Jimquisition: Videogames Are A Luxury

[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.

I didn't count them because the original post I was responding to specifically talked about eshewing AAA games, in favour of cheap, small studio titles. There is no need to patronise me.

Sorry for that coming off like an insult, but older used games still factor in with this because they are still an option. I believe being poor you shouldn't be buying new AAA games, same as it would be a foolish act to be eating caviar or buying designer clothes while poor. Let the rich foolish consumer support the industry will we sit back and enjoy the exact same thing for a third the price.

 

[Erttheking]

Now that I think about it, I can't remember the last time I bought a full priced game that wasn't Mass Effect 3, ok I'll buy Halo 4, Assassin's Creed 3 and Dishonored but I think I understand what Jim means. I just don't feel like the games on the market are worth $60.

 

[HellsingerAngel]

This entire post made me smile. No snarky comments, no sarcasm, some actual analysis done. It made me smile really big and I just wanted to say thank you before I start to dig into the meat of the post.

Gold is a resource and a commodity, not a product. There is also a finite amount of gold in the world, while for all intents and purposes there are an infinite number of games to be made. Your analogy doesn't work because you're comparing two things that are in no way similar. Gold has value while it is still in the earth, and becomes even more expensive once the costs to mine, transport and refine it are factored in and then again once value is added by using it to make products like jewelry and electronics.

Video games, by comparison, have little value while still "in the ground". A concept and a story are a start, but a video game doesn't have value until you can get it to consumers. Though I will grant that an intellectual property, such as an idea for a game, can have value to the right person.

I used the first thing that came to mind that would be extravagant. You're correct, it wasn't the best example I could have used because gold is a much more finite finished product than video games. However, you can take your pick on the various luxuries we as humans have created and find a similar example for commercial goods. I used luxury cars in a reply to someone else and with some quick googling was easily able to find various figures for prices on luxury cars year by year which has shown a fairly stable market, despite the total automotive market crash for the past little bit. My point was luxury items are expensive and don't fluctuate often because they're luxuries.

While taste is subjective (Portal 2, DA2, Crysis 2, Bulletstorm are all less interesting to me than Amalur, SFxTekken, The Darkness 2 and Soul Caliber 5. Go figure.), most industry watchers and analysts realize that a big reason that game sales are down is because consumers are ready for a new console. It's not just your list of games.

That could be true. It might not be. The new console generations for both Microsoft and Sony are looking to be right around 2014-2015, so I don't believe game sales would slump this quickly. I could see why Xenoblade might not sell because of the early attack Nintendo is putting on but that shouldn't create a numbers decrease that's so drastic. Then again, your proposition also debunks Jim's proclamation that games sales are down because they're too expensive but rather that people don't want to invest in products that will potentially become obsolete in two to three years. I dunno, take your pick, but I do agree that maybe next year we'll start to see a slump when something more substantial about the new console generation gets shown.

You know what I find interesting? In your example here, you can lump all media together, but as soon as we talk about used sales, videogames become something special that don't work the same as used books or used cars (maybe not you specifically saying that, but you get my point).

Actually, they're the exact same problem. Authors don't see the revenue from books being re-sold. Neither do car manufacturers (except maybe spare parts to fix them). It's the pawn shop policy and I think publishers need to back off in that respect. At the same time, GameStop are being total douche bags by basing their entire business model around cutting out the hand that feeds them their products. I feel bad for publishers in that respect where they do need to try and push those new games sales to get the return they'll need in order to keep publishing. the two quickest solutions to this problem are quite literally A) Go all digital -or- B) Stop giving your product to GameStop, take a massive hit to sales for a couple years while they etch out deals with places like Wal-Mart, Furutre Shop, Best Buy and small games stores and dig themselves out of a hole they never really dug (for some of the part). While option B would solve the problem much faster, it's not the more attractive option, for sure. I think pushing a digital media model would really help pricing in the industry and thus am excited to see services like Steam and Origin.

