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The Almighty Buck Games

Why Games Cost $60 536

Posted by Soulskill
from the get-your-fingers-out-of-my-wallet dept.
eldavojohn writes "Crispy Gamer is running a very interesting article on why games cost $60. Many games start out at this retail price — but why? Did the makers of The Beatles Rock Band game just happen upon $59.99, as did the makers of Batman Arkham Asylum? After all, those two titles surely took different amounts of man hours to develop, and result in different averages of entertainment time enjoyed by the consumer. They interview a director at Electronic Entertainment Design and Research, who breaks down the pie as $12 to retailer, $5 to discounts/returns/retail marketing, $10 toward manufacturing costs and shipping. That leaves $30 to $35 in the hands of the publishers. Though lengthy, the article looks at three forces of economics on why game publishers continuously end up in lockstep for pricing: sensible greed, consumer stupidity or evil conspiracy. When asked about the next step up to $70 or $80, Hal Halpin (president and founder of the Entertainment Consumers Association) says, 'I'm not sure that we'll see a standard $70 price point at all. To my mind, emerging technologies, subscriptions and episodic and downloadable content should all enable price drops — increasing accessibility to a much wider audience.'"
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Why Games Cost $60

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  • by skeletor935 (790212) on Friday September 25, 2009 @03:20PM (#29542735) Journal
    The thing I hate most is that for xbox360 (sure it's the same for PS3 but I don't own one so I don't know) every game is $60. Some games definitely deserve it like the huge RPG games with fantastic stories and voice acting and emersive worlds, the great multiplayer FPS games, and so on. Then there's the other games, which probably spent a quarter as much time in development than the much better games, and all of a sudden the developer is like "hurr hurr it's in high def and on the 360 it's worth $60" Games based off movies come to mind first-- usually terrible mock ups hashed together for insta-profit from the movie's success. Some cartoon graphic puzzle games next. And some blatantly terrible games.
  • by Haxamanish (1564673) on Friday September 25, 2009 @03:22PM (#29542757)
    It is more fun to create a game than to play them, and a lot more fun than wincing about how much the commercial games cost...

    Some place to start: Python games community [pygame.org]
  • by lobiusmoop (305328) on Friday September 25, 2009 @03:22PM (#29542761) Homepage

    "That leaves $30 to $35 in the hands of the publishers."

    So why can't we just download games for about half the street price?

  • Re:Which is why (Score:3, Interesting)

    by Saint Stephen (19450) on Friday September 25, 2009 @03:25PM (#29542797) Homepage Journal

    I like Steam because I feel too ridiculous buying a game in a Best Buy in my late 30s :-) Really, Steam is like a brown paper wrapper for Half-Life and Crysis :-)

  • In Game Ads. (Score:2, Interesting)

    by jameskojiro (705701) on Friday September 25, 2009 @03:36PM (#29542925) Journal

    If every instance of an ad in a game would cut 25 cents from the consumer cost of the game, I would say got for it!

    It would be nice to see if Sargent Johnson drinks Coke or Pepsi and if Gordon Freeman likes McDonalds or Wendy's.

  • by SensitiveMale (155605) on Friday September 25, 2009 @03:40PM (#29542979)

    "You pay atleast $15+ to go the movies, "

    I don't. Matinee prices for me or I wait for the DVD.

    I won't pay $70 for a game either. I got burned by immediately paying $50 for the unplayable Splinter Cell Double Agent PC game and I swore off paying those prices. Saved me another $50 when Wolfenstein turned out to be sucky as well but for different reasons.

    On the other hand, I paid $20 for Killing Floor and I've put hundreds of hours into that game unfortunately. I'll get Left4Dead when it hits $20 as well.

    You suckers keep paying $50 and $60 for games and the prices will only go higher.

  • by Triela (773061) on Friday September 25, 2009 @03:40PM (#29542983)

    I think $59.99 may be a cap price for a while.

    The left-digit effect: http://www.sciencedaily.com/releases/2009/02/090223221526.htm [sciencedaily.com]

    Although arbitrary, I'd say it's common for consumers to think of "round" price points like $50 and $100 when it comes to entertainment (games, a night at the movies, dinner out, etc). The left-digit effect would make $59.99 the highest price to still "feel" like it belongs to $50, whereas the left-digit change of $60.00 would remind consumers they're "approaching" what they might consider an off-putting number.

  • Always been this way (Score:4, Interesting)

    by D3 (31029) <daviddhenningNO@SPAMgmail.com> on Friday September 25, 2009 @03:41PM (#29542993) Journal
    Relative to the 1970's and 80's the prices now are a real bargain. I recall Pac-Man for the Atari 2600 being something like $50 at first.
  • Price Inflexibility (Score:5, Interesting)

    by EXTomar (78739) on Friday September 25, 2009 @03:42PM (#29543033)

    What is killing console games is the inflexibility in pricing structures. Although AAA release game is okay at $60, a game like "Darkest of Days" is not. But since they are stuck in the same distribution channels they are forced into this pricing structure that doesn't make sense for the game.

    This is why online stores like Steam have taken off. "Plants vs Zombies" is a hell of a lot of fun and would have died at the fixed $60 price. A developer may notice their game sales are slowing down so they do a price cut weekend which is impossible to do with the classic distribution chain. Even in the citation, half of the cost instead of being consumed in the distribution chain just putting disks on shelves can be put elsewhere. I don't have much illusions the big boys with the big games will pass the savings on to us but having the flexibility is at least a start.

  • by WeatherServo9 (1393327) on Friday September 25, 2009 @03:44PM (#29543053)

    Why do games cost $60? Because that is what the market will pay. Does this even need to be discussed?

