Analyst: Games to get cheaper
Lower prices could spell bad news for publishers
By Mike Smith
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Could the days of the $60 video game be numbered?
Maybe so, according to statements made this week by video game industry analysts. Stores that cut video game prices over the holiday season might keep their lower prices permanently, Todd Greenwald, an analyst at Signal Hill, said in a release this week. As he put it, "To us, the biggest risk facing all publishers is the demise of $59.99 pricing for front-line 360 and PS3 software titles."
But we still might not be seeing lower prices on brand-new games. "Keep in mind there is a difference between price cuts on older, catalog titles that were released 3-4 months ago, and new, front-line AAA releases. While we may see plenty of more cuts on past holiday titles like Mirror's Edge, Madden, Guitar Hero, Saints Row 2, Prince of Persia, etc, we believe this is old news. What is far more important is where new releases are priced, and how that pricing is holding up," Greenwald said.
If you're a Wii gamer, though, you could be forgiven for assuming that this had already happened. A report from analytical firm EEDAR published this week indicates that median Wii game prices had already declined from $49.99 in 2007 to a present level of $39.99.
Although lower prices might seem like good news for consumers, Greenwald sounds a warning note. Lower prices would eat into publishers' profit margins, he says, as "development and publishing costs would stay virtually flat, while sales would take a 20% hit."
