$2 games

[Shadow Conception]

Would it work? Could developers and publishers price their big-budget titles at $2 and still get away with it?

They'd get less money, but, obviously, many more people would buy at such a price, allowing them to still break even and make profit after x amount of games sold.

 

[purbeast0]

even if every person who owned an xbox360 in the world, which I believe is like 20+ million, that would still only be 40 million dollars, which is less than they make when they sell 1 million copies of games that are $60 a pop.

 

[nsafreak]

Go back to Business 101, do not pass go, do not collect $200...........


They would have to sell a HELL of a lot more copies of any game before they saw any profit. Just for example, here are just a few of the costs associated with making a game:

$0.03 per DVD (higher cost for Blu Ray)
$0.02 for artwork printing on the DVD
$0.10 for packaging & manual

And that's solely for the cost of just the bare basics of any given game. You then have to factor in the cost of developing the game, the cost of distributing it, etc. Could they potentially lower the cost of new games? Sure, but then they wouldn't be making as much of a profit and they're businesses not charities. And on first party games from any of the companies they're even less inclined to do so since they're trying to make up some of the money lost on selling the consoles which are sold as loss leaders, with the possible exception of Nintendo.

 

[Shadow Conception]

I didn't really think of all that stuff. Thanks for the in-depth answer.

 

[Childs]

Instead of $2 make it $30 and you have an interesting proposition. I would bet 3-4x more people would buy at $30 then at $60. They wouldnt lose as much potential revenue to the used game/rental market as well. Once a game is made its actually cheaper to sell more copies than fewer, so they could easily adjust the price to hit their sales goal at launch, as opposed to setting a maximum price at the beginning and hope you hit your goals.

There might be some issues with retail like requiring more inventory to keep up with demand or increasing shelf space. Getting people to buy things in your store is always a good thing, as that hopefully leads to more sales.

 

[BD2003]

Originally posted by: Childs
Instead of $2 make it $30 and you have an interesting proposition. I would bet 3-4x more people would buy at $30 then at $60. They wouldnt lose as much potential revenue to the used game/rental market as well. Once a game is made its actually cheaper to sell more copies than fewer, so they could easily adjust the price to hit their sales goal at launch, as opposed to setting a maximum price at the beginning and hope you hit your goals.

There might be some issues with retail like requiring more inventory to keep up with demand or increasing shelf space. Getting people to buy things in your store is always a good thing, as that hopefully leads to more sales.

Well, there are some issues with that approach - people wont necessarily buy more games because they only have so much time to play. And whether they like it or not, the secondary market does exist, so dropping the price at launch wont necessarily wont in their favor when used games are still going to outprice them.

Its not as if games dont drop in price, and dont forget the players choice games for $30 or less. Basically, they try to capture as many $60 sales at first, and then even new games gradually drop in price. It wouldnt make much sense to price it at $30 from the start because for most good games, theres plenty of people willing to pay $60.

The iphone games/apps are a different story. Its extremely easy for people to buy, and theres no distribution costs involved, so it's much more of a volume game, and games are much much cheaper. Rolando, by far the best game on the iPhone, would easily be a $30 DS/PSP game, but it's only $10, and will probably drop in price even further.

 

[skyofavalon]

Sneak King 2

 

[bearxor]

Yeah, $2 is waaaay out there. Bringing it down to $30-40 is a much better conversation. I will say that I have never bought a copy of Madden and the last football game I bought was NFL2K for the Dreamcast. When NFL2K5 came out for $20, I bought it on release. I haven't bought another football game since. So lower prices will make some people look at games a second time when they might have normally ignored them.

 

[nakedfrog]

$10-20 is the sweet spot for me.

 

[SunnyD]

Ask 2k sports. They did it (19.99) with their sports line up for what, 2006 or something like that? What happened? EA bought exclusive licensing to the NFL, and 2k couldn't make another NFL branded football game.

 

[Slick5150]

Originally posted by: SunnyD
Ask 2k sports. They did it (19.99) with their sports line up for what, 2006 or something like that? What happened? EA bought exclusive licensing to the NFL, and 2k couldn't make another NFL branded football game.

Yep. Which I think shows that it was successful. I dono't remember the sales #s, but it took a huge chunk out of the Madden pie. It served 2ks purpose of getting people to try their game instead of Madden, and still make money off of it.

Of course, then EA acted like EA and changed the rules of the game back in their favor by buying away the competition.

 

[ShawnD1]

Originally posted by: Childs
Instead of $2 make it $30 and you have an interesting proposition. I would bet 3-4x more people would buy at $30 then at $60.

This is only true for the not so popular titles. When games like GTA 4 and MGS 4 hit the shelf at $60, they sell out, so there's nothing to gain by dropping the price. You'll only start to make more money with a price drop if the game does not sell out when it has a $60 price.

Also, it's not good to drop the game's price below $20. I worked at Best Buy over Christmas, and games priced at $20 or less were put into the dump bin. When people come in to buy a game, they usually go straight to the shelf because they assume the $20 dump bin is filled with garbage, and that's usually true. Another problem was that the dump bin (in my store) was located near the 360 games, which was about 4 rows down from PS3 games. If your $20 PS3 game was in the dump bin, it will never sell because people buying PS3 games probably didn't even see the dump bin.

 

[erwos]

Someone needs to do some research on the concept of price elasticity, which they have apparently rediscovered.

Plus, you'd never get such a game stocked on store shelves. The ROI for the store isn't there. They have a limited amount of space, remember?

 

[tatteredpotato]

Originally posted by: SunnyD
Ask 2k sports. They did it (19.99) with their sports line up for what, 2006 or something like that? What happened? EA bought exclusive licensing to the NFL, and 2k couldn't make another NFL branded football game.

But in this scenario since the franchise usually hit shelves at $50, that was the perceived value, but if every game sold for 20 or 30 bucks then it would be a different environment.

 

[tw1164]

I remember a story where Konami released a soccer game is SE Asia for a low price ($10 or less), then offered a lot of DLC (uniforms, stadium, etc). They tried it to combat piracy and were able to make money.

 

[tw1164]

I remember a story where Konami released a soccer game is SE Asia for a low price ($10 or less), then offered a lot of DLC (uniforms, stadium, etc). They tried it to combat piracy and were able to make money.