    I would think yes; yeah, we all know basic economics, but from someone not working in the industry how much do we know about how this price point was reached? Was this found by trial and error? Market research? Both/other? To what extent have there been deviations and what were the results? To what extent do Nintendo/Sony/MS play a role with "suggestions" about pricing? How does price set expectations about quality? What about the impact of historical prices on the perception of current prices? And whatever else I forgot...There's probably a lot of detail that can be explored about the topic that goes beyond just saying "that's what the market will pay". The article isn't great though it mentions a few points but could have been more detailed and researched.

  • by geekoid (135745) <dadinportlandNO@SPAMyahoo.com> on Friday September 25, 2009 @03:53PM (#29543173) Homepage Journal

    "You pay atleast $15+ to go the movies"

    I pay 8-9 dollars and that is in a new cinema.

    Yes, I will spend more it it's a night out, but not more on cinema ticket.

    I don't go to bars. Boring places full of boring people most of whom are vapid.
    At least that was my expedience when I was a bartender, many decades ago.

    Of course you are basing the starting point for your argument on a false dichotomy. That video games are camparable to a night out.

    You should be comparing video game price against developments and other prices in the same field.

  • by dkleinsc (563838) on Friday September 25, 2009 @04:28PM (#29543677) Homepage

    Actually, what the publishers typically do in order to maximize revenue:
    Release day price: $60
    6 months after release: $55
    1 year after release: $45
    2 years after release: $30
    3 years after release: $15
    4 years after release: $5

    That way, they get the early adopters paying $60, and also get the people they just priced out of the market with their 3-4 year old titles. That's because the timing allows market segmentation, which allows them to capture a greater portion of the consumer surplus.

  • Anchoring (Score:3, Interesting)

    by alphabetsoup (953829) on Friday September 25, 2009 @04:44PM (#29543847)

    We all know the supply and demand thing, but the question the author asks is, games don't inherently have a value, so how does the market determine its price to be $60 ? That is, why isn't the market clearing price not $30 or $90 ?

    In addition to the points the author mentions, another explanation is in the phenomenon of anchoring. [futurelab.net] Humans inherently do not know the value of any good, so the first price they see for a product stays in their mind and they compare all prices for that product off that anchor. We have grown used to seeing $60 as price for games - it has become an anchor - so all new games are priced at that.

    A brilliant example of anchoring is given in the book "Predictably Irrational" by Dan Ariely. He gives an example of Tahitian black pearls. When they were discovered all pearls used to be white, so black pearls had no market and no value. But a very clever marketing campaign was launched to *anchor* the black pearls with very expensive jewellery, and hence there value became very high.

    Economics assumes that people are rational. However, people are often irrational. There is a subject called behavioural economics which studies irrational behaviour of people and the limits of normal economics.

  • by blackraven14250 (902843) * on Friday September 25, 2009 @04:52PM (#29543947)
    Yeah, but the publishers are the problem. You think they're just going to let any company kick them out of the loop?
  • by COMON$ (806135) on Friday September 25, 2009 @04:54PM (#29543961) Journal
    Exactly, I will rent many games because the rental times now are so friggin long that I can get my enjoyment out of them in a week or two.

    However, there are certain games where I have more than gotten my money out of them, namely, Zelda Ocrina of time(still have no clue why I am compelled to play this game start to finish every year or 2), 007 Goldeneye, Mariokart 64 and wii, Starcraft, Warcraft III and baulders gate II (even though only played through once, the hours discussing, playing and thinking alone have put pennies on the dollar for enjoyment.)

  • by demonbug (309515) on Friday September 25, 2009 @05:01PM (#29544043) Journal

    I agree - I refuse to pay $60 for a game, so I don't. For my PS3 I've bought all of my games used (see, game publishers? Instead of getting a reasonable amount from me, say $40 - $45, you get nothing!), or waited for the price to come down.

    That said, when Gran Turismo finally comes out I'll pay full price (although I have the nasty feeling they are going to jack up the price on it - hell, I stopped by a GameStop the other day and they were charging $35 or $40 for GT5: Prologue). There is an occassional game I'm willing to pay that price for, but I would consider it a very special, once-per-system kind of price for a game.

    Fortunately PC games haven't quite gotten to the same price point (yet).

  • by commodore64_love (1445365) on Friday September 25, 2009 @06:41PM (#29544919) Journal

    Most games will drop to $20 in 6 months time (usually after Christmas). Even the greatest hits eventually drop to that pricepoint, so I wait until that happens. One of the best games I ever got was Space Channel 5, parts 1 and 2 which for some reason Sega released at only $10 per game. Nice bargain.

    Don't pay $60 for your games. Don't even pay $40. That's too much.

  • by Sancho (17056) on Friday September 25, 2009 @06:49PM (#29544987) Homepage

    For multiplayer games, time can be a dealbreaker. When it came out, Little Big Planet was quite successful. Lots of people bought and played it. All of my friends did, that's for sure.

    Now that it's cheaper, I was considering getting it. However, since my friends have all finished with it, a large part of the enjoyment will be gone. Even if I get someone to help me through the puzzles that require a second player, they'll probably just be directing me through them.

  • Re:Price Drops (Score:2, Interesting)

    by shirotakaaki (1613791) on Friday September 25, 2009 @07:24PM (#29545213)
    I also remember getting a check for $5 from a class action lawsuit brought against Nintendo for price fixing [about.com] (third paragraph).

    That story took some real digging btw. For a minute I thought I had dreamed it up.

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