Do Video Games Cost Too Much? 763
Valve's Gabe Newell gave the keynote address at this year's Design, Innovate, Communicate, Entertain (DICE) Summit about the cost of games, the effect of piracy, and how to reach new players. Valve undertook an experiment recently to test how price affected the sales of their popular survival-horror FPS, Left 4 Dead. They Reduced the price by 50% on Steam, which "resulted in a 3000% increase in sales of the game, posting overall sales that beat the title's original launch performance." They also tested various other price drops over the holidays, seeing spikes in sales that corresponded well to the size of the discount. This will undoubtedly add to the speculation that game prices have risen too high for the current economic climate. G4TV ran a live blog of Newell's presentation, providing a few more details.
Yes they are... (Score:4, Interesting)
Considering that a $200 million "film" [wikipedia.org] can be obtained in DVD for USD$20 at most, I am sure that there is no way a Wii game should cost more than that... (currently 50 euro!)
Impulse power! (Score:4, Interesting)
My psychological maximum for impulse buys for games would be about 20$. Keep games around that and I would have a hell of a lot more.
Well, that and wine compatibility but that is a whole 'nother story :)
Hiopcrits? (Score:4, Interesting)
Elasticity of Demmand (Score:5, Interesting)
I did this in Economics long ago. Have a look at http://en.wikipedia.org/wiki/Income_elasticity_of_demand [wikipedia.org].
I think, it means that when stuff costs less more (or less) people buy it differently. It works differently for different stuff. Fuel, for instance probably is not very elastic because it is not a discretionary purchase - you have to get it. I think some really expensive stuff might actually sell more because it is expensive - caviar anyone?
A game is a highly discretionary purchase and so it will be very elastic. Proper capitalism should mean that you try and maximise your profit by lowering the price and increasing sales. Obviously, you can only cut the price so far because you need to make some profit per unit but the theory is sound and fairly obvious to me.
The idiots in charge in the industry seem to see the whole thing differently. Obviously MBA/parasite economics is not the same as real economics.
Re:Yes (Score:5, Interesting)
I wait until the games I want are on the bargian shelves then buy them (or cheap on Steam). Ok, this usually means I'm behind other gamers, but new to me is good enough.
Nor am I starved for quality games, less so perhaps, because by the time I get round to buying, the shit games have been identified, and the gems lauded.
Diablo 3 may cause me to break this trend, at least for that one game, but everything else is bought cheap or not touched.
It's based on the game (Score:4, Interesting)
I bought L4D this past weekend because it was a steal. Great game (all my friends have been raving about it), and I thought I would like it (it reminded me of counters strike a little bit). Would I buy Mirror's Edge for $25? Probably not. Crysis? Maybe once it hit $15-20, but that'll be much faster than starting at $50
Re:Yes (Score:3, Interesting)
I very nearly bought spore. I was about to put some cold hard cash down for the collectors edition as after all the videos I'd seen of it over the years, I was sure it was going to be a bit.
One torrent later, however, I spent my money on something more worthwhile.
Re:Used to cost way more (Score:3, Interesting)
This would have been fine if I hadn't already guessed this would happen as soon as I was asked to go to Neptune's Bounty. I was so racked off with the predictability I closed the game and haven't touched it since. Does it get better after this or something?
Question of perspective (Score:3, Interesting)
If you ask the gamers: Yes, way too much! I better pirate it.
If you ask the studios: How much can we squeeze the most out of the costumer? Can we put into legislation, that games cost 100$ and every one has to buy one at least once a month? Can we also put an additional tax on everyone, because everyone is pirating anyway?
If you ask some folks how don't feel gaming is of mush value, and do it only as passion: They cost enough to keep me away from buying them. And cool, I have a lot of time I can use for something useful.
Because every game is a monopolistic product by it's definition, you really can't compare it like for instance cheese. It's also not utterly required for survival. At this point it is only a question on priority. Probably the software houses can increase this priority (demand) of third group costumers and increase the legal purchase of the first group by producing better quality games and/or lowering the price.
