EA Slashing Current-Gen Pricetags

kukyfrope writes "In order to help push current-gen sales, EA is slashing prices on some of its upcoming titles. For instance, two of EA's most anticipated titles, The Godfather (March 14) and Black (February 28), will retail for $39.95." From the article: "It'll be interesting to see how the market reacts to these price cuts. We would guess that several other publishers could soon follow EA's lead and drop the prices on their upcoming current-gen software also. It could be just the strategy the industry needs to boost overall sales. $39.95 looks like a bargain when it's sitting on the shelf next to a next-generation game priced at $59.95."

EA pricing?

[Quasar1999]

I'm an avid Need for Speed fan... every recent release comes out at $70 (Canadian) and then a week later it's down to $60, then a month later it's $50... then about 2 months after that it's in the bargain bin for $20.

If they started pricing games more reasonably, based on length, quality, and quantity of game play, then maybe they'd make money, and a much better return on investment... but instead, I just sit around waiting for a month before buying the game.

Then again, if you can sell a crap game for 4 times as much as the reasonable market value, why not!?

Re:Good stuff.

[__aaclcg7560]

Better games equal better sales?

Re:Good stuff.

[fishybell]

They don't want more sales, they want more profit.

Since they are trying to maximize profit, they will (correctly) charge as much as the market is willing to bear. Unless they difference in the number of sales more than offsets the loss in profit-per-unit, other publishers won't follow suit. Given that they are experimenting with lower prices it seems to be that they think they can indeed get a larger return from more sales.

However, since not all games are created equal, it seems silly to try to sell them all at the same price. Each product will have a specific price point that maximizes its profit. Perhaps this is the conclusion they are coming too.

Re:Good stuff.

[Anonymous Coward]

Since they are trying to maximize profit, they will (correctly) charge as much as the market is willing to bear.

Not quite. The demand curve determines how many units you will sell at a given price. The market might "bear" $100 a unit, but you'll only sell 10, but at $60 you'll sell 100,000. Drop it to $40 and you might sell 300,000. What you want to find is the point at which profits are maximized, considering that you don't know what the competition will do (If they drop to $40 too you'll lose canibalized sales, so only sell 125,000 units). Or the public might decide a new $40 game must be crappy, and avoid it. There's a lot of voodoo that goes into setting prices, and having a "standard price" can be a reassuring thing.

39.95

[mmalove]

"In order to help push current-gen sales, EA is slashing prices on some of its upcoming titles. For instance, two of EA's most anticipated titles, The Godfather (March 14) and Black (February 28), will retail for $39.95."

That's what we call spin. What they really wanted to say is:
"Having reviewed testers' opinion on our upcoming games, we realise they stand no chance of being successful. Subsequently we will attempt to sell off as many copies at $40 as possible before the public wisens up to this."

Take Hacker:Elite - released a couple years back at 30 dollars to start. Box looked great, concept sounded great, game itself was short and ultimately pretty dull. Fortunately these days anyone with google, 4th grade reading comprehension, and enough patience to wait a day, can tell if a game sucks or not without blowing 30-50 dollars on it.

Re:Its only a bargain...

[wedgewu]

Actually, I've played the demo for Black (it's available at stores for free), and it's a lot of fun. It sets out to do what it wants to do, and it does it well, from what I've seen. Just destroy lots of stuff with badass guns. If that's not your cup of tea, then that's ok, but the game itself is actually pretty quality from what I've played of the demos. I would buy it for $50, but $40 is just icing on the cake. :) Criterion makes Black, and they usually churn out some fun games...