Next Gen Game Pricing

[Ganepark32]

So this seems to have become a hot button topic in various places in theast week or so with 2K's announcement that NBA 2K21 is going to be launching on both the PS5 and Xbox Series X with a $70/£64.99 price tag. A lot of people deeply unhappy about the price increase and the potential precedence this will set for next gen game prices, especially from the likes of 2K as well as EA and Activision with their games which contain heavy micro-transaction bases modes and mechanics.

I thought it see what the temperature of the room was here with regards to this topic.

Its something I suspected would happen for next gen, that game prices at retail would increase. It felt inevitable, especially with quite a few games heavily using other means to generate long term income to recoup costs of development and fund things going forward (as well as lining executives' pockets at some of the worst offenders), but also because of the rising costs involved in development. I'd at least been brainstorming my potential next gen purchases with the idea of games being £60 as standard, so the jump to £65 is a bit of a surprise. Looking in to things, however, and the RRP/MSRP for games at brick and mortar retail and online seems to have shifted upwards of the £49.99 price tag and in recent years, things like Fifa and Call of Duty have launched at £54.99 in stores (I know you can buy it cheaper online but the price point there seems to be shifting upwards as well). I wonder if this is part of the increased cost of game development or to potentially soften the blow of the heightened price tag for next gen games (the cynic in me thinks in some cases such as the games mentioned its simply to get as much money at point of sale as possible before additional revenue streams kick in).

It seems systematic that the industry as a whole wants to push forward with bigger and better things tech wise to potentially push the medium forward but that's obviously coming at the cost of development taking longer, requiring more resources and people and just generally needing more money. At a certain point, it may become unsustainable to keep pursuing along these lines because its going to cost too much in terms of money and people to get there and thats even with the potential for Unreal 5 to allow for some corners to be cut when using that engine.

I agree that game pricing needs to change but listening to Play, Watch, Listen at the weekend did make me consider that more variability in pricing could be a good way forward, though it would definitely lead to abuse by some developers who would still incorporate micro-transactions on top of increased prices. But generally, more variability in pricing structure would be beneficial at market for consumers and for developers/publishers in maximising units sales.

As an example, Bethesda has consistently released several single player titles in the holiday season over the last couple of years but in many cases, outside of Elder Scrolls and Fallout these have failed to take off in significant numbers at the standard $60/£50 price point. Significant price cuts in the weeks after release (sometimes 50%) has seen larger up take in sales for the likes of The Evil Within 2 and Dishonored 2 at discounted rates (though in both cases not enough to offset the poor launches they both bad). Perhaps in these instances, a lowered price point (say $50/£40) would have been more beneficial.

I go there because inevitably, with games increasing in price to $70/£65, more games will likely see poor sales and especially in the next year as fall out from the Covid-19 pandemic. Beyond that, who knows but gamers vote with their wallets and may find the price increase to next gen (on top of expensive consoles which may carry a £500+ price tag) too much to buy more than a handful of games. This of course would have knock on effect for whether publishers greenlight more niche projects that may end up carrying a full price tag.

So yes, while I agree that a price increase was needed for the top tier of games (Red Dead Redemption 2, The Last of Us Part 2 and Cyberpunk as example of games which have taken on huge costs of production, I do think more variability would and will be needed going into next gen for smaller titles to work. We've seen some instances where AA games like Vampyr and A Plague Tale have launched not at £50 but at around £40 and seen smaller games carry price tags anywhere from £20-£35 and its this variability which I think many will be hoping for with the higher price points later this year for next gen consoles.

Consumers will still pay the top price for games in some cases. More will likely wait for sales or be more savvy about ordering from places online to lessen the cost of next gen. But I hope we do see a larger wave of AA games that fill the gaps or publishers being willing to be daring to price things a little lower so sell more out of the gate and result in less studio closures going forward (something that could be exacerbated by heightened dev costs and a need to price higher at retail).

I've waffled on but generally, yeah game prices should go up (especially in the indie space where they really do undersell themselves often). But if you're going to market next gen with a game at these new higher price points and still using the excuse for funnel micro-transactions into then all NBA 2K21 (in just going off of his egregious they were reported to be in 2K20) then sod off really, though who am I kidding they'll still do it anyway.

What's everyone else's thoughts on the subject? OK with the increases coming your way? Will you be more savvy or wait for sales more often? And do you think devs should scale back somewhat and focus on giving a more fine tuned experience that doesn't break the bank for development costs that's then forwarded to the consumer?

[drahkon]

Don't even remember the last time I paid full price for a game (phyiscal AAA copies; digital indie games I sometimes pay full price day-one). Sure, prices will go up but with enough digging around you can get all games for less than RRP even on release day.

[Ronnie]

Great post.

