The Markets of Video Game Pricing - Day 1 full retail, or wait for a drop?

[Ronnie]

16 minutes ago, Sheikah said:

"You don't know that" - so you're saying that if, say, 80% of the sales were made when it was reduced, those people would have in fact paid full price if they never dropped the price? I think we can be very sure that the game wouldn't have sold as many copies if it never got reduced, so this guy is wishful thinking.

This isn't the kind of game that people were crying out for, it's the sort of game people took a chance on when it got cheap. If they never reduced the price many people would simply have never have bought it, as they don't value it as a £60 game. That's just the reality of it.

Your seem to be suggesting that the main reason it didn't do well at launch was because nearly everyone just plays the waiting game for a discount. But time and time again we see games like Ghost of Tsushima do well at launch. You can't just dismiss all the examples as 'outliers'. People will pay for the game at launch if they value what is on offer.

You are also suggesting all AAA games are treated equally - people will pay top dollar for games like BOTW at launch, the same can't be said for this.

God of War saw big price drops weeks after release and that was a GOTY winner. Same with Doom Eternal, which is now practically being given away. If what you say is true then those shouldn't have happened.

But it does happen precisely because publishers train people to hang on for a few weeks/months and the price will tumble. This forum is full of people saying they'll wait for a price drop they know is coming. It happens all the time, and it's something Nintendo have resisted for that very reason. If slashing prices = more profit in the long term they would have done it. But with Nintendo people have been similarly trained, only to expect the opposite. No price collapses = buy a game at launch + huge software sales. That's all their games, not just the critically acclaimed ones like BOTW.

Anyway at this point we're going round in circles.

Edited April 21, 2021 by Ronnie

[Sheikah]

13 minutes ago, Ronnie said:

God of War saw big price drops weeks after release and that was a GOTY winner. Same with Doom Eternal, which is now practically being given away. If what you say is true then those shouldn't have happened.

But it does happen precisely because publishers train people to hang on for a few weeks/months and the price will tumble. This forum is full of people saying they'll wait for a price drop they know is coming. It happens all the time, and it's something Nintendo have resisted for that very reason. If slashing prices = more profit in the long term they would have done it. But with Nintendo people have been similarly trained, only to expect the opposite. No price collapses = buy a game at launch + huge software sales. That's all their games, not just the critically acclaimed ones like BOTW.

Anyway at this point we're going round in circles.

God of War sold 5 million copies in 1 month at full price. It sold 10 million copies by May 2019. The lesson is that if it's a great game, people value it highly and will pay the asking price.

In actual fact, once it started being heavily discounted, loads of people had already paid full price for it. So in terms of what you're saying, that people mostly just wait for the price drop, I'd argue that people are more likely to wait for less critically revered games that they aren't so sure about, or are buggy. And that feels perfectly acceptable to me.

Also you say "if slashing prices = more profit in the long term (for Nintendo), they would have done it". But couldn't you argue the reverse for Sony - if maintaining the price at 60 pounds forever would have meant more profit for them, they would have done it? Could it be that both strategies have merit and suit different companies who ultimately have different brands, expectations, and amibitons?

Edited April 21, 2021 by Sheikah

[Ronnie]

1 minute ago, Sheikah said:

God of War sold 5 million copies in 1 month at full price. It sold 10 million copies by May 2019. The lesson is that if it's a great game, people value it highly and will pay the asking price.

Great. Now what about Doom Eternal? Or Assassin's Creed Odyssey? That was being sold at half price (or less) 4 months later.

4 minutes ago, Sheikah said:

But couldn't you argue the reverse for Sony - if maintaining the price at 60 pounds forever would have meant more profit for them, they would have done it?

Nintendo have always done it. Gamers have been trained to never expect price cuts. The opposite is true of Sony, they can't suddenly course correct, it's too late for that. Now that Sony are revered for their first party software I'm sure they WISHED they were in a position to never discount, but sadly...

And all this talk about £60 or £70 games is disingenuous, as if that's been the price for years. 70 is a recent thing, on the console own's digital stores. Days Gone was £45 at retail at release. That's the price the Director is asking people to pay. If you don't think a big openworld game with dozens of hours of content is worth 45 quid then there's no point carrying on. It's not a question of individual quality of that one title, I'm talking about the AAA industry as a whole. Hopefully retail prices will adjust soon enough because £70 games at places like Amazon I agree is too much, but that's a separate conversation.

