How well do you think Metroid Dread will sell?

[GoOnKid]

IcaroRibeiro said:

GoOnKid said:

I'm sorry but no, prduction values are irrelevant to the final price. A company can spend hundreds of millions on dollars on one product and at the same time only a few dollars on another product but still offer both for the same price if they want to. When you say platform userbase, branding, marketing and selling price, you mean demand and yes I agree with this very much. What defines the price is the expected demand, and Nintendo realizes that the demand for this game is very high, so they have zero reason to offer this game at a lower price. And yes, their approach to pricing is a strategic one. They don't drop prices like almost everybody else in the business because they simply don't want to, I also agree, and they have their reasons. Strong branding is a big reason behind it, you already said that as well. We actually agree on a lot, just not on the production values thing.

I'm confused, you say budget and production value have no correlation, but then agree with me when I say budget is defined by potential revenue? 

Remember revenue is nothing more than units vs selling price. The market behave in a way such as when you lower the price, the sales increase. Of course, this is not a simple equation, but this a market rule unless we are talking about Veblen's Goodies like let's say very rare limited editions

If a company is willing to keep their prices high even if it will thrown away sales they are doing so for 2 reasons:

a) Lowering the price won't drive enough sales to increase the profit margins. This is the reason why 90% of games launch full price, even if they suffer mandatory price cuts only 2 months later 

b) The company wants to keep a luxury image as much as possible even if it leads to smaller profits. This is the reason why dead games (sales-wise) never suffer price cuts,  like Astral Chain  any reason to keep selling it for 60 USD after 2 years? 

If Dread launched at 60 USD and then started selling for 40 USD after 6 months I'm sure it would have much bigger legs, bigger sales and bigger revenue, but Nintendo don't want to damage their image. 

Well I'm confused now as well, because I never spoke about revenue at all. I said Nintendo can get away with full price because the demand is very high. Revenue is calculated as units x selling price. Now when you substract the production values off the revenue you get profits, but that isn't what we were talking about.

Yes, lowering the price increases the demand, but I am trying to tell you all along that the demand is already big enough to justify the full price. And again, the pricing is a strategic decision. A full price game that gets devalued after a short period of time will lead to a better performance in the short term, but it will damage the brand in the long run because at some point the customer expects this with future games as well. This is why so many gamers are waiting for price drops nowadays: they simply got trained to do so. In the long run, this strategy damages the companies much more than what they gain in the short run.