Astalano said:
Also, I'm pretty sure artificially keeping your price low if your demand allows you to go much higher is illegal.
Keeping your price at a level that is unprofitable because you can afford to lose money can be illegal if you are determined to have a monopoly and are using it to hurt your competitors; this is called predatory pricing
Example: You and I both sell product A, it costs us both $10 to purchase A from its manufacturer, and you're an established business whereas I am a newcomer. I sell A for $12 because I want to make a profit, you see the price I've set and decide to sell A for $8. You are losing money on every single unit of A you sell, but if you have cash reserves or other sources of income (more diversity), you may be able to sustain the price until such time as I go out of business; then you can charge whatever you want for A.
tehweave said:
Correct me if I'm wrong, but inflation has changed things since 2000-2001. SO. Since video games are probably 8 bajillion times more expensive (hyperbole) than they were before, and developers are still selling the brand-new ones at 60 bucks a pop, I'm guessing they're losing money.
It isn't necessarily the case that price needs to go up to match inflation. Walmart is an interesting case: rather than increase price with inflation, it will approach suppliers and ask them why the price has not gone
down for the product, expecting the supplier to find efficiencies over time. Now, you can argue that Walmart is evil or that it bullies its suppliers, but they have found a way to allow prices to stagnate despite inflation.
If this seems unrelated to gaming, consider a developer who releases sequels to their games. There are costs from the first release that simply do not exist in the second, and there are efficiencies to be gained by using the the same engine and modelling tools again for the second game. Much the same can be said for new IP for which you use the same tools as old IP.
As for the developer's example of $60 games only appealing to hardcore fans, I would tend to agree. My personal cutoff is $50 (also known as $49.99), unless it is a game I so desire that no price would deter me from pre-ordering. I'm a huge fan of The Witcher, am unreasonably excited about SW:TOR, and enthusiastic about Mass Effect 3 (I can't say huge fan of Bioware anymore after ME2 (kind of annoyed about the poor story), DA:O - Awakening (very upset), and DA2 (which I will not purchase until it's on a crazy Steam sale)); for these, price isn't a consideration. However, I am unwilling to risk more than $50 on something that is unknown, or is so similar to everything else that I question its purpose (I'm looking at you, generic shooter #47 of the year).
If I'm really looking forward to a game, I'll pay whatever is asked of me. If I'm kind of looking forward to a game or its premise seems interesting when it pops up on Steam, I'll pay $50 once I see enough positive reviews. Otherwise, I will either never buy it, or wait for the ridiculous Steam sale where it costs as much as an indie game. Thanks to Steam's sales, I've got more quality games than I will ever have time to play, let alone finish, so good luck with your $60 price point, publishers, maybe I'll see you in the bargain bin.