[Cube]

21 minutes ago, Sheikah said:

 

Also you say "if slashing prices = more profit in the long term (for Nintendo), they would have done it". 

They used to do it. Players Selects was a thing, games reprinted at a £20 price, the Wii U didn't sell enough to warrant the range and the Switch is more for digital sales.

[Sheikah]

30 minutes ago, Ronnie said:

Great. Now what about Doom Eternal? Or Assassin's Creed Odyssey? That was being sold at half price (or less) 4 months later.

AC Odyssey sold many millions in less than 1 year, before receiving substantial price cuts. Doom Eternal sold 3 million copies in a week, 3 times that of Doom 2016. How, though, didn't people remember their training?!

Quote

Nintendo have always done it. Gamers have been trained to never expect price cuts. The opposite is true of Sony, they can't suddenly course correct, it's too late for that. Now that Sony are revered for their first party software I'm sure they WISHED they were in a position to never discount, but sadly...

Very doubtful. As I showed further up, GoW sold gangbusters early on, before reductions came in. It's not like nobody picked it up until it got discounted. This idea that Sony are losing profit because they reduce their games after a time is based on what exactly?

Quote

And all this talk about £60 or £70 games is disingenuous, as if that's been the price for years. 70 is a recent thing, on the console own's digital stores. Days Gone was £45 at retail at release. That's the price the Director is asking people to pay. If you don't think a big openworld game with dozens of hours of content is worth 45 quid then there's no point carrying on. It's not a question of individual quality of that one title, I'm talking about the AAA industry as a whole. Hopefully retail prices will adjust soon enough because £70 games at places like Amazon I agree is too much, but that's a separate conversation.

Why are you equating cost with number of hours of gameplay? That's a really strange and unhelpful way to assess games. I'm far more likely to decide whether I want to buy at launch based on whether the game is very good, and whether there's bugs. Really, really strange logic!

Also the director was asking people to pay full price, which is (officially) 60 quid. Let's not change the narrative here.

Edited April 21, 2021 by Sheikah

[Ronnie]

1 hour ago, Sheikah said:

AC Odyssey sold many millions in less than 1 year, before receiving substantial price cuts.

It was half price 4 months after release. And kept falling. It's one of the most popular game series in the world, of course it sold at release.

1 hour ago, Sheikah said:

It's not like nobody picked it up until it got discounted

No one suggested this, that would be stupid. Of course games sell at release.

1 hour ago, Sheikah said:

This idea that Sony are losing profit because they reduce their games after a time is based on what exactly?

Common sense? Luigi's Mansion 3 sold 10 million copies, all of which were at full price. Horizon and God of War sold 10 and 12 million, a chunk of which came from slashed prices.

1 hour ago, Sheikah said:

Why are you equating cost with number of hours of gameplay? That's a really strange and unhelpful way to assess games.

Erm, says the man who's equating cost with game genre a bit further up? 

1 hour ago, Sheikah said:

I'm far more likely to decide whether I want to buy at launch based on whether the game is very good, and whether there's bugs.

Well, obviously. 

1 hour ago, Sheikah said:

Let's not change the narrative here.

Nice of you to say after you've been doing just that this whole time. This has never been a topic about personal subjective choices whether to buy a game or not, it was about objective game worth and devaluing of the industry.

I'm out, thanks for the discussion. We won't agree as usual.

Edited April 21, 2021 by Ronnie

[Rummy]

MOD POST/NOTE:

This post isn't really part of the thread. I used it for a placeholder as this thread has been thripped out of General Switch to here. Please continue to discuss!

[Cube]

1 hour ago, Ronnie said:

Common sense? Luigi's Mansion 3 sold 10 million copies, all of which were at full price. Horizon and God of War sold 10 and 12 million, a chunk of which came from slashed prices.

 

My copy of Luigi's Mansion 3 wasn't full price...my only full price Switch game was Ring Fit Adventure.

[Sheikah]

Common sense? Luigi's Mansion 3 sold 10 million copies, all of which were at full price. Horizon and God of War sold 10 and 12 million, a chunk of which came from slashed prices.

This comparison doesn't actually prove anything, not really sure what you're trying to say.

You don't know how many copies God of War would have sold had it never got a price reduction. It could have made far less profit overall by not having a price cut, for all you know it might have only sold 7 million copies.

