Question of the Week Responses: Next-Gen Games Price Increase?

The cost of creating games continues to rise. So in order for developers to stay in business and continue making games, either the prices must increase or the market must expand.
John Bolton, Page 44 Studios

Yes, to be profitable, I think the costs will have to go up. Its unfortunate, but I don't think sales will increase enough to cover development costs otherwise. Conversely, I think that PSP and DS games should go down, as they can be made with smaller teams.
-Anonymous

As the costs of making a videogame increase, the expense must be recovered somewhere, so for the short term, yes. One thing that tends to be forgotten is that as the number of polygons that you can render each frame goes up, someone has to create the content that uses those polygons. A better solution for the long term would be to figure out a way of generating game geometry that scales better. If content creation tools cannot keep pace with the increasing complexity of the target platform, costs of developing games will continue to spiral upward.
-Anonymous

Games have been approximately the same price point for twenty odd some years. It's really weird that everything else goes up in price, and not games, or game systems. I remember the original Nintendo system coming in at around 400, dropping steadily to the 199 range. Games were around 60 bucks. I think price points that reflect inflation might be a start, especially in consideration of AAA titles, and the increasing cost to produce them.
-Anonymous

There will definitely be some moaning and groaning from consumers if there is an increase in the price of new releases. The typical price that we think of for video games now is $49.99 for the typical brand-new, highly-anticipated title. Most consumers do not know about the amount of money it takes to produce a game and how spending that $49.99 on that game will support that company so they can continue to make better games. So, if the technology calls for higher production levels, then yes, games need to increase in retail prices if the company honestly feels it is needed.
-Erica Johnson

I believe they do, but maybe not for the reasons most people are thinking (rising cost of production, etc). I would like to see game prices increase in hopes that increased cost would prompt the audience to be more discriminating in their tastes, and thus cut back on the number of overall crappy games being produced. At the moment it seems that so many games are thrown together piecemeal simply because they can generate enough sales to make a profit with a pretty box and little else - hopefully a higher cost to the consumer would cause them to think twice.
-Evan Rothmayer, ISU

Tricky, as the cost of development appears to be going up for next gen consoles, I expect that this will even out over time, so it's a hard one to answer, working at a publisher I guess I should say “yes”?
-Anonymous

If the games are going to be of higher quality, as it seems they will be from early visuals and speculation, I say YES! We griped about the prices of movie tickets being raised but we have pretty much become accustomed it and the movies that we see today are not of better quality, longer length or more enjoyable than those of the past. So if we can pay more money for the same quality movies, there shouldn't be any problem with paying more for games. Especially since they will provide better graphics, more interactive level designs, and more hours of gameplay than previous gaming systems. And don't forget that to make these higher quality games developers and everyone else involved in the process will have to put in more hours of work especially at first when everyone is becoming accustomed to working on these new systems.
-McConnell Lamarre, Brandt, Steinberg & Lewis LLP

Yes, but only if that increased price goes entirely to the developers who are facing the increased costs of creating next generation content. I'd hate to see more of gamers' money falling into the hands of greedy publishers who really don't have any increased costs as a result of the next generation technology. However, the developers need to realize that next generation technology does not instantly make a good game. There's no point in spending millions extra just to create fancier graphics or sound when you will make gameplay suffer as a result. A better solution to cope with the higher costs of next generation games would be to just plain get rid of the publishers and retail stores all together. Having everything as a downloadable purchase ensures that all of your money is going straight to the developers who deserve it. Effective retail prices could drop but only this time, the developers will get their fair share of the deal.
-Anonymous

I think that it is going to increase. With the increase in everything else, increasing the price for the disks or cartridges would help balance out the price income.
-Jeremy Smorgala

I feel that the price of the games need to be relative to how good the game is, who is making the game, and how long it took to make. When Microsoft makes Halo 3 and Nintendo makes Super Smash Bros. for the Revolution, games will take longer to make, cost more money to make, and cost more money to market and promote. Honestly there are some games that come out for fifty bucks right now, which take six months to make, and cost a very small amount of money to make in comparison to the game giants ten bucks. So if a company like Microsoft spends ten times as much money on a game to make...yes, it will be a better game and more people will buy, but they also deserve to charge more for their games.
-Brooks Pentheny, Microsoft

Software prices for gaming consoles are likely to be on the rise whether the consumer likes it or not. The interesting part about the price increase is that it is not really coming from the cost of development which is only incremental. The real cost increase comes from following the movie industry where a $100 million movie only cost about $20 million to make, but they spent another 80 in marketing and advertising. Notice how PC games are not really advertised on television and pricing is fairly competitive, but console games run prime time spots on some channels and their prices are on the rise again, using the new game systems as an excuse.
-Anonymous