Re:Used to cost way more (Score:3, Interesting)
True but the actual game was often a one man job, maybe 3 tops (coder, music, graphics) and writte in 3-6 months. These days a typical game has a full blown team for 6-18 months with that team being anything from 6 to 30+ people.
Another aspect is that a game now can have patches released. A game in ROM pretty much stayed that way and very, very few were released as 'fixed' ROMs if anything was found. OTOH, smaller simpler games tended to have less bugs anyway.
Before the Economy went bad... (Score:2, Interesting)
It depends. (Score:5, Interesting)
I bought Dawn of War 2 yesterday for £24.99 which personally I don't mind paying for a game.
But then I got home and tried to install it and it requires you install Steam and Games for Windows Live and activate the game via Steam. I tried to activate it and was told I can't because it's not for sale in my country- presumably because although some shops are selling it THQ decided the actual release date was today.
So yeah, that changed my mind, £24.99 is fine for a game I can play when I want and whatever system I want but it's far too overpriced for a game I can only play when they decide I'm allowed to play it whilst also having to give away a bunch of personal details to Valve for Steam and Microsoft for Windows Live.
The box at least said an internet connection and registration was required to play but it still said nothing about having to give away details to register to Valve AND Microsoft and it certainly said nothing about them being able to choose when I can and can't play the game.
It's been said here many a time that pirates provide a copy of a game cheaper (free) and that you can play without restriction when you want and where you want. If companies want to increase sales then perhaps they need to accept that they have to beat pirates on at least one of these levels, by either matching them on price (not gonna happen) or by beating them on product quality. Whilst they continue to do neither they wont get anywhere.
As for me and DoW2? I file a complaint with UK trading standards and will be returning the game tommorrow and they can damn well take it back even if it is opened because as far as I'm concerned if I don't have the guarantee of being able to play it when I want and have to hand over personal details to two third party companies to be able to play then it's faulty or simply misadvertised. Just as I got burnt with Spore's DRM I've now been burnt with Dawn of War II's. You see when I was young I used to pirate games because I couldn't afford to buy them, now I make plenty enough to buy these games I do so, just as I *gasp* bought a copy of Windows for my most recently built PC. I also bought music from iTunes only to find the only music on my iPod that would play on the game Lips on the 360 for my girlfriend was downloaded MP3s and none of my legally purchased music would work. Some may think it's not a big deal having to wait a day to activate but my concern is that they can revoke my access just as easily as they've prevented my access to a game I've legitimately bought.
What they need is a change of attitude and price is only part of that, I wont buy brand new XBox 360 games at £39.99 but at around £29.99 I don't mind because at least the restrictions are pretty obvious when you buy the game and console. It's not ideal that there restrictions exist but it's light years ahead of the unadvertised 5 install limit with Spore on release and the "Valve gets to choose when you can and can't play" with Dawn of War 2. So whilst I'll buy 360 games, I wont buy music, I wont buy PC games, not even if they were £9.99 anymore it's not just worth the hassle.
So yeah, even Valve with their "Hey look at us guys! we think DRM is silly, we love piracy and think it helps! hell we even do great discounts sometimes!" are still the scum of the Earth and as bad as EA when it comes to draconian DRM in that they prevented me playing a game made by the company THQ and bought from the company GAME and could just as well prevent me again any time they wish.
Re:Impulse power! (Score:4, Interesting)
I've bought several games that were great in theory but that I just couldn't enjoy if you paid me. I recently went through about 20 demos and found that of all of them, I only really liked one. These were 20 games that I would have otherwise just bought and hoped for the best, only be to be disappointed in the end, and quite a bit poorer considering that new xbox games are $60 each. To make matters worse, the actual games does not always match the demo. Conker Live & Reloaded was great in the demo. I couldn't wait for it to finally come out so I could play the whole thing. I picked it up on release day and raced home. Popped it in and immediately noticed that the game play was quite a bit different than what I had played on the demo disc from some magazine.
