Jimquisition: Videogames Are A Luxury

[bjj hero]

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.

Really? I think Sober Thal has a point when he said:

Spoiler

Plenty of great games exist cheaper than the newest AAA titles.

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.

I still think game prices are reasonable, and I expect them to rise in the next 5 years. I hope they will be worth it. Or perhaps... dare I say it... we have to wait until the game goes down in price before we buy them?!? OMG!!

Ive been gaming for nearly 30 years and games are far more affordable now. In the early 90s new games were £60 when it was 10p to play the arcade and I thought I would buy my first home for £20,000. Now they are £45 (and come down quickly if you are not 12 years old and can be patient enough to wait past release date), its £1 to play the arcade and most first houses are bought for around £120,000. £60 in 1990 would be around £120 today so games are far more affordable now. You got 1-2 games a year and played the shit out of them as no new games were coming for a while.

Before I started a family and had lots of disposable income I bought plenty of games release day. Now I have a wife, child, mortgage etc. As well as having less time to game I have more bills and other "luxuries" I choose over games. I now buy 1-2 launch titles but for single player games Im happy to wait a few months for the price to drop. £25-£15 is fine for that sort of romp. I picked up Lost Odyssey last month for £2. Its not on release date but Im still enjoying it. I frequent GOG, older titles and only buy the triple A launch titles I really want. I dont feel discriminated against or hard done too.

So are games too expensive? I'd argue no as they are still selling well (1 set of sales figures doesn't change that, I'll be gob smacked if the new COD fails to sell) and there is a variety of prices out there. F2P, GOG, bargain bin, 6 month old titles, indie games, steam, second hand, and of course the AAA launch titles everyone moans about. Something for everyone so people should stop complaining like their food rations are being cut.

If they were too expensive they would stop selling, publishers would drop the price or go broke. COD is worth the money as it more than makes its money back. I could have chosen any number of titles but COD seems to be the big one. $60 pricing will stay as long as its profitable.

People will take your points more seriously if you make solid arguments rather than attacking fellow posters. How were you furthering discussion on this thread?

 

[mfeff]

If budgets keep rising the way the gaming industry is just to look like a pack of wolves fighting over a carcass. People aren't magically generating more and more money out of nowhere over time and they're going to have to face up to that eventually.

-snip

Publishers don't care about selling more copies later though, they want to make all their sales in the first week, make a shit-ton of money and then have it forgotten about. A high price stops that plan dead in it's tracks.

Not to mention that each person who can't afford a $60 game is another person who isn't telling his friends about this awesome game he found.

There is certainly a push for the first 48-72 hour sell through. As it was my experience when I worked in distribution in the "games industry" years ago. To anecdote when I was offered a store that was "floundering" I modified some of the price structures as well as the policy of the store. The store was earning around 330,000-350,000 U.S. a year when I took it over.

In a year I had it up to 1.6 million. The issue became one of replication in the retail chain. What your saying rings true as to the resistance to change and short shortsightedness that I encountered throughout the U.S. game industry. This store was in a very "urban" environment. My success here earned me the nickname "prince of the ghetto". Let that sink in for a minute as to how much these "people" opinion the lower class.

The push is more on the retail side rather than the publisher side anyways. Retailers purchase in bulk and often do not want to be "storing for fun", hundreds of thousands, or even millions of copies of a product. It cost "something" just to have them on pallets.

Mass Effect 3 sold three million copies! Break out the champaign!

Well not exactly, 3 million units are being stored at the retailer. That number is coupled with the direct download sales, again without the numbers it's difficult to tell what has actually sold until the earnings reports come out. That said, ME3 was expected to hit the 5 million mark... good luck with that.

I mention this to further illustrate and clarify "marketing people couldn't find their ass with both hands and a map".

So let's look at what you just said.

Budgets. Not really sure if you mean game development budgets or personal budgets that show a reduction to the amount of fluid spendable money towards the purchase of entertainment.

Games, in an arms race to achieve a certain look and animation quality have certainly increased the cost to make. Most of that cost is from attempting to compress the creation time to bring the product to market faster. Not really so much that "it cost more to make games". That is a pretty meaningless statement without a reason as to why it went up. I have shown time... and time... and time again... that content creation cost have gone DOWN, not up per unit of creation widget.

Game "budgets" are semantically tied into marketing budgets. That being said, since 2004 to 2008 the game industry doubled it's advertising budget. From 2008 to 2012 it tripled it AGAIN on the previous double. This is exponential spending on advertising and accounts for most of what a game "cost" to make. A huge portion of the price of a AAA game is the purchaser subsidizing the advertising cost of the thing he just bought. Reflect on this in a moment of contemplation.

