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Forums - General Discussion - $59.99. Who determines a video game's standard price?

People or the market do. Companies have learned $400 is the optimum price for a console day one and $60 is the game price day one.

NEO GEO was around $600 when it came out and games were $100 or more. If it had succeeded as the model that is what we'd have today.

Unless the industry as a whole shifts to $70 I think companies independently will try to find add on measures to make beyond the initial $60.



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Veknoid_Outcast said:
SKMBlake said:
Actually 60$ is way to low for AAA games, that's why all the lootboxes crap are common now

I think that canard was officially put to rest this year: http://www.gameinformer.com/b/news/archive/2017/11/20/ea-says-battlefront-ii-microtransaction-change-will-not-affect-earnings.aspx

C'mon Veknoid... What EA said is that their projected earnings for the entire fiscal 18 year won't be materially impacted by the temporary shutdown in microtransactions for Battlefront 2. For a company that makes about a billion dollars in profit each year, it's easy to believe that a short shutdown of microtransactions in a single title won't impact it too much, but that does little to disprove his claim...



Nobody and everybody...

You can release your game and charge as much as you want and the consumer will define if the requested price is fair or not.

But as rule of thumbs they verified that 59,99 is well accepted in USA so most games are released at that price.

Last edited by DonFerrari - on 02 January 2018

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Teeqoz said:
Veknoid_Outcast said:

I think that canard was officially put to rest this year: http://www.gameinformer.com/b/news/archive/2017/11/20/ea-says-battlefront-ii-microtransaction-change-will-not-affect-earnings.aspx

C'mon Veknoid... What EA said is that their projected earnings for the entire fiscal 18 year won't be materially impacted by the temporary shutdown in microtransactions for Battlefront 2. For a company that makes about a billion dollars in profit each year, it's easy to believe that a short shutdown of microtransactions in a single title won't impact it too much, but that does little to disprove his claim...

Without full access to game budgets, we can't know for sure either way. In the absence of hard data to support either side, we're left with circumstantial evidence like that investor report. Maybe it doesn't disprove the claim, but has anyone, anywhere, proven it?

After catching EA, Activision, WB, et al. with their pants down, I'm going to remain skeptical. 



Veknoid_Outcast said:
Teeqoz said:

C'mon Veknoid... What EA said is that their projected earnings for the entire fiscal 18 year won't be materially impacted by the temporary shutdown in microtransactions for Battlefront 2. For a company that makes about a billion dollars in profit each year, it's easy to believe that a short shutdown of microtransactions in a single title won't impact it too much, but that does little to disprove his claim...

Without full access to game budgets, we can't know for sure either way. In the absence of hard data to support either side, we're left with circumstantial evidence like that investor report. Maybe it doesn't disprove the claim, but has anyone, anywhere, proven it?

After catching EA, Activision, WB, et al. with their pants down, I'm going to remain skeptical. 

We do know that game budgets have been increasing while game prices didn't. We do know that plenty of companies went bankrupt due to this during the 7th gen. Those seem like pretty good indicators of his point to me..



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Market determines the price of a game. Along with paying the developer, producer, marketing, store that its being sold at, etc.

If a majority of games are being sold for $59.99, you don't want to sell it for $69.99 especially if its a new IP because of possible loss of sales. You don't want to sell it for less than that if you think it will sell well due to possibly losing revenue on a per game sold basis. Its just a supply vs demand determining price scenario.

There is no main governing body that states to developers "You must sell this game for $59.99 if you are selling it on a disc/cart.".

Games sell well at $59 so developers will continue to sell at $59 until they feel otherwise. Later on they may bump up to $69 just like the time games bumped from $49 to $59.

Last edited by shoichi - on 02 January 2018

As everyone else has already said, it's the market. Now, games could go up in price. There is no reason the publishers couldn't charge more, but no one is willing to try it.

That said, not every game is $60. Even retail releases have varying prices. I bought Has Been Heroes for Switch at Gamestop, physical, or $20. The question is how elastic prices are in the video games industry. Would a game sell better if it was $20 versus $60? Personally, I don't think so. Nevertheless, it is something publishers don't want to bother with, likely because they are risk adverse in this area.



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Ka-pi96 said:
SKMBlake said:
Actually 60$ is way to low for AAA games, that's why all the lootboxes crap are common now

Too low? They make hundreds of millions in profit by selling AAA games at $60. How on earth is that too low?

