is how much impact good quality flash games have had on the industry. Is the ever increasing number of quality flash games going to lure players away from purchased games?

 
 
#2
Anonymous
May 18th, 2010 at 9:31 am

While not to side with any particular evil, but there are some big flaws in this article.

1. The Used Game Market does not actually pay the actual developers, only the resellers pocket the exorbitant profit on it. Places like GameStop pay cost on the product (about $40-45) on the unit, sell it for $59.99 on average. While the meager looking $9 doesn’t look like much, GameStop’s primary goal is to get the purchaser (we will call him Purchaser Alpha) to play it and then return it for trade-in credit. GameStop gives the Purchaser Alpha about $10 to $15 in credit, they buy another game. Then another purchaser (let us call him Beta), Beta comes in and sees that used game, the game that already paid itself off the first time. GameStop is going to charge near full price and gain all the profit off of that. So they take in more than what the actual people who created the game do. And, often, this repeats itself. I have had friends who have worked at GameStops and they can attest to it that most of the profit GameStop makes is in the aftermarket.

2. GameStop recently announced that their huge profits were created by the used game market. It is the reseller that is making the big cash, not the developer. On top of that, most of the money that that does go to the developer has had the publishers hands in it. So in a single run, the publisher will make about $30 a game, the developer will make around $10 to $15 a game, and the reseller will make $60.

3. Imagine if you run a business, you sell say lemonade. While business isn’t thriving, it isn’t going to well. You have few major return customers, but one of them buys a lot of it constantly. Then you turn and find out he has been reselling it at twice the price and is making double your profit. How do you respond to that? Well for the Games Industry, their only current recourse to return maximum profit is Downloadable Content.

4. Actually game prices have stayed rather level over the last decade. If you look back, the most expensive era was the 32-bit/64-bit era. Nintendo 64 games cost about $70-80 a pop (depending on the game). Playstation games were $60, and then dropped down ten dollars in about two years. Meanwhile, Saturn was still at $70-80 a game. 3DO were the same, and so was Jaguar. The only difference now is that they are releasing larger packaging schemes that cost the buyer more. To add to that, they are charging huge prices for DLC that do rack up the overall cost. But at base price, not much has changed.

 
 
#3
GamerJoe
May 19th, 2010 at 6:42 am

1. No secret here, the found the nitch that the game publishers ignored. Maybe they should offer buy-back games.

2. I’ve not heard any complaints between gamers and gamestop about gamestop’s prices

3.a Your example is flawed. Your example would tell me that I have a marketing problem. In your example, if the purchasers of lemonade who were paying double found out about the ability to get it at 1/2 price from me, then they would beat a path to my door. Unless there was a convenience factor involved. But GameStop isn’t buying the games from the publisher and doubling the price. Therefore, it’s a bad analogy.

3.b A more correct analogy would be if Sony was upset that TV buyers were buying last-year’s models for less from eBay instead of the latest, largest, most hyped and over spec’d TVs from a retailer. In this case, what should they do? I’d say work to make them cheaper, drive the price so low that the resale market falls off of the bottom. Look at movie prices for example. Compare the prices of an old release of Terminator vs Avatar.

 
 
#4
James Mowery
May 18th, 2010 at 10:50 am

#2

You might want to reread my article, as I addressed most of what you have pointed out.

This article does address your first point. I pointed out the fact that the game industry should either compete to enter the rental business or cooperate with GameSpot, as noted in my article. It is obvious that resellers are making tons of money from used games. GameStop, Best Buy, Walmart, GameFly, and many others are already in that market, and they are making a killing.

But what would you prefer the gamer to do: not play the game at all? If a gamer is purchasing used games, it is obviously for a reason: the games are too darn expensive for them or they see greater value from those games.

As for your second point, I also noted this in the article:

“So why not provide easily accessible services to compete (or work with) with the likes of GameStop, GameFly, and others to provide used games at a discounted price, thus giving you a way to make money from used game sales?”

Game publishers are shooting their own selves in the foot in this regard. They can’t blame the retailers — they are geniuses for taking up a space that game publishers are too afraid to enter.

As for your third point, I am mixed, and I also brought this up in the article:

“You could have developers put more effort into developing DLC, and those gamers who are passionate about your games will almost certainly pay for it. The lower barrier to entry means that more gamers will have the opportunity to purchase this DLC, which could, in turn, eventually result in you make significantly more money than you initially intended! Yes. Making more money! How crazy of an idea is that?”

Also, if someone is buying my product and reselling it for twice that much, then the person buying my product is a genius, and I would want to figure out what they were doing. Right? Again, it is a case of game publishers’ greed getting in the way of a great monetization opportunity.

For your fourth point, I disagree completely. In the United States, games have primarily been around $49.99 price range up until 2004 to 2005, when Electronic Arts decided they would experiment with pricing in the $59.99 range. Also, many Nintendo 64 games and PlayStation games were around $30 to $50 range, if I recall correctly. And now we have seen prices approach the $80 to $100 price range with “collector’s editions” and such.

But game publishers obviously want to charge even more. Perhaps we will see prices in the $69.99 range in the coming years.

But DLC and digital distribution is the future. Those publishers/developers who figure out that selling their products at a much cheaper price (thus selling more product) and making up for it in increased engagement with downloadable content sales will come out on top.

 
 
#5
Anonymous #2
May 18th, 2010 at 1:36 pm

Developers/Publishers cannot go into the used game market as they will then be competing with their customers. Additionally, there is the HUGE problem of actually building out the services, warehousing, inventory management, accounting, etc. to make it all work. Their only real recourse is to try something different, and that is exactly what they are doing with the bonus content included with new purchases.

This strategy absolutely screws over the gamers that buy used games or use services like GameFly. However, they don’t care because they don’t make any money from these users anyway. This strategy is designed to get money from exactly those gamers that they currently get none from now. And, it has the added bonus of not having a negative impact on the gamers that they do make money from: those gamers that buy new games.

From the developer/publisher perspective: No lose. They will most likely get more money out of this arrangement.
From the gamer perspective (new game buyer): No change at all.
From the gamer perspective (used game buyer): You are going to have to pay more, and that money will go to the developer/publisher when none went there before.

 
 
#6
James Mowery
May 18th, 2010 at 10:53 am

#1

I didn’t want to touch on that topic, because that could be a whole other article in itself. However, you are spot on. Social games and Web-based games are becoming very popular, and many younger gamers are almost spoiled with the amount of gaming they can have for free. From Facebook to Miniclip, there are tons of experiences. And these games are social, which provide more engagement than ever.

It will be interesting to see how it turns out.

Personally, I am very excited to see how the Civilization game coming out for Facebook will work, as I believe it will be watched very closely by other game publishers and developers as well.

 
 
#7
Robert
May 18th, 2010 at 1:35 pm

Actually I still have my Sega Saturn collection and receipts, prices ranged from $49.99 to $69.99 and N64 games ranged from $59.99 to $79.99. Prices for brand new games have actually gone slightly down in general since the 32/64 bit era.

 
 
#8
sdfffs
May 24th, 2010 at 3:46 am

You are dumb as hell, games have never cost over 50 dollars new UNLESS you are buying collectors edition… what kind of stores are you buying these regular games from that cost 75 bucks? seriously

 
 
#9
Leo
May 24th, 2010 at 7:44 am

Sdfffs, Robert is not “dumb as hell”. In fact, most new games cost around 75$ nowadays (including tax). In the future, when you’re about to insult someone on a subject where your knowledge is lacking, swallow your ignorance and stfu.

 
 
#10
Davie Jones
May 18th, 2010 at 2:05 pm

Another point in this is that if you encourage piracy (because of high prices), that creates a snowballing effect. As more people turn to piracy, it becomes a larger social network, which makes it easier to access, which makes it easier for more people to discover and do. Piracy creates it’s own momentum.

In other words, it isn’t just a matter of lowering prices, but that the longer you keep them high, the less effective it will be when you do lower prices.

