Wednesday, October 29, 2008

rigid pricing

This Christmas season, there's a ridiculous number of good/great games for both regular and occasional gamers to choose from:

Spore, Fable 2, Dead Space, Fallout 3, Guitar Hero: World Tour, Far Cry 2, Saints Row 2, Portal: Still Alive, Rock Band 2, Midnight Club: Los Angeles, Quantum of Solace, Tom Clancy's EndWar, Gears of War 2, Banjo-Kazooie: Nuts & Bolts, Call of Duty: World at War, Command & Conquer: Red Alert 3, Left 4 Dead, Need For Speed: Undercover, Tomb Raider: Underworld

... and that's just two months and one platform!

This strikes me as a year which is great for gamers and not so great for game makers. The competition is simply too thick (for 360 and PC games, at least).

In other industries, pricing would adjust to the crowded market. But in this industry?

PC game publishers are only recently learning to be fluid, it seems, despite their products having little resale value. Less than ten years ago, a game that offered ten hours of gameplay was priced the same as one offering fifty hours of gameplay, regardless of quality. The situation has improved somewhat since then, but prices are still determined more by publisher fiat than by the market.

The prices of console games are even less fluid, because each console's publishing is monopolized. Microsoft controls all prices on the 360, Sony all prices on the PS3, Nintendo all prices on the Wii. I could be wrong, but I don't think console developers can adjust the prices of their games without approval from these publishers. If so, it's a tragedy, since developers have far greater incentive to respond to the market than these publishers.

Is there reason to hope game pricing, particularly on consoles, will become more dynamic in the near future? What might lead to more variation in pricing?


  1. Online distribution seems to be the only method of deliver that is carrying promise to eliminate the moderating middle man who wants to make and extra cut and provide genuine normal market competition. Kotaku recently posted about this (yet again). I personally don't think the holiday rush is good for the industry as so many games I would play otherwise go neglected because of time and money constraints. However, if you look at the mass market, people forget stuff is there shortly after it launches so everyone wants to be in the launch window of Black Friday when store shelves get stripped bare and desperate late comers are trying to make a good excuse for their trip.

  2. Download pricing seems unpredictable so far. For example, IGN's Direct2Drive now has Bioshock selling for only five bucks more than Penny Arcade's game. That doesn't seem like a market-driven scenario to me, though I could be wrong.

    Plus, game downloads generally get sold at shelf prices. Servers cost money, but I doubt they cost half as much as packaging, printing, and transportation. Shouldn't downloads be cheaper? I doubt the average consumer perceives a hard copy and download as completely equal. Download sales would compete more with shelf sales if they acknowledged the difference.

    Incidentally, D2D is selling the Red Alert 3 download for ten bucks more than Amazon is selling hard copies. Crazy.


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