Jimquisition: Videogames Are A Luxury

[mike1921]

I wonder if someone has explained this to the game developers/publishers.

Sell games at 60 dollars, which 50 people can afford, and you make 3000 dollars.

Sell games at 40 dollars, which 100 people can afford, and you make 4000 dollars.

Sell games at 30 dollars, which 200 people can afford, and you make 6000 dollars.

Now, admittedly, this hinges on your game being able to sell enough copies to make up for the costs, but to me, at least, this seems like a better model than pricing yourself out of the market could ever be.

Sell at 60, 50 purchase, 3000.
Reduce price 3 months later 100 purchase, 4000 dollars.
Reduce price 6 months later 200 purchase, 6000 dollars.

13,000 dollars.

The trick is to know the target pool of potential purchasers on the front end, then treat that data with a first order ordinary differential to calculate the optimization. It's sorta' sad when I end up working these problems on my lunch break for the "marketing people", who couldn't find their asses with both hands and a map.

Except the 50 people who bought it at 60 won't buy it again at $40 and neither will buy it again at $30, and also does the calculation take into account people who would've otherwise bought it at launch end up never buying it because they lost interest or the idea of buying the game just left their mind over time

okay so the equation looks more like this(factoring in the people that already bought it)


60*50=3000
100-50=50 so
50*40= 2000
200-100=100
100*30=3000

In the end 8000

I like how games are priced, why because $60 dollars isn't the least a game can cost, it's the most for the most part. Yeah $60 is high but no ones forcing you to pay it, I never have and I game regularly.

Yes but the success of a game is deemed by it's slaes when it costs $60 early on. And like I said, people will lose interest and not buy the game they that would've bought if it were released at a lower price, and I feel $60 is enough to get people to pessimistically decide that they're just not getting the game period.

Some people do, that's something that's impossible to prove if enough forget about a game to lose money, so I'll stick with the fact that the current model works for the companies and the patient. Also you have to look at the other side of the open market pricing sure some games will get priced under $60 but what of games like Zelda, Call of Duty, and Elder Scroll, that have a large enough fan base to say are games worth $100+ and get away with it.

Something could work and be highly inefficient.
Quite frankly I'm not opposed to an elder scrolls or a CoD costing more money. I highly doubt it'd be a good move for CoD at all and would fuck them hard but I don't think it'd be incredibly dumb to try. If either went over $100....I'd be amazed if it didn't drastically decrease revenue but they could get away with. Like there are games that are worth $60+, I have no opposition to companies increasing prices to maximize revenue of a luxury item, just them artificially keeping prices high among multiple products because no one is willing to try the really ballsy first step of setting their triple A title to $50 new instead of $60

 

[Ipsen]

Great video. Only question: do I get a writing credit?

http://www.escapistmagazine.com/forums/read/9.374224-Games-are-a-luxury-item-So

I kid, but that is two weeks in a row where the topic has come straight from the forums. A special thanks line in the credits might be a good idea for videos like that.

If it makes you feel better, Owyn, I thought of your topic too when I first saw this video.

 

[Your Fearless Captain]

One point was left out. They don't buy it, they pirate it. Down a sale. +1 to the torrent feed.

Exacly why the Wii has piracy rates that rival the PC.

Saying games are "too" expensive is pretty subjective. To some, but not to others, and evidently the people who decide the prices disagree (or they'd lower it), and in the end it's only their opinion that matters.

Their opinion won't matter if the industry collapses.

 

[Taunta]

Just for sake of discussion, what do you think it's gonna take to get the AAA industry to start lowering their prices? (You as in general, not specifically Jim Sterling)

I mean, look at me, I haven't bought a new game in gosh, I think three months. And the last game I bought was $10. And I'm still having a great time. I could probably go a lot longer without buying a new game and still be happy. The reason why I have this attitude is because buying AAA games at full launch price is a big decision for me. I don't have a lot of disposable income every month. I'm making due with the games I already have, and/or finding free games to play.

What I don't understand is why the games industry hasn't gone the walmart route of selling. Maybe people would be more inclined to buy games at launch if it wasn't a big investment. If I buy a AAA game for full price and it ends up being shit, I will be far more tolerant if I only wasted $10 as opposed to $60.

I mean really, sell your game for less money, therefore more people are inclined to buy your game because it's not as intimidating, and the consumers have more money to spend elsewhere, like say, turn around and buy another one of your games.

