EA predicts $70 (USD) price point for Playstation 4, next Xbox games

[Timman_24]

im actually surprised by this as i thought they would go with the smaller upfront price along with microtransactions/DLCs which makes a ton more money

That was my assumption too. I thought we would see more F2P titles on the consoles, so it seems strange to hear of $70 + DLC/microtransactions. I just don't see that being viable for most gamers.

[ImaNihilist]

You had some ties to EA, can you see them announcing this at E3 as fact? Oh boy, if they did that AND attacked used games...

So, there have been these long discussions in the industry about how to deal with declining revenues in terms of base games sales. Even for franchises in which revenues are not declining, growth is, and profit margins are shrinking across the board.

For whatever reasons, everyone that isn't Valve seems to not understand basic economics. Like, it is amazing to me how publicly traded companies with billions in revenue and thousands of employees can not understand the fundamentals of economics. How a board of directors and team of executives don't understand this irks me to no end. Endless consultants, and everyone is an idiot. I'm not trying to sound pretentious, it's quite literally just bewildering.

You would think that in a market where AAA titles are seeing declining revenue growth due to 99¢ iOS games the response would be to DECREASE prices. NOPE NOPE NOPE. They are trying to make up for declining revenue growth and shrinking profit margins by INCREASING the price of games across the board. Great strategy in a world where you have a monopoly, quite possibly the worst idea ever for where we are now. Now, it does make some sense for franchises that have an effective monopoly over a specific kind of game, like NFL Football, NBA Basketball, etc.; and to a lesser extent, an FPS with a lot of brand equity, but these guys are kidding themselves if they think their monopoly is that strong. The numbers already show that they aren't.

There was a concept I was working on for a major game publisher earlier to try to find the individual willingness to pay for a AAA title, but it now looks like that won't happen this year. Which means I will not be able to insert myself into the pricing discussion. Which I feel may have been a strategic move, because people might have been afraid I was right and no one wants to rock the boat. I am, at the end of the day, one person tangentially related to the industry.

Not only are prices going up, they are going way up. All the big dogs (Activision, EA, Ubisoft, etc.) are interested in seeing how consumers react to the $99 price point. Yes, you read that right, $99. The individuals per user revenue goal for a major title is already OVER $100 because of DLC and bundling. I'm not saying every game is going to be $99. But what they are doing is aligning games in a way that, within 30-90 days you will be "forced" to spend at least $99 on a game in order to be relevant. I believe what major public companies are trying to do with this next gen is find a way to account for very high average revenue per user per title in a single quarter. This is what the CEOs are tasked with in the next 5 years. Which is horribly ironic, as this is the exact opposite strategy of the last 5 years of social gaming which was all about trying to extract fractions of a cent from a billion people.

TL;DR Yes, games are going to be more expensive. Day One DLC isn't just going to normal, it's required. A game won't be allowed to ship without it. You will be forced to buy additional content in order to be relevant almost immediately. If you want to play a AAA title on next gen, you will have to spend at least $100. The big game companies don't get it, are completely retarded, and will eventually end up getting destroyed by small indie developers like Hothead and Mojang who want to make fun games that everyone can play, not abuse monopoly/brand power.

Personally, the cost is the main reason why I've gotten out of console/PC gaming for the most part. For $100 I can buy EVERY awesome iOS game that comes out in an entire year. For another $100 I can buy a pile of awesome indie games on Steam. In the console world that buys me two games that, at the end of the day, aren't even unique or really that fun. Just iterative brand ********. Which is somewhat ironic, as my job is making sure that other people buy into iterative brand ********.

[SewerUrchin]

Problem is, depending on how prolific and widespread of a trend this becomes, it's logical to think it will impact used prices too, right? If the game is $70 new, getting it for $50 used is going to be considered a 'good deal', the same way picking up a $60 game for $40 used is now.
While it will vary game by game and obviously used retailer/seller by seller, it's not hard to imagine that a higher NEW price will likely mean a trend of higher USED prices too, for the same reason: People will pay that higher price.

The last game I spent more than $20 on was Skyrim. Before that, I can't remember. I am a cheapskate.

[Timman_24]

So, there have been these long discussions in the industry about how to deal with declining revenues in terms of base games sales. Even for franchises in which revenues are not declining, growth is, and profit margins are shrinking across the board.

For whatever reasons, everyone that isn't Valve seems to not understand basic economics. Like, it is amazing to me how publicly traded companies with billions in revenue and thousands of employees can not understand the fundamentals of economics. How a board of directors and team of executives don't understand this irks me to no end. Endless consultants, and everyone is an idiot. I'm not trying to sound pretentious, it's quite literally just bewildering.