 
 
#11
Craig
May 18th, 2010 at 2:13 pm

Very good article… I would like to point out one other example where greed and self-interest has greatly exceeded the Developers’ priorities over their customer (the ones they make the games for). Activision, in conjunction with now currently semi-defunct Infinity Ward, not only ignored the majority of Gamers who wanted a game with dedicated servers available in CoD: MW2, but also hard coded their game so that a Gamer MUST be logged in to Valve’s STEAM Cloud in order to play Multi-Player. This is a big scam, just as bad as DLC, in that Valve uses an anti-cheating system, programmed to merely check your game’s core DLL files to see if they have been “modified”. The problem with this is that they have a “bans are permanent” policy, and their bans are triggered automatically, based on Coded logic. They run around with the biggest and most ignorant notion I’ve ever seen of any Developer (I’ve seen in my 18+ years of programming), that their code is flawless and “has no false positives”. The problem with merely checking core file modifications is that Computer Viruses can accidentally trigger this VAC system to ban you (I’ve seen it, had it happen to me already, and even shelled out more $ to buy a new game to purposely replicate the problem, and succeeded). And once your account is banned, you can no longer play Multi-Player online with that purchase of the game. You have to obtain a new CD key (buy a new game), and then create a new STEAM account to tie it to. This agenda tries to push Gamers into buying multiple copies of the same (still, 6 months after release, at 59.99) game in order to increase profit.

 
 
#12
Rezzurekted
May 18th, 2010 at 10:01 pm

You have a very good poin there, Its an utter joke and beyond me how they get away with it!

 
 
#13
James Mowery
May 18th, 2010 at 3:36 pm

@Robert

Well then. I stand corrected. However, I recall most of the purchases I made being around $50.

Maybe the extra cash was to pay for the extra slots in the cases for those ridiculous memory cards. Haha.

 
 
#14
James Mowery
May 18th, 2010 at 3:40 pm

@Davie Jones

That’s an interesting theory. However, some would say that depriving people of something might make its presence more important. (For example, people without water in third-world portions of Africa probably cherish every drop they can get.)

That said, I agree completely about what you have said about high prices and piracy.

 
 
#15
James Mowery
May 18th, 2010 at 3:42 pm

@Craig

Couldn’t have said it any better.

Also, that new DRM scheme where users have to be connected at all times — for Silent Hunter 5 and Assassin’s Creed 2 — is pathetic.

 
 
#16
Raiders757
May 18th, 2010 at 4:23 pm

One question needs to be asked here. Do used game retailers have to pay the same fee used music retailers pay to copyright holders and publishers? If so, those defending the industry have no legs to stand on. I can’t imagine the video game industry not using the same business model. It would be foolish is they weren’t. Copyright holders and publishers in the music industry get a small piece of the used pie, so the playing field is somewhat balanced.

 
 
#17
Lai-Lai
May 18th, 2010 at 6:43 pm

Average cost of a game cartrage in the 90s: $50.

Average cost of a game disc today: $50.

Everything was cheaper in the 90s, especially the early 90s. So even though the prices haven;t gone up, it’s liek they’ve still managed to get cheaper.

 
 
#18
Jo Diggs
May 18th, 2010 at 6:46 pm

I was looking at a game at Best Buy the other day, $70! Yeah right, are they smoking crack? An hour later I found the same game used at Game Stop $25! Do the math!

Lou
http://www.web-anonymity.cz.tc

 
 
#19
Dave Jones
May 18th, 2010 at 6:52 pm

This article makes many obvious errors. First off, look up the concept of supply and demand in an economics textbook. Consumers’ demand curves are downward sloping, so as you correctly point out, the more the companies charge the fewer consumers will buy. However, total revenue = quantity of sales x price. It’s a simple equation. Do you really think the game companies didn’t estimate the effect on their revenue from a price increase? Heck, why not suggest to them that they offer their products for $1? Then they’d make $trillions according to your logic.
Second, you say that changes in gaming are being driven by technology. Do you think that cutting the price of current technology games from $60 to $30 will prevent the social and technological evolution of gaming? It might slow it by a year or two, but there will be no lasting impact. Game companies would be stupid not to maximize profits from a technology that you argue may soon be obsolete.
Finally, higher prices are paid by “more valuable” consumers. A consumer who recklessly buys 10 $30 games will spend little time on each game so they’re less likely to buy additional content. On the other hand, a consumer who is forced to carefully decide which game to devote their attention to because of higher prices is more likely to be committed to that particular game and pay for additional content.

 
 
#20
Jason Dixon
May 18th, 2010 at 7:23 pm

While your article was well-written and fairly reasonable, I find it laughable that you consider yourself a subject matter expert on the pricing model for software. Game publishers have studied and refined the retailer, used reseller and DLC markets over years. They’re not ignorant. They understand what the market will and will not bear. They’ve seen that DLC is a sustainable model, and they will continue to shove it down our throats.

You give your own experience with GameFly as an example of why traditional game sales will falter. Why do you think DLC is being pushed so hard by the publishers? It bypasses the physical media outlet, pinching profits out of retailers like GameSpot and services like GameFly.

Think about it.

 
 
#21
Gamer 1
May 18th, 2010 at 7:29 pm

you really know nothing about the gaming industry at all. nor business in general. it’s one of the most ignorant rants i’ve seen in a long time. almost all your assumptions are wrong. i’d get into it, but there’s so many problems with your post, i don’t want to waste my time educating someone who is clueless.

full disclosure: i was laid off by a huge gaming company, so i despite them. but it still doesn’t make your blog post correct.

 
 
#22
Leo
May 24th, 2010 at 7:47 am

He despites them.

 
 
#23
smoothla
May 18th, 2010 at 7:36 pm

go back and read this author man n slap your editor. many grammar errors. so annoying. (as i go ahead and don’t capitalize at the beginning of each sentence). but good article regardless. i am indeed one of those people who sit on the sidelines waiting for games to go on sell recently. i was spending way too much money on games and i generally try to beat them. with services like goozex around it really lets you maximize your OWNED game. so in short, fuck pc games at $60, ill just wait for the steam sell.

 
 
#24
Andrew Massari
May 18th, 2010 at 7:37 pm

Quote:
“But another issue that seems to make you guys steam is piracy. You hate that people acquire, circumvent DRM, and play your games without paying.

But did you ever step back for a moment and question why this happens? Maybe it is the price, of all things, that has been a motivating factor. Maybe if they barrier wasn’t so high, those people who have previously pirated your content would actually pay for it instead, because I am sure that many of them would love to support your efforts.”

I would really love to drive a Ferrari. Further, because they make such beautiful and elegant cars, I’d like to support the manufacturers of Ferrari by purchasing it. Unfortunately it is quite a bit out of my price range. I guess I’ll just steal one. I mean, I’ve been going through some serious economic problems recently. That’s cool with you right?

Also, as to your response that “the game industry should either compete to enter the rental business or cooperate with GameSpot” because they loses millions of dollars to the used game market, are you seriously crazy enough to believe that GameSTOP would share that revenue for any reason whatsoever? Further what do you call selling content via services like Steam or DLC OTHER than trying to compete in the market?

Do your research next time friend.

 
 
#25
sick of americans
May 18th, 2010 at 8:26 pm

Americans are always going off about new game prices, “$70 for a new game! what are they, smoking crack”

how about you guys sotp being so ignorant for once and take a look outside of your country. Australian prices start out at $100-130 aud, thats about 90-120usd.

as for teh article. good points but all companies are selfish.

 
 
#26
gabeygoat
May 18th, 2010 at 10:11 pm

Video game prices compared to rape? sigh…

 
 
#27
Hates Oversensitive People
May 19th, 2010 at 3:48 am

Rape:
3. Abusive or improper treatment; violation: a rape of justice.

It’s a correct adjective. It doesn’t just mean molesting people. Get over it.