Let's take a popular game: Super Mario Bros. released on the NES in 1985. In today's standard, it's an AAA game. But only 4 people were involved in its development. And still can be selled at full price.

Today, an AAA game demands hundreds of people involved in its development (and assets bought to several companies or developers) but still costs the same 60$ as the 60$ game you bought 10 years ago.

 

The same thing happened with the film industry. A 2017 blockbuster costs at least 250 millions $ so they have to hope people will eventually see their movie to make benefits.



Ka-pi96 said:
SKMBlake said:

Let's take a popular game: Super Mario Bros. released on the NES in 1985. In today's standard, it's an AAA game. But only 4 people were involved in its development. And still can be selled at full price.

Today, an AAA game demands hundreds of people involved in its development (and assets bought to several companies or developers) but still costs the same 60$ as the 60$ game you bought 10 years ago.

 

The same thing happened with the film industry. A 2017 blockbuster costs at least 250 millions $ so they have to hope people will eventually see their movie to make benefits.

The market is also much larger than it was 20 or 30 years ago though. Games sell more than they did back then, especially the case with AAA games.

Not to mention that companies have a lot more ways to make their profit compared to 20 or 30 years ago. A game doesn't stop making money once it's released anymore, with DLC and other additional content being made for them.



Teeqoz said:
Veknoid_Outcast said:

Without full access to game budgets, we can't know for sure either way. In the absence of hard data to support either side, we're left with circumstantial evidence like that investor report. Maybe it doesn't disprove the claim, but has anyone, anywhere, proven it?

After catching EA, Activision, WB, et al. with their pants down, I'm going to remain skeptical. 

We do know that game budgets have been increasing while game prices didn't. We do know that plenty of companies went bankrupt due to this during the 7th gen. Those seem like pretty good indicators of his point to me..

 

Ka-pi96 said:
Teeqoz said:

We do know that game budgets have been increasing while game prices didn't. We do know that plenty of companies went bankrupt due to this during the 7th gen. Those seem like pretty good indicators of his point to me..

We also know that the percentage of digital game sales (which means more money for publishers/devs) have been rising as well though.

Plus I think it's pretty safe to say that the majority of times companies lost money on games it's because their games just weren't good enough (or their budgets were far bigger than they needed to be) to attract enough sales. Increasing the price of those games probably would have lead to even fewer sales, thus they'd still be going bankrupt.

Kap stole my thunder ;)

But yes. Digital sales are on the rise, and publishers take a larger cut of those sales (plus they spend less on overhead).

There's even evidence to suggest that game prices should be lowered from $60 -- that $60 is a high enough threshold to deter a consumer altogether, resulting in a missed sale. A lower price tag would make the product more desirable, and instead of 50 people paying $60 for a game, you might have 150 people pay $40.

The point is this: there are other solutions to this budget problem, apart from "pass the expense on to the end-user in the form of loot boxes and micro-transactions." If a game's budget is so high that it needs to sell five million copies at $60 (plus a few hundred thousand $30 season passes) then maybe the budget has gotten out of control. 

If I'm a publisher looking at the equation Revenue - Expenses = Profit, why do I need to attack the Revenue side of things? Why not tackle the Expenses part? Many of those now defunct 7th gen publishers failed because they spent beyond their means and tried to wedge their talent and intellectual property into a "AAA" model. Look at something like Hellblade, which recouped costs in three months. The studio kept costs down by maintaining a small development team, applying for loans (now paid back), finding tax breaks in the UK, and using savings (which existed because of financial foresight).

I'm of the opinion that micro-transactions (mtx) and loot boxes are unnecessary to keep games like Call of Duty and Battlefront afloat -- that it's less about securing commercial viability and more about filling coffers as quickly and effortlessly as possible. But even if we assume a dire situation where EA and Activision would close shop without mtx revenue, why do we need to accept it? Especially when, in 2017, it's been proven that mtx economies are having deleterious effects on game systems -- to the point where the temporary removal of loot boxes in Battlefront II necessitated a dramatic rebalancing of the game's economy and progression system. 

I am all for keeping the video game industry healthy and profitable. But I just can't defend invasive and predatory mtx practices as a way to maintain that profitability, especially when other, less exploitative solutions exist.