To keep it simple, I'm fine with the price increase as long as there's a decrease in MTXs to go along with it. Gaming is cheaper than it's ever been these days, yet development costs have sky-rocketed. Something had to give as the status quo is unsustainable. 

And it's not just games being bargain basement prices after a couple of months, the RRP has stayed the same for generations, even though with inflation we should be at $75+ games by now. 

Nintendo are in a strong position with their games not going on sale till years later. That plays a big part in why they sell such huge numbers software wise.

Edited July 13, 2020 by Ronnie

[Will]

I’m fine with the increase, and it won’t change my buying habits at all. At the end of the day, consumers will dictate prices and the (perceived) better content will command higher prices. Prices will come down over time as they always have, with the worst-selling stuff dropping the fastest.

The RRP staying the same is a good thing to look at. While it’s clear that games would be much more expensive if they’d followed inflation we still have much more money being spent on them. This means people are playing more content, and the money is being split across a broader range of developers and publishers. One thing I fear with this change is that people will still have the same budget for games, it will just become allocated to fewer games, leading to a harder time for a lot of devs, while others enjoy the benefit of charging more.

Development costs are crazy high nowadays, so if you can’t be sure of sales it will be hard for a lot of companies to sign off AAA releases. It could lead to more companies focusing on mobile or other markets with lower barriers to entry.

 

[Ronnie]

7 minutes ago, will' said:

Development costs are crazy high nowadays, so if you can’t be sure of sales it will be hard for a lot of companies to sign off AAA releases. It could lead to more companies focusing on mobile or other markets with lower barriers to entry.

Or, a lot of AAA releases will just be sequels to previous properties because it's too risky to launch a new IP. It's what's happening in the film industry where everything nowadays is a sequel, a reboot, a live action remake, or a book/comic book adaptation.

[Cube]

I'm not bothered about the price at launch. I don't care much about multiplayer, so for a single player experience, it's better to just get the game at a later date.

The games are much cheaper, often with versions they include DLC, they've received many patches and bug fixes, too, along with any free content or features made after release. So even without the price difference, it seems better to wait.

[Will]

32 minutes ago, Ronnie said:

Or, a lot of AAA releases will just be sequels to previous properties because it's too risky to launch a new IP. It's what's happening in the film industry where everything nowadays is a sequel, a reboot, a live action remake, or a book/comic book adaptation.

I agree, companies will (and do!) try to create ‘franchizable’ content to ensure profitability. There aren’t huge savings in sequels on the cost front but profitability is definitely one step closer if you know the IP can create a hit at all. Of course, you also have the problem that you need a hit IP in the first place.

Edited July 13, 2020 by will'

[Sheikah]

My problem with the game price increase is twofold:

• Companies like 2K are earning a shitload of money from microtransactions (EA makes billions of dollars per year from microtransactions alone, more than they are making from game sales); these companies are making more profit than ever, and they won't stop doing microtransactions unless they're physically stopped (so it's not a case of "oh if they increase the game prices maybe they'll be less scummy in other areas" - shareholders want to make as much money as possible)
• Games are being sold to much bigger audiences these days compared to, say, back in the early 90s, and the rise of digital distribution will mean they are able to forego a lot of the costs of the old days (e.g. cartridges, packaging, distribution); put simply, they're seeing a lot more money come back to them for making a game than they would in the past.

My take on why they're increasing game prices (at least for companies like 2K) is because they can. People can accept the rationale that prices should increase over time, without thinking about whether direct comparisons to the "old days" are exactly appropriate. Certainly, for big companies like EA, they're making absolutely ridiculous amounts of money for almost no effort, to the point that they could even afford to give away FIFA for free.

Edited July 13, 2020 by Sheikah

[Ronnie]

4 minutes ago, Sheikah said:

Games are being sold to much bigger audiences these days compared to, say, back in the early 90s

And to counter-act that, there's 100x more games now than back in the 90s to make up for it.

They can and should increase prices, the model is unsustainable long term, especially as now devs are going to have to start designing 4K games.

[Sheikah]

2 minutes ago, Ronnie said:

And to counter-act that, there's 100x more games now than back in the 90s to make up for it.

What does that matter, if the games are generally selling more copies because they are far more interested people to sell to?

[Happenstance]

We'll have to see what happens when it comes to prices next gen. I thought they were pretty high this generation but as long as I shopped around beforehand I was usually happy with the price I paid. Hopefully it'll just be like that again.

[Sheikah]

1 hour ago, Happenstance said:

We'll have to see what happens when it comes to prices next gen. I thought they were pretty high this generation but as long as I shopped around beforehand I was usually happy with the price I paid. Hopefully it'll just be like that again.