 
 
#28
mitchell
May 18th, 2010 at 10:34 pm

I hate current pricing, at present I mostly stick to indie games and steam sales. But this article is unconvincing. Your “Charge $30 and get double the sales, maybe more!” statement seems pretty naive. Do you have any economics background? Do you think you have some insight that the companies don’t, especially knowing that they certainly have people employed specifically to examine the effects of pricing on profit?

You and I are in the minority, and sales numbers for games like modern warfare 2 are proof. And that will be true until something changes the minds of the consumers, not the companies.

 
 
#29
Ama
May 19th, 2010 at 2:18 am

Step 1: Make mediocre game.
Step 2: Pour tons of dollars into advertising.
Step 3: Profit like you never have before!

/The game industry has become the movie industry, only a few reliable studios left.

 
 
#30
Glesa
May 19th, 2010 at 2:21 am

The Stimulus Package broke the record for the fastest selling item on PSN.

The article is right, game publishers aren’t entirely to blame here, it’s the consumers as well. If people keep throwing money at map packs, then publisher heads like Bobby Kotick are only going to interpret it as something the consumers are just fine with. Consumers need to change, but then again the actions of the mainstream audience are overpowering the actions of those who are keeping up with the industry.

 
 
#31
Jd
May 19th, 2010 at 2:22 am

The thing is they try to blame pirates for lowering sales but really most people I know that pirate a game would not have bought it in the first place. When a game cost 50-60 dollars most people cant afford to buy a bad game and just go Oh well ill buy a new one tomorrow. Lowering the cost is only one solution another would be to stop making short awful games or even mediocre ones. I would never pirate games like Half-life 2 or Elder Scrolls 4.

 
 
#32
Apurva
May 19th, 2010 at 8:27 am

@everyone who is comparing Cartridge and Disk prices..

Manufacturing cost of a video game cartridge is very high compared to the CD/DVDs .. So the expense in manufacturing justified the prices.
There is no reason for the games on DVD to be so expensive.

@the Author of this article…

I completely agree with you… your article has the words that were storming in my brain since a long time now. Whose smart idea was it to come up with DLC?? I think its a plague that started in consoles and is spreading rapidly on PC.. Its not like “there’s no way we should get that content for free “… look at Valve and the way they’re treating Team Fortress 2…. I played that game in the beta and when it first launched … after which I just started playing it again a few weeks back .. So much more content ! 100+ updates .. so many new maps and game modes … and i never paid a penny after purchasing the orange box to access all this new content..

I think the problem is that the developers and publishers have lost their passion for their own products… which is really really sad

 
 
#33
Ian
May 19th, 2010 at 8:56 am

Open Comment to Gamers:

We’ll make games cheaper when you stop expecting us to spend so much making them.

Sincerely,
Publishers.

 
 
#34
Adam
May 19th, 2010 at 9:01 am

I paid $49.99 for Q-bert on the Coleco Vision in 198?

 
 
#35
James Mowery
May 19th, 2010 at 9:12 am

@Dave Jones

Your theory is sound. However, there are numerous examples of indie developers slashing prices and sales doubling. But I hear you.

 
 
#36
James Mowery
May 19th, 2010 at 9:15 am

@Jason Dixon

I never claimed to be a “subject matter expert on the pricing model for software.” It is simply an opinion by a concerned gamer. :)

As for the rest of your comments, I addressed all that in the article. And I do agree completely. DLC is going to be a huge market for game publishers and developers in the future. That is why I suggested that these companies lower the barrier to entry and exploit DLC even further. It will be more profitable and less expensive to distribute in the long run.

 
 
#37
James Mowery
May 19th, 2010 at 9:18 am

@Andrew

“are you seriously crazy enough to believe that GameSTOP would share that revenue for any reason whatsoever?”

I’m not crazy at all, actually. GameStop actually wants game publishers to participate. Check the linked source in the article: http://gamersyndrome.com/2010/video-games/gamestop-publishers-should-participate-in-used-game-market/

 
 
#38
James Mowery
May 19th, 2010 at 9:23 am

To all those who claim the economics are incorrect in my thinking of cutting the price in half and doubling the sales. It has actually been proven to be overwhelmingly successful in digital distribution platforms: http://www.thedrmnews.com/games/lower-prices-increase-revenue/

“The successful product launches, sales have been significantly strengthened by temporarily reducing the price within three months from launch, for example over a weekend, with up to 75%. Our test case has shown sales increases from 1500 to 5500%.”

The numbers don’t lie, regardless of economic theory. :)

 
 
#39
Matt
May 19th, 2010 at 9:48 am

@ James

please in addition to reading articles take the time to understand them.

http://www.thedrmnews.com/games/lower-prices-increase-revenue/

“The successful product launches, sales have been significantly strengthened by temporarily reducing the price within three months from launch, for example over a weekend, with up to 75%. Our test case has shown sales increases from 1500 to 5500%.”

” temporarily reducing the price” this is done for a weekend, along with usually a front page post about the game saying “Get it Now @75% off” This also generates massive free advertising informing people of the deal as well as the game at all.

Often times I have purchased games on Steam for these deals. Most of the time however I had never heard of the game before, they got a sale they would never had gotten if not for the advertising increase.

On a side note your entire article while well written showed a lack of understanding regarding sales/Advertising/DLC. Before writing on any topic you should investigate why developers/publishers do the things they do. For example: Developers withhold content to later put it in DLC, they do this for a number of reasons including to increase revenue without increasing upfront cost and to increase the lifespan of a game. We as consumers prove ourselves willing to do just this.

Look at the recent Modern Warfare 2 Stimulus Package which was priced at a unheard of $15. I thought they would have to lower the price…… however it has sold over 3.5 million copies. Which is an astonishing $52,500,000 in additional revenue and mostly profit considering it is only a few maps.

Am I happy to pay that for a few maps? No. But for an additional storyline for Dragons Age or Mass Effect? Yup

Maybe the lesson here James is that the entire world may not be just about you.

 
 
#40
James Mowery
May 19th, 2010 at 10:03 am

@Matt

I don’t understand your comment. You actually agree with me on the DLC part, but you argue that my article demonstrates a lack of understanding? Please clarify. Thanks!

 
 
#41
Gerry
May 19th, 2010 at 9:25 am

Not that there’s tons wrong with your article, but there are a few things worth mentioning. Gamestop provides gamers who trade in their games with credits. These credits are most often used to buy new games. It’s not that the used games market is hurting the industry, its actually helping it. They’re just whining because it’s hard to see the slice of the pie they’re getting. Not only that, but having a specialty retail chain for Videogames (IE GameStop) without having a used market isn’t the most viable business proposition, a used games market only makes it more reasonable to run a specialty chain. And seeing as GameStop represents a large chunk of all new game sales, it’s probably best not to mess with their business.

It also doesn’t help that publishers have done a horrible job of segmenting the market for themselves. With movies, customers have a million options, they can see it in theatres, in 3D or 2D, on IMAX or on a regular silver screen. They can wait for the DVD, and rent it, buy it or stream it from an online service, they can wait for a PPV option on TV, they can wait for it to be aired on a movie channel on TV, or they can wait for it to be aired on a network. And the movie industry makes a profit from all of these options. That’s good market segmentation, each level gradually lowering the bar to entry.

What should be happening is this: A game should come out with a bonus sword or vehicle or mount etc, as an extra for buying the game new. Don’t charge more for the game BECAUSE there’s a bonus, but throw it in as a true extra on a finished game. Create DLC that isn’t ripped out of the finished product in order to sell DLC. Make it provide value. 2 months in, lower the bar to entry by removing the special bonus item, and bringing the price down by 1/3. 2 months later put the game on sale and lower it from the original price by 2/3. Coincide your DLC with your price drops, so that there is more incentive to buy it. Sure, there will still be people who buy it used, or who rent it, but if you create proper DLC then you can usually make some DLC sales to those that bought it used. Not only that, but if you bring the price down every few months, then there is no reason that someone would buy the game used when a new copy is 2-3 dollars more or even the same price. In addition, if a customer who rented it and enjoyed it feels like playing it again in 4 months, they’ll be more likely to purchase it at $20 than at $60, and more likely to purchase rather than rent. There are all sorts of advantages to properly segmenting the market.