Videogames, in fact, are a different beast than books or movies. They are consumed differently and purchased differently. Very few books or movies ask us to invest 100 hours, for example. Books and movies aren't interactive, either. You can't affect a movie or book like you can a game. If we agree on this point, we can't compare books, movies and games using the same criteria. Personally I would say that games and movies are luxuries, reading is and should be a right and a necessity for all people. Few things impact our lives so forcefully and positively as being able to read and then using that skill to learn about our world, communicate and enjoy our own and others imaginations.

To be honest, I think entertainment as a whole is a necessity. If we didn't have any, we'd all go crazy or do very crude things like start wars for that purpose. However, AAA games are a luxury and there are plenty of games out there running free business models as well as games that are running $10 business models. The later might not be the newest and hottest games around but they're affordable and still great games. Much like a good book or a good movie, a good game never becomes bad. If you want to game, there are opportunities to do so, so complaining that the luxury part of the system is too expensive for you is just petty greed.

I would have a very hard time believing that the reason books have gone down in price- which they haven't really, in fact. see this link: http://www.theawl.com/2011/12/how-much-more-do-books-cost-today - because their production has been perfected. It is one factor, I'll grant you, for lowering prices for products, but it's not the only one. The economy plays a part, as do availability of materials, shipping costs influence final cost as well as employee wages and author salaries. To pin it on any one thing is naive. That being said, aside from a few ups and downs, book prices for new hardcovers have hovered right around $30 on average since the 50s.

So what happened to the other 1550 years books have been in circulation? When you look at media, you need to look at it from the beginning. As it stands, video games are very young right now, more than three times as young as the last big step which would be movies. In 1920, movies weren't in common circulation like video games are today and historically we're booming and on the right track compared to all other forms of media forty years from their conception. Book prices have been relatively stable in the past fifty years, yes, and I would also expect that from video games when we get there in the timeline. Unfortunately, that isn't now. We are far from perfecting the distribution methods of our medium with standard models and the digital age that looms over us isn't helping very much. We're trying to perfect something while also making a culture shift and that can be difficult. however, we're also the pioneers of this medium. We are literally making history and that is a privileged, not a right. Yes, it sucks that some games cost sixty dollars but that's sometimes the price you pay in order to enjoy the premium experience. For all others there's your Super Monday Night Combats, your TF2s, your Dofus', your League of Legends' and so on. Gaming isn't as limited as Jim makes it out to be and it's extremely frustrating when he goes off like the industry owes him something when they don't. If he doesn't like it, he should get a new hobby or luxury to indulge himself in.

 

[mfeff]

-snippers

Better go back and check those figures you gave to the marketing people then, because your math is off here.

Man o man... third response to this post... will the madness ever stop! Nah, just teasing... having of addressed all sorts of various aspects of this, I will try to hit just the hot topics you bring up.

-The first one... these are not my numbers.

The target pool for the example is specified by the OP as being fixed, and I took a pretty big liberty at that, making a further assumption that as the price decreases one's product dips into a different pool of purchasers. Many an economics or stats class will run these types of simulations and cover this topic. For brevity sake I will say, upper, middle, lower class pools, each with there own independent pools of purchasers.

I should of been more clear on that. Although I skirt around it in other post. Get the cost low enough, people that where NEVER interested may purchase the widget. It's cost, just cost... cost into different pools of different interest with tons of overlap. Like working a topology problem.

You incorrectly assumed that the person who bought the game as $60 will then buy the game again at $40 and $30. Which won't happen because no one buys themselves three copies of the same game.

It's not the same person, see above as to why.

The correct math would be 60 * 50 = $3000, then 40 * 50 = $2000, then 30 * 100 = $3000, for a total of $8000.

Correct and I didn't really feel bothered to point that out, as the OP assumed a fixed population with the only mitigating factor as to "sell through" being a cost barrier. Still in yet... 8k is more than 3k, is more than 4k, is more than 6k. Even considering that the premise shows some promise which is why it is done in the work-a-day-world, but the application is suspect. Thing is do we want to go into a cost optimization lesson on the escapist forums? Eh? Shrug... I stand by the notion that the premise of a cost gate is faulty and simply does not go deep enough.