For example: If you could theoretically quantify fun, and you knew for a fact that both a AAA game and an indie game had X fun, why would you pay more for X fun when you could pay less? I don't understand why publishers don't think of this.

Although I think if anyone's a good example, it would have to be Valve, what with the constant Steam sales.


Off-Topic: I think it's worth noting that I didn't like Jim's show at first. I watched the first episode and was just "ugh". Wouldn't you know it, a few really legitimately interesting and educational episodes later, and his ego has wormed its way into my heart. Thank god for Jim Sterling.

 

[Mkvenner]

God damn Jim, when ever I watch one of your videos I leave with a smile on my face and a bit more enlightened.

 

[Zom-B]

About one days worth of work, for minimal wage, can get you the money for a new AAA game. (Even in Australia)

Sales are low when 'so so' games are being released.

*yawn

Cry me a river.

What an ignorant comment. You clearly don't understand that for many, many people who would like to play video games that that "one days worth of work, for minimal wage" can mean the difference between paying a bill or eating for a week or making rent. It wouldn't surprise me to learn that you still live at home and have no idea what real day to day living expenses are like.

You omitted the first line of my post, is it because you think being the first kid on the block to play a new AAA game is somehow important?

Even with the first line of your original post, your comments are still colossally ignorant and insensitive. I'm surprised you even cared to respond, after your trollish comments that had more than a few people call you out.

 

[lord.jeff]

Binding of Isaac cost $5 new. So far I got 30 hours into it and I bet I'll get at least 10 more. The expansion comes out in two weeks costing $3. I'll probably get at least another 20 hours from the expansion.

Dungeons of Dredmor cost $5 new and between that and the $3 expansion I dropped maybe 140 hours.

Legend of Grimrock cost $15 which is about as much as I'll spend. So far 10 hours in and still liking it.

Torchlight 2 is $20 and I'll probably wait until december to get it on steam xmas sale for less.

Sorry big publishers, there are too many other options for me to even consider $60 and then nickle-and-dime DLC for anything. Screw all "AAA" games and the publishers they rode in on. I won't miss a damn thing in my life if I never play another game with photorealistic grass again.

That's good for you, really it is, but ever considered that some people don't like playing these cheap games?

How could anyone not like a game just because the price is low? That makes no sense.

The same reason that some people want to watch something other than cut price indie flicks and b-movies. Sometimes people want to watch big expensive films with high profile stars and glossy set pieces or special effects. Cut price games are limited a lot by their smaller budgets - which is why there are so many damn 2D, indie platformers these days. Sure, you may get some very good $5 games, but a cheap title will struggle to create something as pretty, atmospheric, and technically proficient as, say, LA Noire. Cheap titles can't deliver everything.

Cheap games do deliver example LA Noire is 19.96 on amazon.

Oh, that game that came out a year ago? Games devalue pretty quickly, as soon as the buzz dies down. I didn't realise you were counting them too.

Why shouldn't I count them? It's not fruit that goes bad after a month, they stay good, I have played Persona 4, Perfect Dark, Medievil, and Super Mario Brothers 3 with the last month, and guess what non of them yet managed to rot.

 

[The Random One]

A fair point, that Jim expends too much energy discussing and eventually reaches an uneventful, mild conclusion.

I feel like I've been tricked into watching Extra Credits.

 

[Jennacide]

The only point of contention I'd bring up is that Todd Howard at least has the right to claim his games do deserve their price tag. Skyrim was the only game last year at $60 that I felt I got more game than I paid for. Plenty of great games were out, with high production values like Portal 2 and Arkham City, but only Skyrim struck me as having far more to offer than the asking price of normal retail.

 

[Metalrocks]

yeah, ?A fits perfectly in this category. they would never sell their product for a lower price because then they cant sleep in their bed which is made of 1000$ bills.
they always try to find a way to make them selfs more richer but then wonder why no one buys there product and why piracy is not going away.
?A is 100% one of them and they dont seem to get it through their thick scull. the only person in this market who really understands the market and the customers, is VALVE. just think about it, the orange box was so damn cheap for 5 games in one. i cant remember ever paying the same price for a new valve game as others.
especially in australia were you really pay so much money for a new game. more then 100$ AUD. i still remember the orange box was over 65$AUD wile other were twice as much.

 

[Crazy Zaul]

This is the 2nd time the topic of the episode seems to have been inspired by a forum thread from a few days ago.