Diablo III adds on every web site? SWToR adds on T.V.?

Now if cost of creation becomes more or less a fixed, and it is headed that way, the target pool is approximately known, then it is simply a derivative of the unit per unit sale per unit profit margin. That is to say, earn 20 percent above cost, 30 percent? It helps to know where one wants to be. Clearly one wants to be on the highest possible point of the curve.

Audience budget. Maybe it has gone down, maybe it has gone up. That there has been a downturn in sales is not an indication that there is less disposable income towards the units purchase. It is a possible factor, but not necessarily THE factor.

Owners, statistically per console, typically buy 6-8 NEW titles during the entire cycle life of a system, and there are new games being released all the time, then it is plausible that it is competition, it is also plausible that cheaper games through digital download are offsetting the end user's time in such a case that he or she simply has no desire to purchase the new widget. To answer the question outside of "speculation land" one needs the data. That data is guarded, so anyone's guess is as good as any other.

This is one of the primary reasons of the "used games" debate.

Other factors: DLC - extending product life (offering a by-pass to used), sticking to a product - CoD, Battlefield are great examples of this (hence the pay to play garbage being tossed around), handhelds and micro transaction games - market saturation. Could go on... and on... and on....... it's pedantic.

So is it less money to blow? Are games to expensive? Maybe. Are there areas where cost could be streamlined in product creation? Most certainly... again, as it was and has been my experience the "games industry" is LOADED with slop and money waste. Those cost are reflected in the title.

So... let's see... don't care about selling copies later... ummm, yes they do. I have already detailed that above. It's retail chains that don't want to float boxes of shite with no home to go to. Clearly the publisher would love nothing more than to move another 1.5 million units to that retail chain.

That it is not built into the price structuring on the front it is probably right on. Though this simply reiterates my point... which I will mention again.

"marketing people couldn't find their ass with both hands and a map".

To reflect this again, is to say that as the price of content creation per widget in a compressed period of time becomes fixed, it is advantageous to continue to market the product one already has for whatever one may get for it unit such time that one has something else to sell.

When we see this not being done... you guessed it...

"marketing people couldn't find their ass with both hands and a map".

mention that each person... yadda yadda... right.

The key here is that (especially younger people) who "DO" have a copy of "the next best thing", DO have a copy and are telling everyone about it... thus this creates (ideally) a sense of urgency and "keeping up with the crowed" mentality. Leveraged greed is a beautiful thing. Slashing a price can negatively impact the impression of a titles "worth", thus pricing something high... cars are a great example, instill in the idiots mind that it is "actually" worth what the price tag says it's worth.

Constantly slashing prices to hit a market penetration rate to maximize the initial impact of sales "could" lead to a market crash.

Prices... as an honest opinion... they are going to go up, not down. Especially if these "so called" cost keep trending up. The cost increases will be bundled with plastic crap and the DLC kicked in... how generous. Then a middling product, (same thing just without the plastic crap toy and DLC), and then perhaps a stripped down version a little cheaper.

We can say this because it is already here. This is lunch break stuff... as I said... haven't even tickled the surface of "how and why" these things are done.

A wise man once told me... if you want to be rich, stop thinking like a poor person.

 

[PhantomEcho]

I already do without most games.

Games, in general, have had issues with abysmal quality and inflated prices for production starting back from the beginning of time. The problem has always been present, in some shape or form, since the Industry first became that... an industry.

As publishers began throwing more and more money at games, it became more and more necessary to offset their costs through pricing. Where before, they were simply making a killing, slowly their industry has become DEPENDENT upon these inflated prices simply to survive.

The reason for this is the same as the reason for the diminishing returns on investment for television shows, music, and movies: failure to adapt.

Media is failing to adapt to a world in which technology has vastly outstripped them in methods of distribution, methods of availability, and the ease of access.

And so they go through expensive, time-consuming measures to ensure their games don't get pirated. They spend tens of millions on advertising, on ENORMOUS teams of programmers and level designers, and flooding the airwaves with their product's name. They waste vast quantities of time and money fighting with bleeding-edge technology in order to compete with all the OTHER samey-lamey AAA-Titles on the market.

They push deadlines that are impossibly to meet, force developers to strip content and dumb-down systems for 'mass-market audiences', and then shovel their crap out the door to whoever's unfortunate enough to pay $60 for a steaming pile of shit.


But like Jim says... the days when people have that kind of money are coming to an end. Games aren't all that important to a person who has to choose between food and the next Call of Jurassic Chrono Halo Conquest. And if the Video Games industry wants to survive, it's going to have to adopt a pricing structure which DOES NOT write off huge portions of their customers.