You would think that in a market where AAA titles are seeing declining revenue growth due to 99¢ iOS games the response would be to DECREASE prices. NOPE NOPE NOPE. They are trying to make up for declining revenue growth and shrinking profit margins by INCREASING the price of games across the board. Great strategy in a world where you have a monopoly, quite possibly the worst idea ever for where we are now. Now, it does make some sense for franchises that have an effective monopoly over a specific kind of game, like NFL Football, NBA Basketball, etc.; and to a lesser extent, an FPS with a lot of brand equity, but these guys are kidding themselves if they think their monopoly is that strong. The numbers already show that they aren't.

There was a concept I was working on for a major game publisher earlier to try to find the individual willingness to pay for a AAA title, but it now looks like that won't happen this year. Which means I will not be able to insert myself into the pricing discussion. Which I feel may have been a strategic move, because people might have been afraid I was right and no one wants to rock the boat. I am, at the end of the day, one person tangentially related to the industry.

Not only are prices going up, they are going way up. All the big dogs (Activision, EA, Ubisoft, etc.) are interested in seeing how consumers react to the $99 price point. Yes, you read that right, $99. The individuals per user revenue goal for a major title is already OVER $100 because of DLC and bundling. I'm not saying every game is going to be $99. But what they are doing is aligning games in a way that, within 30-90 days you will be "forced" to spend at least $99 on a game in order to be relevant. I believe what major public companies are trying to do with this next gen is find a way to account for very high average revenue per user per title in a single quarter. This is what the CEOs are tasked with in the next 5 years. Which is horribly ironic, as this is the exact opposite strategy of the last 5 years of social gaming which was all about trying to extract fractions of a cent from a billion people.

TL;DR Yes, games are going to be more expensive. Day One DLC isn't just going to normal, it's required. A game won't be allowed to ship without it. You will be forced to buy additional content in order to be relevant almost immediately. If you want to play a AAA title on next gen, you will have to spend at least $100. The big game companies don't get it, are completely retarded, and will eventually end up getting destroyed by small indie developers like Hothead and Mojang who want to make fun games that everyone can play, not abuse monopoly/brand power.

Personally, the cost is the main reason why I've gotten out of console/PC gaming for the most part. For $100 I can buy EVERY awesome iOS game that comes out in an entire year. For another $100 I can buy a pile of awesome indie games on Steam. In the console world that buys me two games that, at the end of the day, aren't even unique or really that fun. Just iterative brand ********. Which is somewhat ironic, as my job is making sure that other people buy into iterative brand ********.

Great insight. I'm pretty much getting the feeling that we may see the industry fold into itself over the next few years if they go ahead with this scheme. While EA and Activision are spending $80+ million on 8 hour games, other developers are creating fantastic tools for the indie community. Unity, cocos2d, XNA, etc etc bring the barrier to entry for gaming developers to the floor. You can literally purchase a fully featured game engine for $800. 1-5 developers can get together and put out a high quality indie title in a few months. "The Mythical Man Month" comes into play here. When these companies pile on more and more developers and try to reconcile the costs by eeking every penny out of the userbase, they end up hitting up against the negative effect of diseconomy of scale that happens in software development.

The fact is, the consumer doesn't give a crap about how much it costs or what tech is used or how many people were involved. They want fun and they want it at a good value, no matter where it comes from.

[ImaNihilist]

Great insight. I'm pretty much getting the feeling that we may see the industry fold into itself over the next few years if they go ahead with this scheme. While EA and Activision are spending $80+ million on 8 hour games, other developers are creating fantastic tools for the indie community. Unity, cocos2d, XNA, etc etc bring the barrier to entry for gaming developers to the floor. You can literally purchase a fully featured game engine for $800. 1-5 developers can get together and put out a high quality indie title in a few months. "The Mythical Man Month" comes into play here. When these companies pile on more and more developers and try to reconcile the costs by eeking every penny out of the userbase, they end up hitting up against the negative effect of diseconomy of scale that happens in software development.

The fact is, the consumer doesn't give a crap about how much it costs or what tech is used or how many people were involved. They want fun and they want it at a good value, no matter where it comes from.

This is exactly the problem they are facing internally on the dev side. They are still trying to create graphics and physics engines in-house, and the reality is that's just not how we do it anymore. It's just not cost effective. Big publishers will spend millions on developing a proprietary new engine for a game, and a company like Gameloft will take an off-the-shelf engine, rip off the game, and sell it for $9. Brand loyalists care. No one else does.

Most big publisher games don't excite me anymore. I'm having more fun with GTA: Vice City on iPad, which I got for $4.99, than anything else in a while. I've spent way, way, way more time on that $5 game than I have on the $60 Diablo III. If Blizzard really wanted to impress me they should re-release Diablo II on the iPad for $9.99 instead of D3 on the PS3 for $79.99.