How does Luigi's Mansion selling 10 million copies have anything to do with God of War?

Edited April 21, 2021 by Sheikah

[Dcubed]

7 hours ago, Cube said:

They used to do it. Players Selects was a thing, games reprinted at a £20 price, the Wii U didn't sell enough to warrant the range and the Switch is more for digital sales.

Actually, it did get a Nintendo Selects range towards the end of its life!

Switch will most likely also get its own Nintendo Selects range as the current Switch nears its end.

Nintendo's strategy is clear.  No major discounts beyond the typical occasional 30% until the Nintendo Selects/Players Choice range comes along.  The reason why they can "get away" with this pricing strategy is because they doggedly stick to it and continue to resist the urge to bomba price drop their games; even when they don't sell all that well.

There's nothing stopping other developers/publishers from running a similar strategy; they just need to have enough confidence & faith in their own products to resist the industry status quo Race To The Bottom pricing model.  There are examples of other developers/publishers pulling this off, even in modern times.  Nintendo is not some special snowflake who have exclusive magic powers; they just have enough confidence in their products to not price collapse them weeks after launch.  It really isn't complicated.

Edited April 21, 2021 by Dcubed

[Goafer]

Weird how people are against price reductions, but also see Game Pass as fantastic value. 

Theres no way games on Game Pass are getting full price for every download through it.

[Sheikah]

Actually, it did get a Nintendo Selects range towards the end of its life!
Switch will most likely also get its own Nintendo Selects range as the current Switch nears its end.
Nintendo's strategy is clear.  No major discounts beyond the typical occasional 30% until the Nintendo Selects/Players Choice range comes along.  The reason why they can "get away" with this pricing strategy is because they doggedly stick to it and continue to resist the urge to bomba price drop their games; even when they don't sell all that well.
There's nothing stopping other developers/publishers from running a similar strategy; they just need to have enough confidence & faith in their own products to resist the industry status quo Race To The Bottom pricing model.  There are examples of other developers/publishers pulling this off, even in modern times.  Nintendo is not some special snowflake who have exclusive magic powers; they just have enough confidence in their products to not price collapse them weeks after launch.  It really isn't complicated.

And what about games like FIFA? They should stay at £60 for a few years, even when the next one comes out every year?

As I said...Nintendo's strategy does not make sense for everyone. And there's no proof it's the best strategy, you might sell more copies by reducing the price and make more profit overall.

[Jonnas]

30 minutes ago, Sheikah said:

And what about games like FIFA? They should stay at £60 for a few years, even when the next one comes out every year?

That's a developer and a franchise that cares not for clout, status, nor long-term profits for each individual game. It's one of those cases where permanent price reduction makes sense: because they don't care to obsolete or saturate the brand, and they're releasing a new one at full price anyway.

But with franchises like God of War or Doom, this shouldn't be happening. They don't get yearly releases, and both developer and publisher care about them being seen as high quality, well-critiqued games. Lowering the price so easily for those games only lowers the perceived value of those brands, so it's counter productive.

11 hours ago, Sheikah said:

God of War sold 5 million copies in 1 month at full price. It sold 10 million copies by May 2019. The lesson is that if it's a great game, people value it highly and will pay the asking price.
[...]
Meanwhile Witcher 3 sold 4 million copies at full price in the first 2 weeks. This shows a lot of people will pay full price, but only if they think it's worth it.
[...]
But time and time again we see games like Ghost of Tsushima do well at launch .

One thing I'd like to add to this point... it's not that the quality of the game brings the sales, rather, the hype (marketing) does. A well reviewed game helps bring hype for sure, but so do a lot of other factors. Two games with the same hype, but differing quality by the end (let's say, one's a 7, the other's a 10) will likely sell the same thing at launch regardless.

Something I heard frequently before: how well any of the Assassin's Creed games do depends entirely on the quality of the previous one. In other words, a good game doesn't necessarily bring a good launch for itself, it only guarantees a strong launch for its sequel.

9 hours ago, Ronnie said:

God of War saw big price drops weeks after release and that was a GOTY winner. Same with Doom Eternal, which is now practically being given away. If what you say is true then those shouldn't have happened.

