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Farewell to the $60 Video Game - The Ringer

Farewell to the $60 Video Game - The Ringer

Farewell to the $60 Video Game - The Ringer
Oct 23, 2020 4 mins, 11 secs

The cost of games had remained stable since 2005, when ‘Call of Duty 2’ set the standard price.

But when the game made its console debut almost a month later as a launch title for Microsoft’s Xbox 360, it cost $59.99—an industry-altering price.

Mat Piscatella, who’s now the executive director for games at market research company the NPD Group, was working for Call of Duty publisher Activision when the sequel launched.

The new price wasn’t without its detractors: GameSpot’s review of the Xbox 360 version griped that the game had a “higher price point than its PC counterpart.” But the spike in price didn’t stop consumers, who made Call of Duty 2 the 360’s best-selling launch title.

“They were selling so many copies of Call of Duty 2 at $60 that the rest of the industry was like, ‘Well, hell, if it’s going to be 60 bucks, let’s go to 60 bucks,’” Piscatella says.

Incredibly, Black Ops Cold War will cost $59.99 on the PS4 and Xbox One—the same price Call of Duty 2 retailed at in 2005.

“Given how price-insensitive day-one game buyers are for the games they want to play, I anticipate this sticking,” Piscatella says.

The $59.99 it took to buy Call of Duty 2 on launch day has been equivalent to more than $70 in present-day dollars since September 2012, which was more than a year before the Xbox One and PS4 appeared.

As Take-Two CEO Strauss Zelnick said in August, “There hasn’t been a frontline price increase for a very long time, although costs have increased significantly.” Estimates of the average increase in development costs for Triple-A titles since the last large-scale price hike range from two to three times to more than 10 times (not including marketing costs).

“People buy games not based on what they think they’re actually going to play, but based on what they wish they had time to play,” Piscatella says.

“The real cost is in the art assets,” Piscatella says.

So yes, we think there probably will be an increase in development budgets.” The transition from physical to digital sales offsets some manufacturing costs—when players download games, publishers don’t have to make disks, cases, and manuals to stock in stores—but Piscatella says those savings are marginal after one takes into account the percentage of sales that goes to digital storefronts.

One encouraging trend is a growing willingness to lower the price of games that may not last as long?

“We haven’t had variable pricing models in games until recently,” Piscatella says.

Piscatella notes that because the concept of the $60 (or, soon, $70) game is so ingrained, the budget pricing approach can backfire by making consumers suspicious: “The perception is ‘Wait a minute, wait a minute—why are they trying to make this price lower.

The average price of a movie ticket has climbed by more than 40 percent since 2005.

“If you’re building your plan off games A, B, C, and D, and games A, B, C, and D were price X, then you’re likely going to build out price X in your plan,” he says.

from 2009 to 2016, says he unsuccessfully pushed for price hikes when the current console generation launched.

Some of the resistance that stymied his efforts stemmed from the backlash to “Project $10,” an EA-led attempt in 2010 to make buyers of preowned games pay to download content that the original owner could acquire with a one-time code that came with the game.

“For some of the bigger games, the early sales of those games will actually weigh over 50 percent in favor of the more expensive editions,” Piscatella says.

The average price of a day-one game at that tier is well over $59.99 now.”.

Even so, Piscatella’s NPD data says that the average sale price of new games over their full life spans—including day-one sales and subsequent post-price-cut purchases—has been flat at roughly $40 since 2012.

Piscatella anticipates that most of the console gamers who’ve been paying full price for games on day one will continue to do; anyone with the disposable income to drop on a console and a giant TV won’t balk at an extra $10 for a few games a year.

“Right as this is happening, we also have this big movement toward subscription services, to all-you-can-eat plans, to free-to-play games,” Piscatella says, adding, “there are a lot more options on the lower end of the price scale.”.

For $10 a month (the price of two $60 games per year), players can subscribe to Microsoft’s or Sony’s Netflix-style subscription services, Xbox Game Pass and PlayStation Now, and gain access to hundreds of titles—more than any one person could possibly have time to play?

In addition to publishing Black Ops Cold War, Piscatella says, the company is thinking, “We’re also going to do Call of Duty: Warzone, which is free to play, at the exact same time, and oh yeah, you could do Call of Duty: Mobile.

“By 2030, I expect an overwhelming majority of dollars to be free-to-play and subscription-based in the games industry,” Piscatella says

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