And if Sony really wanted to impress me they'd find a way to make the PS3/PS4 controller work seamlessly with iOS/Android.

[Timman_24]

I believe we are moving to a liberating time for the gaming community. Due to the high barrier to entry into gaming development in the early days, developers needed backing by a publisher to buy workstations, purchase expensive software, and front the other major costs. Now, a few college kids can get together and kickstart a major project and be successful without all the corporate overhead and dividends that bleed money from innovation. The best thing that came out of last gen was the rise of the indie developers. iOS and Steam led this charge with Xbox live helping a tiny bit.

Man, I bet the people at EA are pretty scared. This next console generation is make or break for the industry as we know it and I certainly don't think increasing the cost to gamer is the way to go especially when the other options are literally an order of magnitude cheaper.

IMO a proper price is $39.99 top end with most games hitting the 29.99 mark. $9.99 smaller experiences fill out the bottom end. Then companies don't have to rely on fragile serial franchises where a change in gamer interests could be disastrous for the entire corporation. Didn't they teach business men to diversify? The marketing brief EA put out said they are "streamlining" down to 6-8 "core" titles. Damn, if two flop that's a 20-30% change in projected profits. Talk about riding the lightning...

[ImaNihilist]

EA is trying to defend the titles they know they have an effective monopoly on. The other big publishers are doing the same thing.

The problem is, this results in damn near ZERO innovation coming from big publishers. They are no longer willing to take risks or create new IP. What was the last big piece of IP from a major publisher? Assassin's Creed maybe? Bioshock? Both date back to 2007. It's all Battlefield #, Halo #, Assassin's Creed SOMETHING, Splinter Cell: Nonsense, Call of Duty BS #, GTA #, The Elder Scrolls #: Epic Title, Guitar Hero Random Decade, NFL game, NBA game, MLB game, blah, blah, blah.

Vavle's Project Greenlight is probably the most innovative thing to happen in terms of development and publishing. Best attempt I've seen so far to actually create new IP.

[Timman_24]

Well, hopefully they have some new IP lined up for the new generation otherwise people are going to get bored really fast. COD with higher resolution textures is not what most people want to see out of a next generation console, especially if they have to pay $30 more. I'm kind of wondering what Ouya is going to do. Xbox/PS4 with $70 games or Ouya with Free to $10 games. Even a few decent shooter clones on Ouya with decent multiplayer have a chance to pull casual shooter fans away especially if there are constant updates and just a tiny bit of gimmicky innovation that puts the titles in headlines. $99 + $10 for a new thing to sit in the media center and get that "new" feeling from may be enough for most people.

I have to say, if we see the usual crew crunching out iterative sequels then there may be a slew of burnt out devs going to greener pastures bringing innovation with them. Frankly, I'm just fine with Steam for the forseeable future.

[PDR60]

Ha this is funny. I am about 3-5 years behind in my game play. I'm half way through Fallout 3 (awesome by the way)and intend to move on to my next title of New Vegas. Maybe its because I'm a Linux gamer or maybe I'm just too busy. Anyway I paid a wopping $19 for the GOY edition that includes all the DLC. So $60 is just a joke for me. I think I'm like allot of casual gamers. We have a limited amount of time, money and certain like and dislikes. I enjoy the FPS as much as the next guy but to pay that kind of money then get on line and get powned by a 14 year old with reflexes like a cat on crack is just not much fun. Since I'm a PC gamer my titles are a bit restricted but not as much as one would think. So for all us casual gamers out there that also have families and life, $60 for a brand new title or $20 for a GOY of something older is a no brainer. Besides, by the time I get to play the "hot" titles the bugs have been worked out, the config for Linux is worked out and the experience is probably better as there are writeups and all kinds of data to enhance our game play.

[Area51]

But then on the other side you get comments like this from Jack Tretton:

PlayStation 4 game prices will run the gamut from one dollar to sixty, SCEA CEO Jack Tretton has revealed. "We're going to welcome free-to-play models, games from $.99 up to those $60 games," Tretton revealed in a CNBC interview.

Obviously that doesn't mean there is no way they'll go higher, just that it's not likely to be automatic.

http://www.joystiq.com/2013/02/22/tr...from-99-to-60/

[Snakespy]

For that last couple years if you were playing competitive games online you have been paying $110. This is not new news. That being said, I'm kind of done with most games. I'll play every now and then but there just isn't anything ONLINE that really catches me anymore. Mostly due to laggy *** servers, glitches not being fixed, and tubes seem to find their way into EVERY game. Ugh.