However, initially offering your game at a discounted price from the norm only makes your game look cheap. So in that way your suggestion to bring prices down from $60 to $30 won’t work. Budget games are set at budget price points. Not only that, but lowering the price to 1/2 doesn’t mean that you’ll make 2X the sales. Supply and demand doesn’t work like that. It’s not a directly translatable scale. However, on a sliding scale of price/time, the only barrier to entry is time. Can’t afford to play the new GTA? Wait 4 months, and fork over 1/3 of the cash.

 
 
#42
James Mowery
May 19th, 2010 at 9:25 am

@Apruva

Game publishers will find ways to exploit DLC to extract even more money while providing less game at the same cost. It will happen. Perhaps it is already happening (I’d bet money on it.)

But that is what we have to contend with, and that is a problem the game industry and its consumers will face for quite a long time as the platforms and distribution of content changes.

 
 
#43
anonymous34
May 19th, 2010 at 9:55 am

Cutting a price in half does not mean a double of your sales. Doesn’t work that way. And yes, maybe a 75% reduction meant a 5,500% increase in sales for some random game on steam, but major releases of console games absolutely do not see these increases. The trick is to find the price the majority of people will pay, so they are able to maximize profit per individual sale and also make sure their total number of sold games is high. Right now, $60 for premium new games has been tried and true as the point at which they maximize profits. Enough people buy them to justify the high price. I went to 3 stores yesterday before finally finding one where Red Dead Redemption wasn’t sold it. It’s price? $60. Gaming companies will make games at the highest price people will still by them at. It’s called economics, and until a protest of these prices occurs (which it won’t) they will continue to do this.

 
 
#44
James Mowery
May 19th, 2010 at 10:00 am

@anonymous34

They don’t see these increases because it has yet to have been done. So of course you don’t see these increases on consoles. :)

 
 
#45
anonymous34
May 19th, 2010 at 12:21 pm

So let’s just continue to use Red Dead Redemption as the example…

It’s estimated to sell 4 million by the end of the summer. Do you truly believe that dropping the price to $15 would result in an increase to 224 million copies? I think not. The volumes of sales they deal with is completely different than games on Steam that can increase their sales by 55-fold and still not sell that highly (in the relative sense).

What I am trying to say is that your comparison is not valid. Nobody is denying that lower prices will result in higher sales numbers. But they won’t (necessarily) result in higher sales dollars. These companies have people taking care of this sort of thing… they know their sales numbers extremely well (and research them extensively) and if they would make more money selling at a lower price, they would most certainly do it. Again, the point is that people are still buying games to the point where multiple stores are SOLD OUT… so why would they lower the price?

 
 
#46
James Mowery
May 19th, 2010 at 1:12 pm

“But they won’t (necessarily) result in higher sales dollars.”

To which I could also easily say, they could very well could result in higher sales dollars. It’s all theory at this point. However, there is evidence to back my theory up. You haven’t provided me with any evidence to back yours up, however. Also, you are forgetting the potential revenue streams of DLC, which could easily make up for the loss in initial sales.

Anything is possible.

 
 
#47
Udi
May 19th, 2010 at 1:51 pm

Why doesn’t the faltering movie industry simply slash the movie ticket prices by half then to get higher sales?

Why doesn’t GM simply slash the prices of their cars in half to increase their sales and dig themselves out of the hole?

Why? Because it’s an oversimplified solution that doesn’t work in reality because it ignores numerous other economic considerations.

 
 
#48
James Mowery
May 19th, 2010 at 1:56 pm

You are comparing vastly different industries, which also makes no sense in real-world application.

With a movie, you buy a ticket, you watch the movie, and the transaction is done.

With a car, you buy the car, you drive the car, and the transaction is done (except when you have to pay the dealers to fix it for you. Ouch).

With a game, you buy the game, you play the game, and you are presented with more opportunities to spend your cash. Many more opportunities. This comes in the form of DLC. This is, quite possibly, the future of the game industry. And I will be writing about that in the future, with insights from those who work in the industry as well.

 
 
#49
Rob
May 19th, 2010 at 3:22 pm

Well that just goes to show you are a just out to prove anyone wrong with this little web rant. Video Games and Movies fall into the same industry as it is a form of entertainment and if you buy a movie you’re not done, you can watch it over and over again just like you can play a video game over and over.

I like how you use the oldest analogy in the book and compare this issue to a car. Its not like you cant go back to the dealer and buy rims, tires, oil changes and other accessories…. ooh wait you can.

I guess you think that some how you are going to change the world wishing that some game company will read this and be like

“You know maybe Jame Mowery is right we do charge way too much for our games, lets lower prices of out video games because he posted a rant on the Internet.”

You base the price on the product for its cost of production and value that the customer will get out of it, with a good video game with lots of replay value why is $59.99 too much to ask, and you can’t compare the collectors editions to the actual cost of the game because you have the option of not spending how ever much more it is or just spending the $59.99 to $69.99 for just the game.

If you not willing to spend the money on something that you will get hours of enjoyment out of then maybe video games just are not for you. Or continue to rent or buy them when they become part of the greatest hits collection and if you don’t like that then suck it up move back into your mother’s basement (best guess too late because you still do) get a higher paying job or second one if need to feed this video game addiction you have and stop crying about it and looking for people to argue with.

 
 
#50
James Mowery
May 19th, 2010 at 5:09 pm

Personal attacks? Come on now, we are more civilized than this, aren’t we? Don’t worry, I’ll go crawl back in my hut soon. :)

I didn’t place this article on the front page of Digg. People who agree with me did. Obviously, quite a few people agree with me. So if I am wrong, many others are wrong as well. Obviously this message is meaningful to quite a few people, otherwise not many people would be reading it.

“I guess you think that some how you are going to change the world wishing that some game company will read this…”

Value is, at the core, the whole point of this article.

And if I can change the world for the better, I’m all for it! I’m just one guy. That said, I’m trying to save the game industry, not the world. The world has already spoken…

Game publishers can ask for however much they want. Just don’t expect everyone to pay if they feel like they are not getting their $59.99 worth. People speak with their wallets, and I’m hoping their message was heard: http://www.escapistmagazine.com/news/view/100679-Game-Industry-Suffers-Fourth-Worst-Sales-Decline-Ever

 
 
#51
SuperTroll
May 24th, 2010 at 7:49 am

Don’t be douche. It’s his article. You don’t need to agree with it, just have some respect.

 
 
#52
Salith
May 20th, 2010 at 9:30 am

5500% is 5.5 times, not 55 times, so Red Dead Redemption would sell 20 million by the logic already put out… which is possible… not likely, but possible.

 
 
#53
Kyle
May 19th, 2010 at 10:04 am

I wish it were as simple as, “Lower the prices, then we’ll buy more of your games!”.
I point to the recent humble indie bundle as a case in point.

http://blog.wolfire.com/2010/05/Saving-a-penny—-pirating-the-Humble-Indie-Bundle

You could literally pay whatever you wanted for the entire bundle of games, yet people still pirated it. 25%, according to the article. I bought it; the process is painless as it gets, so you can’t blame inconvenience. I’m sure that you are not one of these people who would pirate just to stick it to the man, yet there are people out there who will.
Best intentions often go awry.
I agree that EA and Ubisoft are going about this the wrong way. But we can’t always blame high prices as everyone’s excuse. There is a real element that will always pirate games, and the publishers are reacting to it in an entirely antagonistic way, to the detriment of the gamer.
The prices are here to stay, unfortunately. The new battlefront should be in digital distribution. We should encourage products like steam that have the best implementation of DRM i’ve seen. Not only that, continually there are sales going on that offer tremendous discounts (i think you can still get portal for free). I find myself flocking to this platform rather than brick and mortar stores because there are always deals to be found, its painless to get set up, and I don’t feel like i’m selling my soul to buy a cd key. As the saying goes, vote with your wallet.