I think that companies need to do everything in their power to keep prices at the current level. We have already seen that these prices do pretty well at making billions of dollars for the industry, so why increase? Greed? At the same time a slight increase to offset new technology costs may be hard to avoid. However if a price increase happens, all titles for current systems should be lowered to help offset the cost and also open gaming up to a larger crowd.
-Tony White, NovaLogic

No! I think we are at a plateau in game pricing, even at this stage the price of a game is a strong incentive for software piracy. Also, we are not really seeing anything revolutionary for higher prices to make market sense, no big jump in quality to equalize the price/quality ratio, just better graphics (exciting, but not revolutionary better) and clearer sound. No new and improved method of player interaction with the game; no assurance that the all new and higher priced games will offer consumers a superior experience to warrant the price hike.
-Jake Wolf, CleverDesign Entertainment

The idea that next-generation retail prices should increase is nonsense. A rise in prices will only drive a greater percentage of users to the shady depths of piracy. A move toward lower pricing would make more sense, and should be done as a mere first step toward a business model more like iTunes.com than your local game shop. Look at what happened to the RIAA (or more recently the MPAA) - if the videogame industry does not learn from the mistakes of the past it will be condemned to repeat them.
-Matthew Wilson

No, they do not need to be increased. For the most part I wait for the price to drop or for a used game to become available with the prices today. If the prices increase, I think more people will just rent the games or try and copy their friends' games. If the cost of making a game is so large that it's sales can not make a profit then the game probably sucks in the first place and the ideas behind it where not well planned. Just because you can hire 100 artist and programmers does not mean you will end up with an enjoyable game.
-David Morton, The World Bank

No. Games are expensive enough. People will buy fewer games if they're more expensive, or wait until they can find a used copy for less money.
-Carolyn Begle, Stardock

I think they're already too expensive. Most games I buy are used... and I even wait a few months for the prices to drop. New games are already priced at around $70 CDN... that's almost 3 times as much as new movies on DVD... and in my opinion movies have more replay value than most games do. I'm probably being a little too drastic... but more expensive games are going to kill the market. People are going to flock to the games that get all the hype, and then they won't be able to afford much else. Things are going to get too competitive... might be a “rich get richer... poor get bought up” kind of scenario.
-Giles Ching

No, absolutely not. Piracy will only be buffed up if that happens. Costs need to be reduced in order to make the buyer buy original copies rather than illegal ones. In countries like mine (Mexico) people buy PC games a lot; however they don't buy the original copies because of the high prices. If a decent price is offered, piracy will diminish and stop being the nuisance it has become.
-Alfonso Mauricio Camacho Ortiz

To be truthful, I think that retailers already make too much money on games. The developers and producers don't get a fair cut in the present process. If there was a way to increase that percentage without retailers raising their prices, sure. How many kids out there really have $50 in their pocket for a new game every week? How many adult gamers should actually spend $50 or more per week on games? Until the Federal minimum wage increases, the game industry and retailers should think about selling more for less. Increase your audience, have loyal followers, make more money. Raising prices will only drive more people to eBay to buy stolen or used wares.
-Christina Bergschneider

No, increasing prices will increase software piracy. Only by lowering the prices can piracy be fought.
-Anonymous

$50 - $60 for a new video game that will roughly provide you nearly 100 hours of gameplay is in fact well worth it. Of course there is a price tagged with technology, but if you start raising a consumer norm like this - the end result will be piracy to a new level.
- David McGraw , Kansas State University

No! buyers already find too much incentive to pirate games because of the cost. Increasing prices can only encourage this behavior.
-Anonymous

No. I think the prices need to stay the same for the consumers benefit, and also I feel this might help our industry find better ways to manage our projects and finances to bring down costs and increase sales potential. Raising prices and having the consumer carry those cost burdens is the easy way around the financial issues.
-Jon Galloway, Rockstar Games

It doesn't need to increase as long as the videogame industry comes up with ways to be more efficient in terms of production. A price increase would take us one step further away from growing our audience.
-Carlo Delallana, Ubisoft

Do I expect the price to go up? Yes, slightly. But does it require the huge increase that all the publishers are pointing too. I seriously doubt it. In order to be successful in the next generation, companies will need to make use of tools that will reduce the production times greatly. It will need to be an era of smarter development. The idea of throwing 300 developers at the project to get it done is utterly ridiculous. If smart and efficient tools are evolved, then the content can be created without overly straining budgets. Will this stop publishers from raising the prices as much as they can? No. The publishers are taking advantage of the jump to next gen to pad their profit margins. There's no need to drastically up the price. But why not do it when you can and make a ton of money with it. That's just the way it goes. Too bad it sucks for everyone but the fat cat at the end of the receiving line of the cash flow.
-Anonymous