This means either cutting down on the size of design teams assigned to a given project, reducing the amount of time and money invested into a single production, or some combination of both.

The current model cannot stand. It's failing, and it's only a matter of time before these major publishers begin to disappear... or change their business model.

 

[The White Hunter]

and Jim Sterling is an incredibly sexy man...

Oh shit I actually wrote that

and your avatar makes it even better

Pervy sage! xD

Jiraiya makes everything better.

 

[rembrandtqeinstein]

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.

Then you wait 6 months and the game goes on sale, or wait for steam xmas sale. Don't be a sucker and think about the most efficient use of your money.

 

[maninahat]

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.

 

[Zom-B]

There are so many things wrong with this video I don't even know where to start...

I agree, video games are expensive. You know what else is expensive that'd I'd really love to have? Gold. A shit load of gold. I think the price of gold should be brought down simply because a large amount of people like having things made of gold. It would make the overall sales of gold so much more! Don't even get me started on how many cool things you could do with gold if you had a large supply of it. Jewelry for days, my friends.

Do you start to see where it sounds a little ridiculous? games are expensive, yes, but that doesn't automatically mean the prices should drop. Can you give solid evidence that a less expensive product will provide more profit on a consistent basis within the industry, or is the reality more so that it'll sell more copies but have no real effect on the dividends? This is where your logic falls short, Mr. Sterling, in that you voice an opinion but have no real proof of the model.

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.

Then the example. Oh boy, the example! Games sales are down from last year? No shit Jim! MvC3, Portal 2, Mortal Kombat, Dragon Age 2, Crysis 2, Bulletstorm, Rift, DC Universe Online, Dead Space 2, Magicka & a Call of duty Map Pack. What have we had this year? Soul Caliber V, FFXIII-2, The Darkness 2, Kingdoms of Amalur: Reckoning, Mass Effect 3, Street Fighter x Tekken, Ninja Gaiden 3, Armored Core 5, Xenoblade Chronicles & Prototype 2. To me, this year's line-up isn't as bombastic. Yeah, they're solid games, but only three of those had a huge hype train. Even having less overall blockbuster titles, the games in 2011 were far more significant than the games in 2012 as an industry. Last year was just better, period. I would dare say it'll have better profit margins for quite a few years just because of the titles that came out throughout the entire year. Using 2011 as your benchmark is just idiotic. It was a perfect storm of AAA titles and nothing more.

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.

The last thing I found very ignorant was the complete overlook of the trends in other media. You know what else used to be expensive? Books, movies and music! A lot of things have gone down in cost because A) We've perfected the production of them over many, MANY decades -and- B) They've gone wholly digital as their main source of acquisition. I could be wrong in the latter point but I'm pretty sure the majority of consumers still get boxed copies of games, where as most consumers in other areas almost always get their products digitally. Movies are possibly the exception (though in five years that statement will probably be 100% true), then again, movie theaters provide the possible niche service to cover those costs. The problem with video games is that even though there are some digital services, the majority of copies are still in hard copy form. Look at a lot of wholly digital games, however. They almost always hit the black because they have little to no production costs. Lots of MMOs that run free-to-play that are mediocre at best run smoothly because of low production costs. I don't think going 100% digital will solve the problem we face with pricing, I'm just saying it'd help quite a bit and is probably the quickest solution to the growing costs of games.

Then again, we have the huge outcry of not owning our video games when they're digital, so apparently developers just can't win either way sometimes...

All in all, your episode -- and, in fact, the past few episodes -- had a questionable message and your sloppy presentation and lack of data just leaves me aghast and questioning whether your opinions are even grounded or if it's all just more sycophantic pandering to the public by another "internet celebrity".

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). 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.

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.

Feels more to me like you just have an axe to grind with Jim Sterling, didn't like this video and trotted out a bunch of half-baked comparisons and unresearched theories. Try again.

 

[Zom-B]

*anecdotal evidence snipped*

So are games too expensive? I'd argue no as they are still selling well (1 set of sales figures doesn't change that, I'll be gob smacked if the new COD fails to sell) and there is a variety of prices out there. F2P, GOG, bargain bin, 6 month old titles, indie games, steam, second hand, and of course the AAA launch titles everyone moans about. Something for everyone so people should stop complaining like their food rations are being cut.

If they were too expensive they would stop selling, publishers would drop the price or go broke. COD is worth the money as it more than makes its money back. I could have chosen any number of titles but COD seems to be the big one. $60 pricing will stay as long as its profitable.

People will take your points more seriously if you make solid arguments rather than attacking fellow posters. How were you furthering discussion on this thread?

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.

 

[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?