 
 
#54
James Mowery
May 19th, 2010 at 10:07 am

@Kyle

The 25% piracy rate compared to the staggering 80% or so piracy rate estimated is quite an improvement, don’t you think?

Check these articles out: http://www.gamepro.com/article/news/165488/hard-times-pc-game-piracy-in-us-estimated-at-75-80/ and http://www.techdirt.com/articles/20090219/1124433835.shtml

And, of course, these high prices will remain high. It’s likely going to be like that for a long time. Furthermore, I’m sure the prices will stay that high even when we move entirely to a digital distribution platform.

 
 
#55
Kyle
May 19th, 2010 at 10:21 am

Point taken.
But we do have a choice in the matter. Gabe said it himself, lowering prices made him more money. I’m certainly no business expert, but the digital platform allows for an unprecedented reaction time for the publishers. Instantly everyone sees the discount and can order from the comfort of their chair, then play the game after it finishes downloading. I think the dynamics change on this platform, allowing for a much more flexible pricing schema that encourages value. Now valve isn’t the one in charge of the prices. That said, I don’t imagine prices coming down any time soon. Sometimes I wish the older generation would move out so we can step in ;-).

 
 
#56
LeWayne
May 19th, 2010 at 10:06 am

@Robert

you’re missing another point. the PS and PS2 were the market leaders during those times and their games ranged from 10 dollars for Final Fantasy 1 and 2’s remake to 20 dollars for games as simple as castlevania chronicles to 30 and 40 dollars for bigger purchases to 100 dollars for games like Arc the Lad. The competitive pricing of the Playstation back then was the reason why they had the better catalog and the higher attach rate.

Sega Saturn games and the system were priced higher, but those are what ultimately killed the Saturn in the face of the PS’s launch anyway.

@ Ian.

1985-2006 called and told me to tell your publishers to go back and learn what quality means. Here’s a protip: it’s not spending millions of dollars in graphics and making blah single player experiences with no replayability.

Great article, James. However since there’s way too much sense being made here, it’s going to be picked apart by industry mentality until it’s rendered “invalid”. When the reality is investing more money than the initial price of a game to get features that should have been there in the first place is obviously too much.

 
 
#57
sdfffs
May 24th, 2010 at 3:56 am

100 dollars for games like Arc the Lad\

there is so much wrong with this… arc the lad has never cost 100 dollars WHERE DO YOU PEOPLE LIVE THAT YOUR PAYING SO MUCH FOR GAMES?

 
 
#58
so wrong
May 19th, 2010 at 10:15 am

Terrible article. You neglect the reality that games are a business. When you say things like “…I haven’t purchased a single computer or console game in well over four years…” why is anyone going to listen to anything you have to say about game sales? Clearly, you are not interested in purchasing a product, you are interested in purchasing a game service. There are purveyors out there that fill this need — GameTap, for example. I’m certain you’re not unaware that games cost a tremendous amount of money to create. Is it not just that the creators of these games receive a lion’s share of the profits, and not the parasitic “game rental” companies that spring up to feast on the bounty provided by hard working developers? Your article would have been better served to state “Cut out the useless, parasitic middleman — game rentals and used resales — and create a lower priced gaming service to satisfy me” rather than accusing a company of trying to make money, which all companies do.

 
 
#59
James Mowery
May 19th, 2010 at 10:48 am

“…and create a lower priced gaming service to satisfy me.”

Lowering prices would not only satisfy me and many others, but it would satisfy the game publishers themselves with dramatically increased game sales, as noted in the article.

I’m exactly the type of person that the game industry should be concerned about. There are many others like me. After all, the game rental industry is worth several billions of dollars.

 
 
#60
TonyC
May 19th, 2010 at 10:18 am

I’m going to have to disagree with you on one point. This one:

“Obviously, there are gamers who want to purchase your games without paying full price. They wait and buy used games, resulting in a missed opportunity for you to make money.”

The developers already made the money off of those who bought the games new. How else would it be used if it didn’t start off new? I agree with you however, that they would make money twice over if they functioned like a gamestop and resold used copies but that’s another issue.

 
 
#61
James Mowery
May 19th, 2010 at 10:24 am

@LeWayne

Thanks for the comment. I agree about everything you have said. And, of course, the big guys in the industry have already laughed at this article. The thought of lowering pricing and the possibility of lower profits probably makes them pee their pants.

Yet their ignorance is costing them money and engagement. There is so much opportunity yet to be explored, but so many of them don’t get it.

 
 
#62
LeWayne
May 19th, 2010 at 10:34 am

@ SoWrong.

I believe He’s referring to Gamefly, and I’m pretty sure that companies like that buy games in bulk which means publishers and developers are still getting their money. As did other rental services like blockbuster and Hollywood video in their heyday. Game Tap probably does a similar thing with aquiring the licenses to provide games on their service. which means approaching the license holders and having to offer premiums to them for having their games on it’s service.. which sounds kind of like the virtual console, PSN and XBLA. hmm….

Your description paints it as these guys sending kids in to best buy to slip the games into their jackets or torrenting the games for use on their services. You also sound like instead of not purchasing games to put up with an obvious dilemma he should “suck it up and deal” and spend his hard earned money on that instead of more useful things like paying bills and rent.

 
 
#63
Bill Cooper
May 19th, 2010 at 10:39 am

With all due respect, this is an astonishingly wrong-headed load of tripe, made especially hilarious once you get to this part: “Now I haven’t purchased a single computer or console game in well over four years.”

So you’re an outraged consumer … who really isn’t even a consumer at all? Nice.

Let’s touch on a few more points:

“…punishing gamers who legitimately purchase used games” is just as easily spun as “rewarding players who buy new games,” because that’s pretty much what it is. Rewarding people who buy new. And this is a problem, why? If you get your games used, you still get to play them in full, experience what the game has to offer, and get some video game time in. Consumers who purchase new get some extra content for their money. Sounds fine to me.

“The average price for games has gone up over the years” – Actually, video game prices have been remarkably consistent over the years. The current $60 standard for most new consoles games isn’t all that new — it was the price point for many, many games over the years — and adjusted for inflation, games are CHEAPER now than they were 20 years ago. The $50 you spent on a game in 1988 would be $90 today. At $60 in 1988, it’s $108 today. Further, games cycle onto “greatest hits” budget racks faster than ever, often within a year, consistently giving patient consumers pricepoints of $20-40. It’s a trend that shows no sign of slowing.

“It’s no wonder why rentals and used games are so appealing. Hint: it’s your customers telling you something.” — A far, far bigger hint would be the incredible growth of the video game industry during the same four years you bailed out. It’s been one of the fastest growing entertainment industries out there, raking in tens of billions even as other industries suffered. That’s a pretty loud message.

Ahhh, and then the piracy issue. You say, “But did you ever step back for a moment and question why this happens? Maybe it is the price, of all things, that has been a motivating factor.” It’s an oft-repeated cry of people who want to excuse piracy, but it’s time and again proven to be rubbish, such as in this case:

http://arstechnica.com/gaming/news/2010/05/humble-bundle-gives-pirates-what-they-want-gets-ripped-off.ars

People pirate games to get free stuff. End of story. The vast majority of justifications hold no water and are just that: justifications.

Finally, this has already been rightly trashed as the nonsense it is: “So why not charge $30 and entice twice as many gamers to shell out the cash for the game?” Were this the case, lines of budget games would be perennial top sellers, the price cuts on some sports games a console generation back would have toppled EA Sports, and so on. This did not happen. Wonder why?

This is a delicious diatribe by a guy whose contribution to the industry us close to zilch and whose understanding of economics is wanting. It was a nice effort, kudos for it, but it falls woefully short.

 
 
#64
James Mowery
May 19th, 2010 at 10:53 am

I’m sorry, Bill, but you are flat-out wrong.