Though you point out the flaws nicely.

1) Will the player who refused to buy at $60 still want the game three months down the line when it drops in price, or will another game have come along that replaced his desire to buy that full-price title? For example, Torchlight 2 will end up replacing several people's desire for Diablo 3 by sheer virtue of the price barrier, and the former isn't even released yet. But since they offered pre-purchase before the release of D3 (deliberately, as a marketing move), suddenly the notion of getting a similar game in the future for only $20 is going to appeal to more people than getting a $60 game right now.

Great use of an example!

Maybe... but in the case of Acti-Blizzard stuff they are very slow to reduce the price schedule as there products seem to be utilizing synergism around creation the Blizzard network and gating there customers to their service plan. Torchlight cannot offer that. Starcraft II is sitting around 44-60 bucks a copy today. It dropped around 6, 2010... so at a year after launch, it's still "high". Also the D3 buy got someone a year of WoW. Which simply reinforces what I just said. Torchlight is certainly a similar product but it is not the "authentic" Diablo clone, nor could it ever really be. I cannot say that people won't purchase both, especially if TL2 goes on the cheap. Can't expect D3 to drop in price anytime soon.

2) Will the game actually drop to $40 in three months, or will it take longer? Most publishers try to juice their title for quite a long time before dropping from the $60 mark. Skyrim was released in November of last year, and to this date (a full six months later), it's still being sold for $60 unless you've snapped it up during a Steam sale....which sort of helps emphasize the point Jim is making, that the price barrier is too high.

Skyrim does something interesting, in that it allows for the leveraging of the player base to create new material for the title. Again, looking at Day Z for Arma II has generated more sales and that was done, for free, and Bohemia Interactive enjoys the proceeds. Skyrim simply built it into it's design. Again if the product has no direct apparent competition in the marketplace, and nothing foreseeable on the horizon, why drop the price? In Skyrim's case I would suspect that it will be offered from time to time as a sale item, and those numbers calculated to see what the new pool of interest at the price gate actually is.

The simple fact of the matter is that even if the publishers were making good games all the time (and generally they aren't), they're pricing themselves too high. And thanks to new distribution methods like Steam, the indie game market has been making a killing off of the increasing greed of mainstream publishers and will continue to do so.

The indie game market exist pretty much because of Steam. Rock paper shotgun ran an article discussing indie games and how even mentioning one on their site could change the fortunes of a developer. So there is truth in advertising after all.

As far as pricing them high, it is based on an extrapolation not an interpolation. I discussed this further up. Prices have also gone up, not down. They will continue to go up, especially considering Day 1 DLC, other odds and ends... a game could be nearly a hundred dollars. As far as the "cost gate", that is the gate. A decision to buy all the extra crap or not. To think about dropping a price one needs data that suggest that, not speculation. Maybe the speculation is right? Let's support it with data. That's all I am saying.

Also as a pro-tip from a math person, you don't need a first order differential equation to perform typical optimization (that is, optimization involving min/max). That would be over-thinking it. Most optimization can be performed with simple algebra and a basic algorithm that can be calculated entirely by hand. Not that it matters for this situation, because you don't need to do much of any math to realize that the publishers have set themselves up for failure by overpricing the product. Sales are down, it's a bad economy, they should be able to put the figurative two and two together. Right now, they're basically saying 2 + 2 = fish.

Great, thanks for clearing that up. What is a math person by the way? Minor in math? Major in math? Help me out here. I personally prefer ODE to this "simple algorithm", I guess your talking about some form of a series, summation... Taylor?

I think the jury is still out as to what publishers have and have not set themselves up for. As I stated, the price has gone up, and will continue to go up. They will be cost gated because it is cost gated NOW, right now, TODAY. Additional content will be sold continually to support the initial purchase.

This solves market over-saturation, maintains a used game scheme, and supports the digital distribution models. What is there to change?

The big factor today appears to be "retention" and getting away from churn.