This is the thing, even if the official RRP becomes 65 quid, a lot of people like myself will still just wait until the games are 15/20 quid, with a few exceptions (e.g. the occasional exceptional game). This is why the PS5 with the disc drive will be a must for me.

Mind you, this might not work out immediately (I remember PS4 games around launch took a while to reduce in price).

Edited July 13, 2020 by Sheikah

[Julius]

Yeah, the price increase doesn't bother me personally too much, and seems long overdue. I could see it being a tough sell for some others, though - most will round the £64.99 up to £70, at which case to most of the population that might as well be £100. Of course, this largely depends on this being stuck to, but I'm expecting online retailers to continue undercutting RRP's by £5 - £10 as they have been, even if not necessarily at console launch. 

What I'm much more interested by is the greater range of pricing we could see in the space below AAA tentpole releases, be it AA, A, or indie games, of all shapes and sizes. I would love to see more AAA releases akin to Lost Legacy and Spider-Man: Miles Morales in scale, hopefully this gives publishers more of an excuse to push for that. 

Of course I agree with the talk about big players like 2K, EA, and Activision. I know I won't pick up another FIFA at £64.99, seeing as I already hate it enough picking it up at half price nowadays. Very concerned to see how they handle this. 

This question was posed on the Easy Allies Podcast the other day, and I think it's a great one so I'll ask it here: would you be happy if Nintendo games - whenever the Switch successor releases - were to see an increase to this price too?

I think it's interesting because from my perspective I wouldn't at first, but then the main argument for the increase seems to relate to higher development costs as a result of games with higher fidelity models and resolutions, which I don't think would necessarily be something applicable to Nintendo, seeing as they push gameplay over graphics (something which I'm a fan of).

Not trying to start heated debates about console wars, I'm just genuinely curious how people would feel about the potential for a price increase there. 

Edited July 13, 2020 by Julius

[Ronnie]

25 minutes ago, Julius said:

This question was posed on the Easy Allies Podcast the other day, and I think it's a great one so I'll ask it here: would you be happy if Nintendo games - whenever the Switch successor releases - were to see an increase to this price too?

I think it's interesting because from my perspective I wouldn't at first, but then the main argument for the increase seems to relate to higher development costs as a result of games with higher fidelity models and resolutions, which I don't think would necessarily be something applicable to Nintendo, seeing as they push gameplay over graphics (something which I'm a fan of).

I think the fact that Nintendo keep their prices stable means they wouldn't need to increase prices for the same reasons as the big publishers. A lot of people will have bought Shadow of the Tomb Raider for £15 or £20 but everyone will be buying Paper Mario at £40-50.

[Ganepark32]

Two points I didn't mention but probably have some bearing on firstly, the reaction to the price increase; and secondly, how subscriptions services may mitigate some of the issues of increased cost for the consumer:

- I wonder if there would have been less of a reaction to the price increase if it hadn't been 2K announcing it with NBA 2K21. Last year's NBA 2K title was notoriously bad for its implementation of micro-transactions and its long been touted as a way for developers and publishers to bridge the gap between development costs and revenue generated at market. This increase is set as a way to offset the increased costs of development but its a guarantee that micro-transactions will still be there in game for this years title. And so I do wonder if say Sony or Microsoft had come out and given the price increase with their games (or even the likes of Square Enix or Bandai Namco) whether there would be as much uproar.

- One factor I didn't mention but bears significant weight is Gamepass on Xbox. While a lot of people are rightly eyeing up the PS5 because we know the first party games will be there, Gamepass has been an important service for Microsoft and somewhat of a game changer for their fortunes (not to the degree they'd ultimately like but its at least keeping them more in the conversation than prior to its conception). With Microsoft committing to putting all of their first party titles on the service for the immediate future (my feeling is that something like The Initiative's first game will probably be the point at which the cross gen accessibility of games across the Xbox ends towards the end of 2021/start of 2022) and with several exclusivity deals for games that will also grace the service, I wonder if this will increase the cachet of the Xbox Series X in light of games potentially being a standard $70/£64.99 and maybe even convince some to pick up the hardware. It could level the playing field but it will likely hinge on what their first party offerings are going to be like and whether they can maintain a high quality of third party offerings for next gen on the service. Still, if they do improve their first party titles, that reduces cost to consumer for game purchases to third party titles which at the new price could be a god send for smaller games looking for attention in what could become a difficult marketplace where money may be more constrained.

I'm interested to see how it will all play out anyway, especially in the broader sense of the industry. Will it push more AA development? Hopefully. Will it mean that developers of AAA focus on more refined and less bloated games? Hopefully to that too.

[Nicktendo]

30 minutes ago, Ganepark32 said:

I'm interested to see how it will all play out anyway, especially in the broader sense of the industry. Will it push more AA development? Hopefully. Will it mean that developers of AAA focus on more refined and less bloated games? Hopefully to that too.