Would you prefer 25% piracy with reduced pricing versus 80+% piracy without. Which would you rather have? The reduced pricing resulted in potentially 55% more sales that wouldn’t have been otherwise. Can you really argue against that?

You can’t.

 
 
#65
Anonymous #2
May 19th, 2010 at 2:14 pm

@James: Did you even read Bill Cooper’s entire comment? You only addressed the piracy aspect of his argument. Additionally, there have been several posts that poke holes in your rebuttal, especially as it pertains to consoles.

 
 
#66
James Mowery
May 19th, 2010 at 2:38 pm

As far as consoles are concerned, arguing against my idea is just as convincing as arguing for it. However, as I have pointed out before, there is evidence that supports the idea that reduced pricing leads to increased game sales. That, in turn, can result in more opportunities for engagement and monetization.

 
 
#67
Bill Cooper
May 20th, 2010 at 11:00 am

James, I have to wonder if you understand profit margins, revenue, expenses, and so on … because I get the very strong sense that you don’t. If you cut the price of your product in half but are unable to significantly cut the cost of making and distributing the product, and/or you’re unable to double your sales as a result of the price cut, you’ve botched the job by cutting into your profits.

And if you’re not a big developer with a lot of capital behind you, that’s very, very BAD.

If you cut prices on new games in half, a 55% boost in copies sold does not cut it.

In addition, the oft-repeated example of Steam as a pricing model is also a poor one, since new releases on Steam are comparable in price to retail copies. Steam’s deep discounts generally only come when a game has been out for a while — just like steep retail discounts.

I’ll refrain from pointing out that you failed to address any other points in an otherwise lengthy post.

 
 
#68
TheWon
May 19th, 2010 at 10:41 am

Pretty good read I do feel you could have address some really important issues though.
For example the obvious partner ship between some console developers and 3rd party software companies.
For example with the increase in size of hard drives for the HD consoles. Yet the only thing they are used for are saves, DLC, and game installs. You would think these companies could demand from 3rd Parties. Who have a habit of releasing yearly similar software. To make their games patch able or upgrade able. The same way they are on the PC. There is no reason that Capcom should be allowed to release a game one year. Then the next year release the same game with just minor upgrades.

I covered subjects like these in a video series I have. Check it out! There are a lot of gamers who feel like you.
Out From The Side OF My Neck Episode 23: Gamers Union
http://www.youtube.com/watch?v=o4sa9SpBG8I
http://www.youtube.com/watch?v=ohnxv9mP1gY
http://www.youtube.com/watch?v=MW8SjQjJlts

 
 
#69
Gregg Bolinger
May 19th, 2010 at 10:43 am

I think Ama is on the right track. Quality is a larger issue for me, than cost. I’ll gladly pay for a game I deem worthy of my time. Unfortunately, few of those games exist.

I don’t think piracy is as big a problem as the studios think. My opinion, but there are basically 2 reasons that people steal games:

1. “I steal everything” – These people don’t buy games (or music, movies, etc) no matter what. Down with the man! Even if you lowered the cost of your games, they would still steal them.

2. “Spite” – These are the gamers that steal games because of DRM, bad DLC (yes, there is a good way of doing DLC), and just generally being pissed off about a game.

You can fix #2 by fixing the way you sale games. Not by cost, but by stopping the DRM crap, providing good quality DLC, when it makes sense. Creating quality games. And just being a decent company that listens to it’s customers.

You can’t fix #1, so stop trying, and #2 will take care of itself.

 
 
#70
Dave R.
May 19th, 2010 at 11:24 am

If you keep paying up, they’ll keep squeezing. And it will never stop until gamers do stop paying.

There’s no point moaning if you then go and buy the games anyway.

The solution is simple: stop buying games for a year. That’s the only thing that will get a real reaction from publishers.

 
 
#71
James Mowery
May 19th, 2010 at 11:40 am

Haha. Dave… that’s why I have purchased a video game in four years. ;)

 
 
#72
Jay
May 19th, 2010 at 11:59 am

I liked this article, but I think the author and everyone who posted here has lost sight of a big issue.

The real problem with video games today is not the price. It is the consumer. Unlike the 90s, the first decade of 2000 saw many more young people being able to purchase their own consumer goods. For the first time, this past decade had many people between the ages of 12-30 able to buy video games and systems on their own, whereas in the 90s, most of us relied on our parents to buy these things for us. And since such a huge influx of people are now financially responsible for whatever purchases they make, gamers now realize “Holy crap! I do not have money for gaming and my living standards at the same time! Something has to give.”

I remember most video games in the 90s being about $50. Now I pay an extra $10 plus tax. Compared to many consumer products in a 10-year span, that’s not a real big deal. But the difference is back in the day, I asked my mom to buy my games. No harm on me. But now, I got bills to pay, food to buy, work to do, all which put a strain on my wallet, so when I’m considering a $60 luxury item, things aren’t so sparkly anymore. Hence why used games have become so popular, because if I wait a few months, that $60 becomes $30, and now I can have the same experience I was going to have at top dollar.

It’s time as consumers we stop being mute about this situation and work out how to deal with video game companies. Unlike other business models, there is no wider market for video games. If us as gamers don’t want the products, THEY FAIL. Simple as that. Capitalism at it’s finest. Come one people, it’s time to start paying attention to what you’re contributing to.

 
 
#73
James Mowery
May 19th, 2010 at 12:09 pm

That’s an interesting perspective, Jay.

However, you note later in your comment that price actually is the issue: “… if I wait a few months, that $60 becomes $30, and now I can have the same experience I was going to have at top dollar.”

So you would be willing to purchase AAA games more often at the $30 price point instead of $60. And that is part of what this article details. Many people want to buy these games, but the economics have prevented that from happening. It doesn’t make sense to buy a game every month any more for many people. If you buy multiple games a month, it could easily cost over a thousand dollars a year just to enjoy games that might be played for an average of 5 hours. It has to make people wonder where the value is.

I remember back in the ’90s and early ’00s as well, when my parents easily purchased two or three games a month for me. I was very fortunate in that regard. I always had all the game systems and games. Everything was new.

But now, I just couldn’t even begin to imagine buying more than one game a month. That’s why I don’t buy any games. I simply rent them and return them within a weekend or so of playing. It just isn’t worthwhile to me to pay $60 for a game that I’ll play for a few hours and never again.

This is also why I’m a big renter when it comes to movies as well: I have a Netflix account. It’s just a much better value, at least for me (and I’m assuming many others as well).

In the end, price is the issue, along with the economics and politics at play. But I agree with everything you said.

Thanks for the great comment!

 
 
#74
Udi
May 19th, 2010 at 12:40 pm

Here’s some basic math.

80% piracy you say?

Ok say there’s a game that sells 20 units per day, that would mean 80 units gets pirated every day.

80/100 = 80%

Ok now say the developer of this game decides to have a one day only “pay what you want sale” and the sales increase 15 fold to 300 (20 X 15)

Now what happens when 80 people still pirate the game on that day of the sale?

80/300 = 26.6%

and voila, there’s your magically reduced piracy rate when the amount pirated stayed exactly the same.

 
 
#75
James Mowery
May 19th, 2010 at 1:20 pm

Who’s to say that those 80 people would still pirate the game on that day of the sale?

 
 
#76
Udi
May 19th, 2010 at 1:42 pm

just making the point that a reduced piracy % != reduced piracy.

you can reduce piracy % by increasing sale numbers.

 
 
#77
James Mowery
May 19th, 2010 at 1:51 pm

That’s true.

Either way though, increased sales are increased sales, and those are potentially sales that might not have happened, especially as time goes by and newer games are hitting the market. It means that there is vastly more demand at a different price point. Publishers are turning those people away, and that, in my opinion, is lost opportunity and lost revenue.

 
 
#78
Eclipse
May 25th, 2010 at 7:00 pm

This is true, but increased sales are still a good thing (assuming you make a larger profit on those sales at the lower price point, of course.)

The point about piracy rate vs number of pirates is still a valid one though.