The used game demonstrates the cost optimization as it is not subject to the publishers contractual arrangement as to the fixed nature of the initial price. The vendor has no contract with such terms with the consumer. The cost changes and product dissemination's work very much like how a brokerage house values a stock.

So it is already here. It has been here for some time.

As far as what the "problems" are... they are a plenty. Cost gating may be one of them... but as to what extent the real impact is... shrug... not my problem. I simply doubt that it is much of one, and to that end seriously question any argument based on fixed populations and assumptions as to what the audience really is. That goes on all sides of it though, publisher, vendor, developer, and audience.

Need more facts to make informed decisions. If it was as simple as reducing the price to cash in on more $$$ it would of already been done. So that is clearly not the plan. The plan is the one in plain sight.

 

[Arnoxthe1]

OK. I think we've had enough of discussing how things should be. Let's talk business and about the bottom line because that's what publishers are going to look at.

If the publishers are going to lower the price point for new games, it will be because they feel it will net them more on their profits. So the question, the one that is the most relevant, and what we should be asking ourselves is, can publishers pull in more money if they lower the price?

EDIT: I missed the discussion above me when I posted this.

 

[Aardvaarkman]

Video games actually offer pretty good bang-for-the-buck. A decent game actually costs very little per hour of entertainment delivered. Compared to going out to the movies, buying DVDs, eating at restaurants, going to nightclubs, they are actually inexpensive.

That's not even considering other hobbies one could get involved with, which get expensive very quickly.

 

[OldDirtyCrusty]

Great show. I would say 60$ is the price for the luxury to play a game early, right from the start. I try my best not to give in and keep waiting but sometimes i`m just a whore (MAX PAYNE3 weeeEEEEEEEEEeeeeee)and part of the problem.

Good discussions here but i have nothing new to add. It`s a bit saddening that the game-industrie wastes so many resources on advertising. The average regular gamer is thirty and good informed with the www and sometimes even printmagazines. Who would buy cod or mp because of adverts on tv or in cinemas, if this person isn`t into gaming at all? Gaming people are informed anyway (at least about the games) and i doubt that they get many people to buy a console/pc and this one special title over a tv advert to justify the costs of advertising. With people wanting this game and being informed about it advertising seems senseless, since they would`ve bought it anyway.

 

[Ohlookit'sMatty]

The man makes a very simple but important point in this weeks video. Without knowing it I realized that I have classed games as a luxury and being as poor as I am I've not bought a single game this year. In fact both myself and my house mate are huge gamers but also both have other, more important things, to be spending our money on (rent, food, heating, etc). So I do not think that either of us have bought a video game at all this year.

-M

 

[Smeggs]

Kind of off-topic, but does anyone know what game that is at 3:03 in the video? Is that that Dragon's Dogma thing I've been hearing about?

 

[Shjade]

You will most likely be able to play Diablo3 offline, just with out muliplayer functions.

Unless you can point to a source saying they plan to alter D3 in the future to make this possible, I'm going to assume you're saying this out of optimism rather than likelihood.

 

[Treblaine]

Game developers: "Games are too expensive, except for my game..."

Gaben: "Team Fortress 2 is Free, as will DOTA2, oh and here's a Steam Sale with 50% games that came out only 6 months ago."

Game Developers: "heeb heeeeb haaaay ah what now??!?"

HiRez Studios: "Hey! Check out our free to play Tribes Ascend"

Game Developers: "Well, Those are just a few rare exampl..."

League of Legends
Planetside 2
Hawken
ShootMania: Storm
Mechwarrior: Online
Dust 514
Reign of Thunder
Blacklight Retribution

 

[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.

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.

That's an interesting point actually, I get kind of caught up in the shitty things happening in the industry I tend to overlook some of the good, or at least hopeful. It would be good to see if they don't get steamrolled and actually make a living, starting up new genres and creative, daring ideas, instead of going into the saturated genres that already exist. And not being subjected to the crazy policies of EA, Ubisoft and the like.

Hopefully the climate doesn't force this kind of outcome, I'd like to see more evolution into great IP's such as CD Projekt, and I'd like to see more console support. That would definitely level the field a bit, but no doubt the giants will continue doing what they're doing as long as it keeps making tons of cash.

