Gamer on a Budget: Upcoming Price Breaks?
Remember back in the day when a fresh new game for the high end console or your PC was a cool $49.99? With the next generation of consoles came the next generation of price bumps with most games for the 360 and PS3 starting out at $59.99, in spite of the quality of the game. Only the PC and Wii gamers survived the $10 price hike. Well, according to analyst Todd Greenwald from Signal Hill, the $60 price point may be taking a dip because of our rough economy.
While some may be pretty geeked about it (I think it’s great), Greenwald suggests that this actually could hurt the industry overall as the margins become smaller and smaller for publishers and developers. It causes me to wonder just how the publishers were doing fine when they only ganked $50 from my pocket yesteryear.
I’m no financial analyst as I’ve confessed before, but it doesn’t seem to me that every $60 video game is deserving of $60. Take, for instance, the majority of recycled sports games year in and year out. Is there as much innovation that was put in to the latest edition of Madden that makes it worth the same amount of green as a completely new IP like Dead Space? Back in the PC heyday, we had expansion packs that would typically cost $20-$30 when they came out. So for $70-$80 we’d get the original game plus another half of a video game. Nowadays, we can only get a video game plus a few maps or new songs that we download for that same price. Sequels and DLC aside, what about the sheer quality of video games? I know that developers don’t want to degrade their game based on quality, and it could certainly deter gamers from picking up a game that costs less because it isn’t as high of quality. However, if there is a pricing scale that is based on features alone (no multiplayer? -$10) and really takes an honest look at the quality of the game and money invested in it, maybe a sliding scale could help developers maintain a higher margin while still giving our bank accounts a little more to hold than dust.
I completely understand that this is a market economy; I took the basic econ course in college. We’ve driven the demand up for video games, so the price can go up. We’ve continued to pay the higher premium for better games, so companies have been more than happy to charge it. However, the “recession proof” games industry has shown over the last couple of weeks that it isn’t exactly recession proof. Game studios and tech companies have been laying off folks by the thousands, and that’s if they are even big enough to stay open. Several companies have reported losses larger than their worth, and that means that the game is over for them. By lowering the price of games, companies are sticking their necks out, with the hopes that the better bargain will attract more gamers on tighter budgets without cutting profits too much to fold. They are in an extremely difficult situation of keeping stockholders happy (which I can’t imagine has been a common emotion for them lately), games attractive and affordable and still come out ahead financially – a situation I do not envy them of being in!
What do you think? Will this $10 drop in the cost for the consumer help or hurt the games industry? Will you be more willing to buy a game at $50 as opposed to $60? Leave it in the comments!
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