 
 
#79
Noel Ang
May 19th, 2010 at 12:47 pm

“[Demise of the gaming industry] is only a matter of time. It happens in every industry, and while the game industry has managed to avoid it, one can’t help but wonder how long that will continue to last.”

I can’t recall a single industry in contemporary times that have ceased to exist. Your edification would be welcome.

Unlike a real rape victim who may be, in their own specific circumstances, unable to stop getting raped, much less complain about it, gamers do have a choice. This is, after all, trade, and if the conditions are not to a man’s liking, he can choose to stop spending his money on a company’s products.

The article confuses cause and effect. The DLC and DRM models are the effects of market pressures (piracy, second-hand resells, etc.), not their cause. Their persistence and continued mutation are the effects of customer tolerance – there is no greater endorsement, intended or otherwise, of these publishers’ practices than handing over your cold, hard cash. When you pay even the harder they screw you, what reasonable message may derive from it? That you liked the service and would pay again for another helping.

So, our figurative rape victim in this discussion is actually, in turns out, a slut.

Who *cares* if the industry burns down. Buildings won’t be toppling down. The craftsmen, the men and women who have the actual ability to create the real value we want, will not cease to exist. They’ll start again, from the beginning if need be. Let it burn. If you have participated in trade that you judge to be unjust, then you have been complicit in perpetuating that evil.

“[The industry] can’t [last]. Not unless things change. Not unless you change.”

An affirmative alternative is for you, the gamer, to change.

 
 
#80
Zachariah Granville
May 19th, 2010 at 1:05 pm

Ironically enough, I stopped playing games b/c of the expense. Xbox live, 50 bucks a year. Repairing RROD’s, couple hundred a year, new games 3 or 4 hundred a year, etc. etc. etc.

 
 
#81
Rob
May 19th, 2010 at 1:14 pm

Batman Begins the movie cost $150 million to make and made Worldwide: $371,853,783

After the first day Call of Duty Modern Warfare 2 made U.S. and the UK $310 million. Also how much did they make with the DLC for 4 levels, two of them being from the last game and only actually making 3 new ones, so almost half the work was already done for them and it cost a third of what you paid for the game.

My question is, did they spend $150 million in creating the game?

A movie ticket cost 10 bucks, a Blu-ray $20 to $30, DVD $20 to $25, Video Game $69.99 on average today.

Now I know the argument here is going to be “did you get 60 hours worth of the movie you bought” Because with games you do get more then 2 hours worth of enjoyment out of it and that’s why I have no problem paying $49 to $59, I don’t even mind paying $69.99 if the game is worth it.

You need to keep in mind that a lot of the games now are online and there is cost in the maintenance so that all gamers can continue to enjoy the online benefits.

what I do mind is when the game has lots of glitches because it was rushed out the door and to try and make the most money before quarter end and then sell DLC that is over priced.

When it comes down to it you got to look at the value of what you are buying, when you buy a movie you could watch it 60 hours worth and have the same experience every time but with a Video game at least you pay more and get a lot more enjoyment and possibly a different experience every time (depending on the game).

My last comment would have to be aimed at EA sports and how every year they charge $69.99 for a new sports game and there is no discount for gamers that buy them every year. And its not like you can sell the last years game because they discount the retail price to $19.99, so what is the point. It would be nice if you could just pay for the upgrades each year as a DLC, they would save money on not having make packaging and discs and would easier on the old pocket book for us.

 
 
#82
Irollneedmmk
May 19th, 2010 at 4:43 pm

I am 18 I have been around from Snes/Turbo Graphix till now…..ALong the way AMAZING GAMES CAME OUT! I …….

EMULATERS screw fancy graphic link to the past wins all

 
 
#83
Mr Anon
May 19th, 2010 at 8:14 pm

Dear Industry/Publishers,
We are currently living in tough economic times, and a lot of us are struggling, unlike the Games Industry which just keeps on getting bigger and greedier.
I have 2 options when I’m skint, OPTION1: buy pre-owned or OPTION2: buy new, at your exorbitant prices, and then stick with paid game for longer than I would normally because I cannot afford any more games.
Take away OPTION1: and I’m off to that place we call the bay, I believe the word “torrent” will ring a bell.

Understand ?

Oh, and what goes on, after I have paid you for the first sale, between me and a pre-owned sales shop is NONE of your damn business. You have had your money from the first sale, and like EVERYTHING in else in life, you are NOT involved in anything involving a 2nd sale, that remains between me and that third party, and get this, its perfectly LEGAL, so shove it.

 
 
#84
Mark
May 19th, 2010 at 10:30 pm

Good article you are right on many accounts. Want to add some psychological aspects with my first point:

1. Many gamers are addicted. Look a the tobacco industry. Most people just cannot quit cold turkey because of years of addiction and thus will make any excuse on why the companies should nickle and dime you.
WHY?
a)The younger you are the more easily manipulated you are. So essentially anyone early 20’s and lower will have a harder time quitting and saying no to companies.
b) Intelligence plays a big part in this. The higher IQ person is more likely to differentiate right from wrong in the business world and outside.

2)Used games offer price competition. Anyone notice game companies don’t compete price wise. It’s cohesion but legal because corporates can do what they want. Used games are essentially price competition and logically new games should have lowered their price to compete.
The last time their was a price competition in the game industry EA bought the NFL license and ended it.Remember NFL2k series was 20 bucks and Madden started dropping its price to 40 and eventually 30 dollars.

3) When you buy a game should you not have a right to resell it? Like a used car. Like a house. Like a ( fill in the blank)

4) Essentially you cannot trade/lend/borrow games from your friends and family.

5) Game companies are not losing money. Essentially the person who buys the game originally already paid for the online service. He sells the game and simply extends the games life. It is not adding any extra strain on the game companies part.

6) Sports games need to stop the roster updates. Clearly Madden buyers are addicted. The game has made very little improvements and is still behind NFL2k5. That’s six years ago.

 
 
#85
Mathew Ballard
May 19th, 2010 at 11:04 pm

I have to say that I don’t really have a problem with some companies charging a fee to play online if you don’t buy a game new. Personally I rarely ever buy a game used anymore because I want my money to go to those who have made the games I enjoy instead of the money going to companies like Gamestop. Now, I’m not saying I never buy used games or rent games. But, when I do so I only do so through Gamefly and they tend to be games that I’m not too sure about to begin with or older games (two or more years old) that have been around.

Now, there are somethings, like withholding content from a final game to release as DLC just to make a few more bucks. But, no one has to purchase the DLC, your not being forced to. If you don’t like it, then don’t buy. Your money speaks much lounder then your words in this case.

 
 
#86
project free tv
May 19th, 2010 at 11:34 pm

I remember when Napster first cam out in 1999 or so; most music pirates said that if there was just some way to download individual tracks (as opposed to having to buy a $15 CD) they’d stop pirating. After companies started selling individual tracks for $1 people said that they pirated because of restrictive DRM. Now most music services offer DRM free music and people still pirate.

People pirate because they want free stuff.

 
 
#87
Andrew
May 20th, 2010 at 2:21 am

As i was rading, nobody mentions that a mario bross game gives more entertain than a cod without all the rage and dicks involved in cods multiplayer experience.

Old Games > New Games bettter graphics that looks so real, and are as boring as real world

 
 
#88
Gabriel
May 20th, 2010 at 8:42 am

Instead of DLC how about we go back to expansion packs. Gamers are willing to pay decent money for a good expansion pack with new game modes , maps challenges and even maybe a short single player. Look at Call of Duty :United Offensive. Call of Duty was very Popular when it came out. The United Offensive expansion pack put it through the roof.

 
 
#89
blahbalh
May 20th, 2010 at 10:42 am

Whine, whine, whine. You talk about Video game Publishers, when you really mean EA. So don’t put all of us into one pile (yes, i’m a game dev).

EA always goes about things the wrong way, but their goal is to get people to pay for new games. Gamespot is KILLING game developers, not publishers. EA and the like are doing quite well. The developers are getting raked over the coals by used game stores.