It's one thing to buy a game and end up not liking it. It's quite another to play a demo of the game only to buy the full game and find out that the game company decided to make some major changes to how the game was played. Of course I couldn't return the game so I was out $$$.
Re:The only ones at fault are Sony & Microsof (Score:4, Interesting)
This is an excellent point and one which I think too many people overlook.
It's certainly true that many games cost a whole hell of a lot of money to produce, but the fee that the console makers charge is astronomical for exactly the reason you give.
The only exception is Nintendo since they do not take a loss. So why are their games not substantially cheaper? Simple: they don't have to be. As long as they charge developers less and Wii games cost less than 360/PS3 games, customers will recognize the less expensive choice.
Personally, I'd be extremely happy if PC game prices were uncoupled from the console prices. There are no licensing fees since there is no central authority. I'm not sure if the "Games for Windows" logo/certification costs anything. Some publishers might want it because it makes their game look more official, but on the other hand Microsoft needs that logo on more boxes to make Windows seem more attractive. At any rate, it's not a significant portion of the cost.
Re:remarkably clueful (Score:3, Interesting)
Actually, you can log into Steam on any machine you please and play any of your games.
This is true. All of your Steam games can be downloaded to as many PCs as you like... just install Steam. If you are using a friend's PC and they've already Steam installed and own the same games, you can log in as yourself and play them with no waiting. If you are installing Steam on a new PC, you can even copy the game data from another PC if you don't want to wait for the download. (I do wish they'd make this a bit clearer/easier though... It's a FEATURE!)
DRM only kicks in if you try to login as yourself on more than one machine at a time. You can't.
This is a pretty good compromise. I now prefer to purchase my games on Steam if they are available there. It's highly convenient. I've even re-purchased some games that I already own on Steam (9.99 for UT3) just for the convenience factor.
Re:Yes (Score:3, Interesting)
Yea, friend, you speak the truth. Diablo 3 will be the first game I will seriously consider buying since WoW.
Re:Yes (Score:3, Interesting)
I know exactly what you mean. I recently bought a PSP which it ain't seeing many new games lately, but it's got a big back catalog of some excellent games I can get on the sub £8 price tag. There's one exception, I've preordered new "Resistance: Retribution" for next month, but other than that, with the existing back catalog, I'll have at least a couple of years of inexpensive gaming.
Re:Elasticity of Demmand (Score:5, Interesting)
I've often wondered if they had a clue about economics. But they probably do. It's not like the developers are doing the pricing, it's the MBA at the top that's doing that. And if he doesn't get economics... Well, the company has pretty major problems.
So then the answer comes down to: They already know how to set pricing, and they've already done it. They need to cut costs if they want to make the product any cheaper, and cutting costs would make the product less 'cool' in the eyes of the consumer.
Cutting costs in software means 1 or more of the following:
Fewer flashy effects.
Shorter game.
Less polished gameplay.
Less testing. (And therefore more bugs.)
Less media hype.
There are probably more ways yet, but they all (except the last) boil down to 1 thing: The game won't be as good. The last one means they'll sell less copies and has probably already been balanced anyhow.
So at the same time gamers are yelling 'too many bugs', 'not long enough', etc, they are also yelling 'too expensive'.
The company has to balance all that out.
And BTW, casual games are a response to this as well. Some companies noticed that games want to buy cheap (sub-$20) games and have fun and they were willing to have less in the game to do it.
Anyone try buying Wii Fit after its release date? (Score:2, Interesting)
Own it dont rent it (Score:5, Interesting)
Well, after you pay your $60, you can play indefinitely. If you ever stop paying $180 a year, you can't play World of Warcraft anymore, even if you've already paid $40 or $60 for the boxed software AND poured hundreds or thousands of dollars into monthly fees.