 

[Comando96]

OK... as a guy studying economics (fun, fun) I'll just leave this here.

Now, the video games industry is hedging its bets that the video games market has Inelastic Demand. This meaning that they hope they will gain more money:
Selling fewer products at higher prices - Graph on the Left
Instead of
Selling more products at lower prices - Graph on the Right

As video games have pretty much infinite supply in the long term (which is something economics breaks upon hearing as it is just an insane concept not meant to exist) they may as well fetch for as much money as they can get.

The method to do this? Sell a game at $60, and then allow that price to fall and fall and fall over the next months so that a year or two later the game is $10. Basically you are paying the higher prices in order to play the game a year in advance. However if you pick the game up a year later, then you pay a low price while the developer and publisher are still getting some money, rather than the Used games market (I'm a PC gamer and have little taste for it, possibly out of jealously).

Now in this scenario EVERYONE (but retailers) WIN! The consumer gets lower prices for older games, and the publishers make lots of money and can dent the used games market by LOWERING THEIR SELF ENTITLED PROFITS.

Sadly this won't happen as the publishers are mostly assholes

 

[williwod]

While the argument sounds convincing, I'm not sure i agree with it. Video Games Sales took little more than a miniscule dent in 2008 during the Global Financial Crisis, the one time you'd expect luxury goods to be eliminated from household budgets. I mean, sales actually increased during 2008:

http://au.gamespot.com/news/npd-2008-game-sales-reach-21-billion-wii-play-sells-528m-6203257

And as for the Decrease in Sales in the U.S during April, i doubt its due to people suddenly being unable to afford luxury goods such as games, seeing as prices haven't gone up from last year and the American Economy is relatively stable for now.

 

[Slayer_2]

Lower price is what encouraged me to purchase The Walking Dead, a game far better than most AAA titles these days. Many indie developers are finally realizing that lower price = more sales and less piracy. Usually enough that it balances out, and gamers are more happy, plus you have more people playing your game.

 

[Treblaine]

I do love how Jim falls into a pretty big logical fallacy here. Just because sales for 1 game is down, doesn't mean that sales for games as a whole is down.



Also: there are plenty of alternatives if you can't afford to buy a AAA game, for both console and PC. Like Diablo but can't afford it? How about Path of Exile (free to play) or Torchlight 2 (20$)? There's a swath of cheap games on the PSN and XboxLive Arcade that are well worth the modest investment.

Indeed I would make the arguement that gaming is at the cheapest it has ever been. There are so many options now if you're a gamer, that simply did not exist 10 years ago.

Uh, no. He gave a graphic example of the best selling hardcare game selling way less than one of the less successful games of last year, so it's not just the sudden dropoff of casual gamers from Nintendo basically giving up for the past 18 months.

Yes, it's great on PC, but Consoles are getting utterly shafted without lube. Almost every game has huge parts of its ready-to-go content that was supposed to be in the game gutted and sold back to you, it doesn't matter if it is on the disc or not, it was supposed to be there. Xbox Live Gold membership has gone up to $60 per year.

Here is the problem. Games didn't used to Cost $60. A relatively short time ago in the days of Playstation 2 and Original Xbox they were $50 at most and $40, there has not been significant inflation since then. The $60 price point for the "next generation" was accepted as the early adopters were generally more affluent to blow $400-600 on a new console and then even have a HDTV to use it, $60 seemed "worth it".

But that was when it was small install base. Now it has gone from about 10 Million to over 100 million current-gen console owners, only now they are asked to pay $60 at an absolute minimum for every game, new. Used games, that were supposed to be a pressure release valve has totally blown off the bolts, it was supposed to be a side business so the less affluent can get a hand in, instead it has become so well established the markdowns aren't that great but VITAL not just for those in dire straits but just those on average income. Average income has actually fallen since 2005 yet games cost 20-30% more than before.