Personally, I don’t care as I develop MMOs. I am tired, though of all the bitching by people like you. Shut up and play the game or don’t. WE DON’T CARE

 
 
#90
b-ry
May 23rd, 2010 at 6:00 pm

i completly agree with James Mowery. i think you’ve covered it all well. these issues need to be delt with. it’s just a matter of who and when. this needs to be taken care of. good article man, really. i wouldn’t call myself a gamer at all and even i agree:)

 
 
#91
Alexander Lee
May 23rd, 2010 at 10:47 pm

I can count on one hand how many times i have bought a game since they stopped being 30$. I refuse to BUY a game over 30 dollars. I will get them ” used ” or not play them at all. If they were thirty dollars i would love to be part of the gaming community who purchases brand new games. But the price increases are ridiculous. 50-60 dollars for a p.c game? Are you kidding me?

 
 
#92
popup
May 24th, 2010 at 7:29 am

Its pretty simple really, most people have a finite amount of money to spend on leasure activities, as games get more expensive i just buy less of them, and of course that means that when i fancy a bit of variety and have played the games i bought to death i’ll go and download something to play instead.

Im not daft, If i have the money i’ll buy that sparkly new game thats this weeks “ust have” if i dont i go second hand for someting a bit older that i fancied but did t have the money foor new but then if i know that by buying a second hand game and having to pay extra money to make it work it equals the cost of the new game that i could not afford i just wont buy it.

That sounds like a good thing for the publisher as i can then save that money towards my next new game, but its not, MANY gamers factor in the trade in value of a game when they purchase that game, so if your game is worth nothing as a trade in you’ll be able to afford even less new games.

 
 
#93
diane
May 24th, 2010 at 7:16 pm

I haven’t purchased games in years. Why should I, if there are so many flash games, web-browser games, and free online MMORPGs? The industry has to lower the prices, because even when developement is expensive, producing the actual games is not. I think most of us would buy more games if they were cheaper.

 
 
#94
Henry
May 26th, 2010 at 11:24 am

I was a gaming freak once. But the way ever increasing prices of games used to get the money out of my pocket started to bother me. I still find it hard to resist the temptation at times and blow up my money on consoles. I hope the prices slash soon.

 
 
#95
Joel
May 27th, 2010 at 1:41 am

Hi Everyone

I just happened to stumble onto this discussion and it’s about time someone started making a scene about this. I’m an avid gamer, not really online much though just cos of internet speeds in South Africa and douches just kick you from American and European servers cos of the speeds. Anyway that’s another rant entirely. I’m a student here in SA and game prices here range between R400 and R700 ($50 – $90). Now just to put this into perspective i only spend $90 on petrol a month. I struggle to live of R3500 a month(+-$450) Its crazy how they expect support in this time when they charge these kinda prices.

Just wanted to add my two cents. On that note, just being logical here, Rob the only point that this forum became a rant was when you started ranting at James. And James does have a simplified solution that would work if not for the game industry being owned by corporate sharks. I understand they need to make a profit on each game they sell but 800%?!?!?! profit is a little tiny itty witty bit insane don’t you think?

 
 
#96
Wolvenmoon
May 27th, 2010 at 1:38 pm

The price hike is due to a tax Microsoft places on all games sold on their consoles.

Game developers are shooting themselves in the foot. I hope they double game prices, put ferocious, ridiculous, system obliterating hardware frying DRM on their systems, breach privacy laws, and corporately die horrible flaming deaths as they’re pulled into the recesses of a legislative hell by the skeletal hands of class action suite bearing lawyers.

Though congratulations are in order. Not many corporate atrocities result in the formation of a global political party.

 
 
#97
Wolvenmoon
May 27th, 2010 at 1:42 pm

And hopefully they’ll drop this DLC model. I’m holding onto my cash and spending it on learning CGI. So far they’ve lost 930 dollars from me. ( 400 on intuos4 large, 80 on anatomy books and such, pending 450 on adobe CS5 )

I don’t play subscription nor micropayment games and never will. They’re scams.

 
 
#98
Dave
May 30th, 2010 at 1:42 am

I remember when Napster first cam out in 1999 or so; most music pirates said that if there was just some way to download individual tracks (as opposed to having to buy a $15 CD) they’d stop pirating. After companies started selling individual tracks for $1 people said that they pirated because of restrictive DRM. Now most music services offer DRM free music and people still pirate.

People pirate because they want free stuff.

 
 
#99
Mangopork
May 30th, 2010 at 3:49 pm

One thing that needs to be considered also is that these crafty and shrewd practices on behalf of publishers may actually leave the door even MORE wide open for low-priced indie games.

That combined with the fact that indie game tools are cheaper (if not free) and readily available to all, and you are actually looking a potential resurgence of gaming.

If this is all done via digital ditribution platforms like steam, facebook, desura, penny arcade’s greenhouse, etc., then you could bypass the traditional publishers, charge less, and still make just as much if not more per game (depending on the game itself, of course).

I still think it’s a good time to be a gamer. We are seeing a quiet (or not so quiet: See Braid) gaming renaissance in the indie scene and this is only going to continue.

Hopefully – very hopefully – this will either cause publishers to wake up or render them immobilized on behalf of better games being made by passionate indie developers and sold on the cheap.

Viva Revolucion.

 
 
#100
unbound
June 4th, 2010 at 5:05 pm

Good article, but this is what happens when the better businesses start winning and merger their competition out of the market.

We’ll be down to 5 major publishers soon with the Vivendi / Activision merger. Keep in mind that the businesses that win don’t necessarily provide the best value…they are the best at making money. So there really shouldn’t be any surprises that the companies that know how to make money are tugging at your wallets even more. This happens in every industry.

Did you know that ATMs save banks money? They were designed so the banks would have to build fewer branches, and were a rousing success. After awhile, they decided to charge you “convenience” fees for something that saves them money…pretty nice of them, right?

 
 
#101
Blackbeard
June 8th, 2010 at 12:06 pm

Yeah, I’ve probably pirated thousands of dollars worth of games now, entirely because I can’t afford to buy them. Part time work, paying rent and tuition fees for school, I just don’t have the money to pay the ridiculous prices game companies are charging. My most recent turn away was probably assassin’s creed 2, which I happily went to my local game retailer to buy, to find out it was $70 before tax. (Living in Canada). That’s just obscene. So, I went and downloaded it illegally. I had full intention to pay for it, but, come on, $70? Really?

 
 
#102
roo
June 24th, 2010 at 6:08 am

until you stop paying high prices, there will continue to be high prices. complaining and ranting will not help. nobody cares if you are happy with your purchase, only that you have purchased.

 
 
#103
CyphirX
July 19th, 2010 at 12:27 am

So there’s a used game out there. if a person buys a game new, and plays it, ok. then they decide to sell it back to the store. someone else buys it, plays it. how does the game company lose money if someone else plays that specific game/disc? It’s already been paid for at the new price, there’s no difference between a person then playing multiplayer on your servers at that point then if the original owner had continued to play it. The effects of this are: the retailer and seller make some money (and a store worker actually will get a paycheck), your game is then played by a wider, less financially-endowed group. Yes, people may wait to buy a used copy of your game, so there may be less new copies sold and you may lose some profit (which in alot of cases is negligible.) but you can’t say that those gamers would have played your game if it was only available for the ridiculous prices you sell them for anyways. If your game is good enough and people enjoy it and can expect a quality game (and not having to wait for DLC to come out to make it “whole”), then they will support the company and get it when it comes out because they want you to continue to make good games. But obviously you do not understand this. Which is prolly why when you see sales numbers go down in the future, you’ll look puzzled. Used gaming doesn’t hurt the market, it helps it.

just a thought

 
 
#104
Supersane101
July 19th, 2010 at 1:16 am

It’s a damn good thing that Nintendo doesn’t have to worry about all this useless shit. +1 Classic Japanese

 

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