Many games are good for way more than a month as well, especially if you spend a healthy amount of time on games instead of making them your life. Games like Fallout 1 & 2 (even 3 to some extent), Baldur's Gate 1 & 2, GTA 3 & 4, the Total War series, and so on, have each individually entertained me for many months. And that's not even getting into multiplayer games like Team Fortress 2, Company of Heroes, or Civilization 4, games which you can play for as long and as often as you like, without feeling bored or that you've already "beat it." It's like owning a chessboard, or a deck of cards for poker. Chess and poker never get boring.
Would you rather own 3 new games for the rest of your life, or play World of Warcraft for a year?
Choose wisely.
Re:Yes (Score:4, Interesting)
Buying games at launch (or near to it) increases the chance a sequel will be made. It is voting with my dollars for what I want the gaming industry to focus on.
Also, I have the bad habit of actually following gaming news, so by the time a game comes out that I want to play I have already been reading about it for months.
Of Course games cost too much. (Score:3, Interesting)
I remember when $44.95 was really expensive for a game.
Now, console games cost $60.
I just wonder, why would the same game cost $10 more on consoles than PC? probably because PC gamers won't pay $60 for a regular edition.
That said, Steam really is great for me. They have sales all the time. When they lower the prices, people buy.
I prefer digital distribution now. Going to the store is bothersome. Having a box and DVD to worry about is too much hassle.
Re:The only ones at fault are Sony & Microsof (Score:3, Interesting)
If this "console coupling" a USA thing?
In the UK the average price difference between console and PC versions is about £10-£15.
Re:The only ones at fault are Sony & Microsof (Score:3, Interesting)
Hmmm... I guess I wouldn't say it's a hard and fast rule of pricing. But in my experience, the price of so called "triple A" titles varies little between PC and consoles. Still, I suppose it could just be that my sample is not indicative of the situation as a whole.
On a slightly different note, I am more certain about the parity of downloadable games versus boxed games. They really should be much cheaper, in my opinion. For example, I want to buy Mirror's Edge. The retail PC box is about US$50. The price on Steam is US$50. That's just wrong.
Re:Elasticity of Demmand (Score:4, Interesting)
Shorter game.
You can make a shorter game with more playability if you release a good set of tools for expanding it. Think about the original Quake. I don't think I ever did more than the first of the four parts in single player (and was pretty bored by the end of it), and that was in the shareware release. At one point my quake directory was around 500MB, while the original game was only 50MB. All of the rest was provided by third-party mods. We played Team Fortress, QTank, Quake Rally, Air Quake, and a load of other mods regularly at LAN parties. Of the total time I spent playing Quake, at least 90% was spent playing various mods.
If you want to cut costs, look at the modding scene for a similar game and send the people who make the best ones complimentary pre-release copies of your game. Give them a few months to play with it and see what they come up with before the official launch, and you'll probably end up with more third-party content available than there is in the original game.
Re:Yes (Score:3, Interesting)
Hollywood learned the same lesson long ago (Score:4, Interesting)
When VCRs first came out, buying a movie on videotape cost what? $50? $60? It took Hollywood years to learn that they made a lot more money selling a very large number of movies at $20 apiece than they made selling a small number of movies at $50 each. One has to wonder why it's taking the game industry so long to learn the same lesson.
Re:Impulse power! (Score:3, Interesting)
Take this with a grain of salt (possibly lithium salt), but I have found the following technique to work for returning the occasional horrible game (Spore? anyone?):
Go to the store and tell them that you had "problems with the game" and would like to exchange it for an new copy. In most cases, they will give you an unopened copy which you can then return for a credit. If you buy from a chain that there are multiple of in your area this works a little bit better. (Get the new copy at Target A, return it at Target B)
As I understand it, the system is set up so that stores can return what they call "defective copies" for almost nothing. This allows the store to not lose money and for you to return the game.