Steam sales show how sales seem to be on an asymptomatic exponent with price. A small price cut hugely increases sales above the money lost from lower price point, while a price hike crushes sales sales nullifying the extra revenue per game.

PC has some good games for a low price but consoles do not. Sony and Microsoft won't let a game like Syndicate be released on XBLA or PSN for only $20, they say they must release it on disc where when everyone else had had their say with publishers too you know it is $60 minimum plus several dollars of DLC that should be on disc (or is and is arbitrarily locked).

It's interesting the Video Games crash in 1983 didn't really affect computer gaming, it continued along on its path of steady growth. I'm worried there may be a console gaming crash caused by all the bullshit on consoles and it being sparked by a totally botched next-generation transfer. It could get out of control very quickly and like musical chairs when the music stops a lot of people are going to find themselves without chairs.

 

[bjj hero]

Do you know what other things people keep buying that are too expensive for them? Cars and houses. There was a huge subprime mortgage crisis in the USA during the 00s (http://en.wikipedia.org/wiki/Subprime_mortgage_crisis) where lots of homeowners purchased outrageously expensive homes and then couldn't keep up the payments as the economy collapsed. But homes still sell. There are entire TV shows devoted to repo men where you can watch them repossess "luxury" cars from people who can't afford them. By now you'd think that every single American would have a vehicle and yet new cars continue to sell year after year, despite costing tens of thousands of dollars.

I don't think that anyone is arguing that current game prices are going to collapse the industry, but we'll definitely see it shrink if publishers continue to adhere to a $60 price point + DLC run wild. Gamers will focus on sure fire games that they really want and it's DLC in favour of indies, new IPs and less popular genres.

And regardless of whether or not prices have come down in relative terms, $80 for an NES game in the 80s and $60 for a PS3 game now is moot. The fact is that both prices are too high and a lot of customers have trouble or are uncomfortable paying either price. The industry was wrong then and it's wrong now. If it wants to stay healthy it's in it's own best interest to keep it's products affordable and in consumer's hands, not up on a shelf, unsold, waiting for "rich" people to buy them.

That being said, Sober Thal's comments were trollish and ignorant and I've got no problem calling out someone when they engage in such flamebaiting.

There is a difference between houses, cars and videogames. No matter how much homes and cars cost people will buy them as they are necessities. People will go into debt to own a house as they need somewhere to live, the same way you will go into debt for medical bills, food etc. Somethings you need. Games are not on that list. Houses get more and more expensive to the point where people cannot afford them and they are over priced, then prices come down.

Games are affordable, demonstrated by the millions and millions of people who buy games. As I said, the price of new titles has come down in real terms. If games were now £120 I think sales would nosedive so its hardly "moot". Games are more affordable now and interestingly more games are sold now. There is also a mix of price points for games so no one is excluded. Games are worth whatever people are willing to pay for them and they are selling pretty well at $60. You say the industry will shrink if the £60 price point doesnt change but its been there for a while and seems to be doing fine.

 

[FEichinger]

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.

Halving the price doubles the amount of sales you need. Wealth is spread hierarchically, though, so, the amount of people with a low disposable income is much larger than the amount of people with high disposable income. Thus, in theory, the lower price doesn't only yield twice the possible sales, but far more.
The thing in question here, to get this ironed out, is the demography, though. We really need to pull studies on that for once, not on the basis of people who already bought the games, but based on the people interested in the game to begin with.

That said, I'm gonna stay out of that whole "games are a luxury" thing ... Mainly because I didn't watch the video (as I really can't stand Jim sometimes, regardless of how reasonable he is).

 

[Living_Brain]

thank god, for Valve.
Giving basically two games in one for $20.
Portal 2

 

[JEBWrench]

Also: There are plenty of amazing titles on XboxLive and PSN. With some offering hundreds of hours of gameplay content

Case-in-point:

http://www.vgchartz.com/article/250137/minecraft-xbox-360-edition-sells-1-million-units-in-5-days/

Not to mention, Sniper Elite V2 sold 142,000 units in its first week alone - just on the XBox 360.

The Prototype 2 point was pretty much a shot in the dark that missed.