But it does happen precisely because publishers train people to hang on for a few weeks/months and the price will tumble. This forum is full of people saying they'll wait for a price drop they know is coming. It happens all the time

I know I'm being pedantic, but the price of those two games wasn't reduced because gamers were trained to expect reductions. The reduction IS the training. if a game as big and lauded as God of War got its price cut so soon, then anything will.

57 minutes ago, Goafer said:

Weird how people are against price reductions, but also see Game Pass as fantastic value. 

Theres no way games on Game Pass are getting full price for every download through it.

I'm not an Xbox owner, but the concept behind the Game Pass is fascinating. I have wondered several times in the past if this is actually worth it for the developers, because... how much of a cut are they getting, and what does it depend on? Same thing for the NES&SNES online service on the Switch, are the 3rd party developers/publishers that agreed to have their games on there actually making any money with that?

Since the service is relatively new, I don't expect to hear the answer that soon, but I'm expecting that, sometime in the future, we'll hear stories from developers who regretted including their games on Game Pass. With so many parties involved, I'd be surprised if nobody feels shortchanged in the process.

[Sheikah]

1 hour ago, Jonnas said:

But with franchises like God of War or Doom, this shouldn't be happening. They don't get yearly releases, and both developer and publisher care about them being seen as high quality, well-critiqued games. Lowering the price so easily for those games only lowers the perceived value of those brands, so it's counter productive.

This point keeps getting raised but nobody has any proof that holding your game's price at £60 for years is the absolute correct thing to do. I realise we can't really prove it, but let's consider the alternative.

For all we know, reducing the price after 4/6/8 months helps bring in new customers, keep your game in the public eye, sell extra copies you otherwise wouldn't have, and ultimately make more profit than you otherwise would've if you didn't lower the price.

I also mentioned before that games like God of War aren't made to make maximum possible profit (which is why they don't have microtransactions); they are system sellers. So reducing the price to sell more copies (and therefore consoles) might be their aim. So saying "they shouldn't be lowering the price" isn't necessarily true for those sorts of exclusives.

I am of the opinion that a lot of people wouldn't buy nearly as many games if they were all priced at RRP, it's not a simple solution that publishers should just hold their prices.

Edited April 21, 2021 by Sheikah

[Jonnas]

23 minutes ago, Sheikah said:

For all we know, reducing the price after 6 months helps bring in new customers, keep your game in the public eye, sell extra copies you otherwise wouldn't have, and ultimately make more profit than you otherwise would've if you didn't lower the price.

I also mentioned before that games like God of War aren't made to make maximum possible profit (which is why they don't have microtransactions); they are system sellers. So reducing the price to sell more copies (and therefore consoles) might be their aim. So saying "they shouldn't be lowering the price" isn't necessarily true for those sorts of exclusives.

The bolded parts are contradictory. A permanent price change to sell a few extra copies before the first year is over goes against the idea that God of War isn't made to maximise short-term profit. And that's exactly why I criticise that move.

And regarding it being a system seller... what you're describing sounds like a bundle. Or rather, a roundabout way of having a bundle. I'd imagine, if the intention was to sell systems like that, they'd just do a bundle, no need to lower the price for every possible sale.

Edited April 21, 2021 by Jonnas

[Sheikah]

30 minutes ago, Jonnas said:

The bolded part is contradictory. A permanent price change to sell a few extra copies before the first year is over goes against the idea that God of War isn't made to maximise short-term profit. And that's exactly why I criticise that move.

And regarding it being a system seller... what you're describing sounds like a bundle. Or rather, a roundabout way of having a bundle. I'd imagine, if the intention was to sell systems like that, they'd just do a bundle, no need to lower the price for every possible sale.

I wouldn't say it's contradictory. Sony could have put in microtransactions and released DLC if profit was their only concern. They left money on the table in this regard which suggests money was not the only focus. 

That's not to say profit isn't a concern at all. Of course it is. Which might explain why they reduced its price accordingly, to ultimately increase end profit in the manner I suggested. I strongly believe that keeping the game price at £60 the whole generation would have resulted in far fewer people picking it up. Not everyone has that money. I can absolutely vouch that there are loads of Nintendo games I never pick up because of their more or less fixed prices.

GoW is a system seller for sure but another term might be a "system justifier". By releasing quality exclusives throughout the last generation they have no doubt convinced people to stay with PlayStation into the next generation.

Edited April 22, 2021 by Sheikah