Re:Anyone try buying Wii Fit after its release dat (Score:3, Interesting)
Of course, for a Call of Duty, or whatever big budgeted game where the online multiplayer part is not important, it's not an urgent buy. Yes, online multiplayer games are an issue, because after the launch, you cannot easily get people to play with you in most of these.
Bingo. Its the Price, not the Piracy! (Score:4, Interesting)
ALL of these developers could easily sell more if they lowered their prices.
We've been saying it for years and finally someone has the balls to try it.
The Result: PROFIT.
Will anyone learn from this? No.
Re:Hiopcrits? (Score:4, Interesting)
Yeah, sorry, typed it wrong. It's 1 dollar = 3.52 pesos.
113.35 USD isn't insanely high when your salary is in dollars.
When your sallary is in pesos, 113.35 dollars is a fortune.
Re:yeah, the quid-pro-quo makes it more reasonable (Score:3, Interesting)
While I agree that Steam is pretty good as a community of gamers... It is still DRM.
What if all the game companies decided to make their own "steam" like DRM networks? Would we have to run 50 of them on our pcs? 50 gaming IM programs etc...
Steam's doing well because Steam has become a standard delivery for other companies games as well but how long will that last when EA gets their greed on :P
ALSO:
Something i've been thinking about a lot lately is classic gaming. What happens when Steam no longer exists? Will gamers looking for a nostalgic game of Team Fortress 2 in the year 2025, find that they cant play Team Fortress 2 online because Steam doesnt exist?
The same goes with DLC on xbox or Playstation Network. For example Street Fighter IV just came out, and there will be plenty of DLC which includes new art, and game updates. In the year 2025, how can you go back and play Street Fighter IV on your 360 if the updates and DLC isnt available anymore because it was stored on a gaming network service that no longer exists?
A lot of older games do have patches, but are they still easy to find today? A downloadable patch is certainly different from an update that gets pushed through Xbox Live. For one, we the gamer have no ability to DL the update and store on a dvd, for install at a later date. At least with old video game patches, we could have possibly stored a back up somewhere.
I'm starting to see gaming become a "now" thing, rather than a "forever thing" like games used to be.
Thanks emulation, roms, old pc games, old hardware etc... we can still play yesterdays games, but will we be able to play todays games tomorrow?
Think all of this "pushed updates and DLC" from DRM networks like steam and xbox live will kill the classic gaming phenomena. Its a shame because I can still play Street Fighter 2, just as it was in 1994 but I dont think I will be able to with Street Fighter IV. (Although there is a PC version coming so SF4 is a bad example. Phew)
Re:Yes (Score:3, Interesting)
If you look at the real cost of games over time, they have come down greatly. I remember paying about the same for NES and SNES games in the 80's and early 90's for games as I do today. $40-60 was some serious coin in the early days of the NES. Nowadays, $50 is a days work at minimum wage ($6.55). Through most of the 80's, minimum wage was 3.35, meaning it was almost two full days of work to buy a video game. Hence, the real price among one of the main markets for video games (teens who generally make around minimum wage) has fallen almost in half.
You also need to look at the entertainment value you are getting out of a game as opposed to say doing something like reading a book or going to the movies. A typical game is designed to give 40 hours of gameplay, so your $/hr entertainment cost is about $1-2. That 40 hour mark can vary dramatically- Metal Gear games seem to take about 10 hours, but I still play Civilization II and have probably logged hundreds of hours playing that game. I can think of many more examples where I got many multiples of enjoyment out of a game than the typical 40 hours, especially with online games.
So aside from a few clunkers, you are getting a good deal with video games compared to other forms of entertainment. movies these days are about $10/hr if you factor in soda/popcorn. Books can vary, but are probably somewhere in the $1/hr range, and there is usually little chance you will re-read a book again. I really have to get some work done today, so I am leaving out the cost of the game systems themselves. As my professor would say, I am leaving this as an exercise to the reader :).
Re:Inflation (Score:3, Interesting)
Yes, and *sales* are on a completely different scale to back then, too.