 

[beniki]

Frankly, I hope the AAA games market collapses. Games these days are too bloated with generic crap and shiny graphics. They're overpriced, stuffed full of 'anti-piracy' software that discourages people from buying it... and the grand irony is that most of people who pirate the games are in countries where publishers just won't sell.

Took me months to get Mass Effect 3 here, and longer for Skyrim, and I still can't play the damn things. Steam and Origin won't let me redeem the product code here in Vietnam, simply because I'm plugging the code in here in Vietnam.

Put that next to 1000 word long EULAs that mean I apparently handed over money to visit a game rather than own it, and I really don't see any damn point in buying games any more. It's just easier to go outside and get a football.

I think I'm getting old. Games these days just aren't worth the hassle.

 

[geizr]

As I've said elsewhere, perhaps it is time the game industry crashed in order to kill off the dinosaurs in the industry.

 

[Pandabearparade]

In the case of Todd Howard saying Skyrim is an exception that is worth sixty bucks, I agree completely. Not so much for Twisted Metal.

 

[Aprilgold]

Soooo.... Nobody knew this and this is why he brought it up?

 

[JohnnyDelRay]

As much as anyone here might like to think there will be a "crash", or that the greedy game publishers will suddenly come to their senses and see the err of their ways, the truth is, Diablo III just broke the record of pre-ordered sales, so NO, game sales are not in the slightest bit hurt by high prices. Maybe there haven't been as many "must-have" releases as of late compared to the Skyrim and ME3 launches, but the ones that are supposedly hype-worthy will still sell at prices deemed appropriate.

What other market environment, other than rabid fandom, would a company be daring enough to try the crazy DRM implementation, DLC bullsh!t and everything else they are doing if they had the slightest doubt in success. So, nice call guys, but I have the feeling gaming will go further into the "luxury" category rather than come out of it.

 

[Kuth]

As much as anyone here might like to think there will be a "crash", or that the greedy game publishers will suddenly come to their senses and see the err of their ways, the truth is, Diablo III just broke the record of pre-ordered sales, so NO, game sales are not in the slightest bit hurt by high prices. Maybe there haven't been as many "must-have" releases as of late compared to the Skyrim and ME3 launches, but the ones that are supposedly hype-worthy will still sell at prices deemed appropriate.

What other market environment, other than rabid fandom, would a company be daring enough to try the crazy DRM implementation, DLC bullsh!t and everything else they are doing if they had the slightest doubt in success. So, nice call guys, but I have the feeling gaming will go further into the "luxury" category rather than come out of it.

I don't think so. What we are seeing now is a larger range of price tags appearing in the market. AAA titles are down, but a large amount of smaller companies seem to be grabbing dough and making a decent profit in this new era. This is just me observing the PC market, but there has been an increase in cheaper, high quality titles on Steam and other distributors as of late. It seems that 20 dollars is the new 60, by making a decent budget game with most people are perfectly fine about, much like how movies are produced now.

AAA titles may indeed go into more of a luxary model, but I am theorizing that the rest of the market will go and appeal to a broader customer range with leaner price tags.

 

[Shjade]

It's not just the money ripoff. It's the "Online-Services" as well. I don't want to have 4-5 freakin programs (Steam, Origin, UbiLauncher, Battlenet -yeah I know it's not an actual seperate software, but still-)on my PC just so I can actually run the games connected to them.

Must admit, much as I like Blizzard's games on the whole, that was the tipping point for me on my iffy purchase of Diablo 3. If it had the option of being played purely offline I'd have probably bought it; it doesn't, so I didn't.

 

[Grey Day for Elcia]

Sorry, what? I'm too busy playing the dozen RPGs I purchased a week ago for about $20 to have been paying attention.

 

[BreakdownBoy]

Buy PC games, problem solved. Microsoft (Xbox) and Sony are the people pushing up console prices. How can a company jusitify charging $60 for an Xbox/ PS3 game when the PC version cost $30. The reason, overhead charges for developing games for consoles.

Yes, PC's are expensive but so is next gen consoles, the PS3 cost just as much as my current rig, but I save $30 every time I buy a game for it. In some cases Iget loads of free DLC (mods) because I have the PC version.

It's not developers or publishers that are screwing you over, it is the consoles themselves.

Disclaimer: No I am NOT a PC supremist, I just can't afford console games or pay a huge sum for a machine that can do only two things.