No. Although production costs continue to rise in the videogame industry, an increase in retail prices is not necessarily the answer. Costs also continue to rise in other similar entertainment mediums, such as motion pictures, music and television, however, these costs aren't necessarily passed on directly to the consumer. Average movie ticket prices have increased throughout the years, but not as dramatically as the revenue generated by these films. CD and DVD prices continue to fall, yet the music industry continues to generate billions of dollars in annual sales. Television production costs have increased dramatically per episode, on average, but execs have found creative ways to bring in new network dollars, either through product placement, banner ads or in-show endorsements. Maybe it's time the game industry does the same. As videogames are beginning to earn the same respect for their artistic creativity as other forms of entertainment, perhaps it's time for the gaming industry to be equally creative with its financing.
-Mark Mazure, Midnight Sun Entertainment Group

No, the designers and publishers need to find a way to either eliminate some of the over the top costs or at least minimize this and pass this savings on to the consumer. They invest in development time for the latest and greatest new graphic look and neglect the storyline and playability of their games. Hopefully they will soon realize that players want better playing and interesting games, not the latest bump map or animation process.
-Eric Tomlinson, ImagiNet Games

No, and for the simple reason that advertising in games has the potential to actually lower the price for next-gen games. Now this is a subject of some debate, but I think in-game advertising can be done in a manner that gamers will not resent. In Enter the Matrix, it was done very poorly and we all noticed. Placing Powerade machines at random throughout levels is not the way to go, but imagine if it was done it a way to add realism to a game. Many racing games already have it in place. The cars themselves are ads, but the levels have banners, billboards and various other forms of advertising in them. Now imagine this in other genres. If you are playing the next GTA and you drive by a billboard for Axe deodorant you won't deem it out of place. It seems logical in a world simulating reality. What about in Madden 2006 if the stadiums had Budweiser logos on them. This adds even greater realism to the game and it does it in a way that can generate revenue and keep gamers happy. I believe that this is something advertisers will jump on. If we stay with the Madden reference imagine 3 or 4 million gamers playing at least 20 games of Madden that is 60-80 million times the Budweiser logo is seen and that is a conservative estimate. If game designers are smart about the way they use in game advertising there is no reason next gen games can't cost less than they currently do.
-David Owen Jr.

No. I think that alternative sources of revenue should be looked into. Advertising in games is the biggest and best example of this. Use this revenue to offset the increased development costs.
- Elijah Sears , U.S. Army

Increasing prices would, in my opinion, result in a narrowing of the overall games market and looking at how few titles share the majority of revenues today it would only mean that there is a smaller pie to share in the next generation round. Something must give, however, when compared to today's price structure. The general opinion is that next-gen development will be more expensive than developing for current platforms. If that is the case, then we need to increase the retail price of next-gen games or someone along the chain from developer to end-customer needs to lower their margin. Either that or we need to look at additional revenue streams to cover the development costs. People keep comparing game prices to movie ticket prices or DVD prices and looking at that you can say that game prices are quite high. You must keep in mind though, that more often than not the movies have a few more revenue stages than games: box-office, pay-tv, cable, broadcast sales, corporate sales, rental, and retail sales. Games only have rental and retail sales. Maybe something could change?
-Soeren Lund, Deadline Games

The game market isn't growing fast enough to support the current revenue per unit sold, compared to the expected increase in game budgets. So, extra money is going to have to come from somewhere. It might involve a price increase at retail. It might involve in-game advertising, or some other alternate revenue stream. Or it will show up with game budgets that aren't as high as projected. Or, the companies that try to make ultra-big-budget games will lose their shirts and be a lesson to the rest of us...
-Ian Schreiber, Cyberlore Studios, Inc.

Retail prices for new releases are at the optimum level. Any rise in the Day 1 cost is unsustainable due to the current uncertain quality of most new titles. To demand higher prices we must guarantee better value - something that we are losing sight of as an industry...
-Charlie Kay, Egghead Interactive

No - to take an analogy from another creative industry, film, consumers aren't expected to pay more to see or buy big budget movies. While next-gen provides the potential for extremely expensive productions, it is by no means a requirement that next-gen games cost more to develop than current titles. If the publishers want to spend mega-bucks, then they better ensure the product sells well enough to make a return. I think the current price point is about as much as consumers would be willing to fork out - any higher and a single game will begin to near the cost of the hardware for some platforms.
-Anonymous