Virtually every household has at least one games console now, and at least one PC. Back then, a computer was a specialist item that not everybody had. Hell, even my mother has a Wii and a laptop now.
Additionally, the cost of creating a game isn't necessarily representative of the time/effort put into it (have you seen the iterations that Counterstrike:Condition Zero went through and then ended up being nothing more than a CS texture pack with a few rehashed maps and a bot?), nor of the end-result. "Peggle" by PopCap has probably sold thousands, tens of, or hundreds of thousands of copies. It was made by a handful of people listed on the credits screen in no time at all. Not all games are large level, 500-mission, FMV, cutscenes, etc. In fact, the majority of them are nothing more than WiiSports - a few simple games rehashed with a new idea.
I don't deny that teams are *generally* larger and games *generally* more complex, but the scale of development means that this just makes things cheaper - in the Spectrum days, a lot of the small "software houses" were nothing more than a set of teenagers with a bunch of tape recorders. That was a recurring time+money cost that isn't present any more, especially not with digital downloads.
Plus, this enormous modern cost is a *one-off* which means that BUDGET games are not funding it... they have been recompensated by the time the game comes out on budget, usually MANY times over. Even comparing to games of more than 10 years ago (e.g. Command and Conquer, Red Alert, Red Alert etc.), the price increase is still present and huge - and for its time the cutscenes, FMV, etc. in those games were unprecedented. Now, of course, there are libraries, commodity hardware, high-level languages, graphics drivers, etc. which save the time and money that would previously have been spent recreating their work, and that money is now spent on artistry instead.
It's not that modern games are suddenly more expensive or harder to make... how hard must Quake have been to make in its day? It needed hardware that didn't really exist just to create the game on a development machine that could run fast enough, it needed extreme optimisation, it needed to cater for new hardware, it needed to do a lot - and that was 1996. I don't suppose that Doom was any different (1993). The work that goes into a game, if indeed that makes up for any of the significant increase in price, is being wasted because today's games really AREN'T worth that amount of input, just to create Yet Another FPS. And now consider - how hard was it to actually write, say, Left4Dead once you had the source engine and a bunch load of programmers and artists who have already earned their salary that year? Did it cost $50 multiplied by the number of sales? Not even close, I should imagine orders of magnitude out.
Re:wow (Score:3, Interesting)
It's common for people to mistake "ironically" with "coincidentally".
Which makes sense, I suppose. Coincidence and irony often walk hand in hand.
Re:The one advantage of the Xbox (Score:3, Interesting)
Although paying for Xbox Live sucks, the advantage of the centralized servers is that as long as MS keeps it running, the games are still playable.
You realize that is the primary advantage of paying for a premium service. The very first game available on XBL is still playable and there are no "sunset clauses" that say they can take down the servers with notice.
Konami sucks that way (Score:4, Interesting)
I've learned to buy Konami games as soon as the first price drop, because they always seem to manufacture too few copies to meet eventual demand and fail to reissue even their highest rated games.
(I have both We Love Katamari and Rez.)
Re:Yes (Score:1, Interesting)
Sure, the game is worth a million to the guy who made it. But to me? Most games are total crap! And I haven't seen ONE YET that was worth my own personal $50. You know, that buys 5 hits of LSD. That's a lot of hours of quality entertainment, not just for you but for your entire household!
Single player games are essentially composed of however many hours of failure leading up to having an uber 1337 character who gets to fight a single good fight, and then the game's over. What's the net worth of that to you? You should have to pay ME to play!
Multi player games are essentially composed of using however many hours of failure you've managed to swallow to make someone else fail because THEY haven't put in as many hours. So what, now I'm the NPC so you don't have to put in as much development costs to get your millions?
Hmmm, reminds me of all those people who won't hire you unless you've suffered enough. Because, they had to go to school and learn a bunch of pointless noise, so do you. Because they had to be a laundromat technician, so do you. etc. It's only fair that way. jeeze I'm bitter...