I'll gladly pay more for a AAA game of high quality that is devoid of game-altering micro-transactions. Cosmetics don't bother me. Considering how much time I've put into the Nintendo big-hitters like Zelda, Mario Odyssey or Splatoon, I think a higher price is justified. I'd also hold a similar position with Sony and MS first party exclusives, or multi-plat smash hits like RDR2 and GTAV. 

Something I mentioned on our podcast recently and want to iterate here though is that I draw the line at ports and "B-tier" or AA games, however you want to label them. I am not prepared to drop and extra tenner on a remake / remaster of an old game or something like a Yoshi or a Kirby title. While I DO enjoy those titles, they very rarely push the boundaries that games in the AAA space do. 

I do think the industry would be in a healthier place overall if there was a bit more delineation or distinction in tiers between bigger and smaller budget games in the console space. A Yoshi game built on Unreal Engine 4, in my view, does not justify the same investment from the consumer that a new Zelda game 5-years-in-development and built on a custom engine from the ground up does. The investment and money put into these two products is not equal, nor is the amount of gameplay one could realistically expect from them, and therefore, I don't see why the end-user should be faced with an equal pricing choice when it comes to buying.

I'd be happy with a bump in game prices at the high-budget end if a space opened up for the so-called AA games that were much more common on the PS2/XB/GC generation. I'd happily drop 30-40 quid on a game that tried something new, was more focused or was even a little rough around the edges compared to a AAA game. I guess we kind of have that in the indie space, which I think is great, but there is still room to deliver on that b-tier market that used to thrive a decade or two ago.

 

[Sheikah]

I think the fact that Nintendo keep their prices stable means they wouldn't need to increase prices for the same reasons as the big publishers. A lot of people will have bought Shadow of the Tomb Raider for £15 or £20 but everyone will be buying Paper Mario at £40-50.

If it's anything like Super Paper Mario on Wii I wouldn't be happy paying even £5 for it.

[Jonnas]

Considering general inflation, I'm surprised this hasn't happened sooner. Regarding Nintendo, I feel the same, if they increase price alongside industry standards, so be it (and looking at the RRP for BOTW, I think they already did so this generation). My buying habits wouldn't change much.

But hey, if the price increase means the "tiers" for games get better delineated, all the better. Digital stores already have little trouble pricing a game 30, or 15, or 10 Euros when need be, it's time physical stores caught up (for new games, I mean. They'll just set whatever for used).

[Happenstance]

To be honest for me, Nintendo prices staying so high just tends to mean I don’t buy many Nintendo games anymore.

[Ike]

If it means that it ends day one downloads, features removed to be sold as DLC and crunch (unlikely) then so be it. Aiming for 4K must be very difficult to do and I think as games get more complicated then it's a lot more work.

At least with Nintendo games, you can buy 99% off games without having to worry about the game dropping to £18 a week after launch (those where some good times the tail end of the PS3/Xbox 360 for consumers, probably not the publishers though).

[Grazza]

I'm less and less interested in AAA games, even Nintendo ones.  For me, games just don't need to be as big and complicated as they've become, and as such I don't feel the need for enormous budgets.  I'm loving Animal Crossing and am somewhat interested in Breath of the Wild 2, but am not interested enough in Paper Mario to pay a lot of money for it.  We live in a time when you can always download something new and cool for £10-20.  For me the most exciting release of the year was Streets of Rage 4, because it was a simple game done well, and I can't really think of a more exciting prospect than LizardCube taking on Golden Axe.

[Goafer]

If games end up being £65, that's me pretty much out of day one purchases for all but the absolutely must have titles. To put that into perspective, there are currently only 4 PS4 games on my shelf that I would have even considered buying for £65 (FF7R, GTAV, Persona 5 and RDR2).

Gaming is a luxury to me, so with a mortgage and countless other bills to pay, £65 is just too much for something that I might end up not liking or finish in 10 hours. Add into the mix that I'm generally getting more selective anyway, it just means I have very little incentive to spend that much at launch.

I may even opt out of day one purchases completely and wait for reviews and public opinion. I've previously had franchises that are safe bets, but could you imagine if you'd payed £65 for Mass Effect Andromeda or Fallout 76 based on the strength of the franchise? I think I'll be much more wary from now on.

Edited July 14, 2020 by Goafer

[Dcubed]

Next Gen is gonna get off to a horrendously slow start...

£500/600+ consoles? £65+ games with £££+++ micro transactions!?

Yeah, I’m good thanks.  I’ll wait.

[Glen-i]

The fact that it's EA testing this price point means I don't buy for one second that they'll hold back on the microtransactions because of it.

It's EA.