No, I think they are already at the high end of what I would pay. Development costs may be high but increasing the price will just reduce the number sold. The divide between the film industry and games is closing opening up a whole new revenue stream. I have a 9-year-old, who I buy games for and at around $50 for a PS2/Gamecube game, that's more than enough for me.
-James MacDonald, Ceon Corp

No. Next-Gen games ought to file in where the present game price range is. I think the present price closely reflects what gamers, and most importantly, what parents of gamers are willing to pay for this part of their entertainment activities.
-Anonymous

As development costs continue to rise, increasing prices would seem like a natural move, but I am not in favor of it. I and poor college students like myself can barely afford 2 or 3 new games per year as it is, let alone be able to handle an increase in prices. I think sales would suffer if prices were increased
-Jason Frederick , University of Baltimore

Might be feasible in the US and certain other markets - but for countries like Norway , where the SRP is 95+ USD for current generation games (with Platinum titles coming in at around 45 USD), it will be extremely hard to lift it higher.
-Atle Brandt, Friske Innspill

It would be preferable that they remain at the typical launch price. Nintendo managed to make hardware that was nearly as powerful as the Xbox, but lost no money on each console at launch, and I would think they could do it again, without a significant price hike. I hope the other console makers would follow suit, and work on lowering cost.
-Wes Davis, Skycom

No... but I also don't think they should be reduced in price, I think they're fine as they are. I play an awful lot of games - partly through work and partly because I just love them - and have done for the past fifteen or so years. People seem to forget that games for the Sega Megadrive and the SNES were pretty much the same price games are now. All of the games I got for the Megadrive were in the same price bracket as current Xbox/PC Games. Actually, taking into account the fact that prices were very similar so long ago, we're basically getting a better deal now then we ever were since there is so much more disposable income nowadays.
-Anonymous

No, not really. I know the companies are trying to increase their profit margins, especially with the escalating cost of developing a game nowadays; however, it seems obvious that the better games are doing well. Rather than increase their quality of work and try to increase sales through that means, they figure to raise prices from the start. I think that may cause most people to adopt the "wait until the price drop" purchase strategy. If the prices do indeed rise on new games, I know I myself will be doing that.
-Anonymous

No. Next generation games need to be distributed in more ways than just shipping them off to Wal-Mart. Online ordering, downloads, copy a friend's and then buy a key online directly from the game creator, etc. But a higher price? No way.
-Anonymous

Consumer expectations will play a big part in retail pricing. Just what kind of experience can these new machines provide? I've heard comments from gamers expecting full cut-scene quality graphics running in live game play! If this is the case, a price increase may be justified, but if the consoles fail to live up to consumer expectation then retailers would have hard a time justifying a price increase. Can't wait to see it all play out!
-Anonymous

Absolutely not! Why not? As an avid gamer, animation graduate student, average Joe - I'll tell you that games are overpriced as it is. The fact is I don't believe many games are worth buying. Why spend all that money on something I can finish in a week or less (on average) and has little or no replay value? There are exceptions like some sports games and maybe GTA. I don't actually purchase many games now - only rent. If game prices continue to go up, I may never buy a game again.
-Anonymous

No. I think it is already tough enough with all the high quality games coming out to keep up with playing all the titles you want to. The already pretty steep price of $50.00 a pop for new games is high enough to stop people from purchasing many of the games they would like to. I believe higher prices have a potential to decrease profits because it would force people to buy less titles.
-David Benedek

No. Next-gen tools should allow the development cycle to remain about the same as it is now, which should keep costs down.
-Jim Perry, SAIC

The retail price for games do not need to change for next generation console games. I believe that the prices are currently too expensive with this generation of games for all platforms. I do understand that the cost of production has increased over the years, but the industry would cause more harm than good in increasing prices beyond $50(US). People would find it much more difficult to purchase games at the release price, say $60(US), and would be more willing to wait until the price drops to a more reasonable price. I rarely purchase a game at the new price because I know that the price will drop in a few months or so. Studio's need to find ways to produce more effectively to reduce production cost. I believe that industry standard solutions will eventually lead developers to seek engine manufacturers such as Epic Games (Unreal Engine 3) to produce software that will reduce cost and output high quality work. If the cost of software increases with the hardware, then I and many people will choose to leave console gaming.
-David Shepherd, Deltak edu

Yes. But I think prices will be better managed by developers by out-sourcing more and more specialty tools. We may also see a decreased reliance on the developer's ability to "reinvent wheels" every time they develop a game from the ground up. To combat inevitable rising prices of development, there will be greater proliferation of engine technology and portability.
-Ryan FitzGerald, Nihilonaut Productions

As a game developer, YES. As a game player, NEVER. OMG… What a dilemma.
-Tunca Tunc, Havelsan

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