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[incognegro]

Good read indeed!

I agree with everything that is being said here. I think the budget lineup of games that MS has planned is a good start to counter this but I agree that more should be done to have a strong footing in this industry. Nintendo's high Licensing fee is what hurt them with the nintendo 64 and now that we moved away from cartridge based systems a situation like this should not reemerge (sp?).

Now with the ps3 looking to have EVEN more expensive games, it looks like things will worsen if somebody doesn't do something about it.

The Wii is looking more like the david to sony's/Microsoft's Goliath!

[twistedsymphony]

They make some interesting points and I would agree with them... if this was last November. The problem is they're speculating on how the inflated price might hurt the market but the opposite is true.

QUOTE

Pricing next-gen software at 50 pounds will not lead to increased revenue; it will dissuade consumers from buying into next-gen hardware early in the cycle, will depress the attach rate of the consoles, and worst of all, will accelerate the damaging trend of knocking prices down early in the lifespan of a software product.

This ignores the fact that the Xbox 360 has broken MS's projected sales figures, it ignores the fact that the Xbox 360 so far has the best attach rate of any console in history (both games and accessories) and the fact that even after 9 months of the console on the market most of the launch games haven't yet seen a price drop, and those that have are mostly sports games and only saw a drop of about $10 (£7)

So yeah I do think it's a bad idea, and yeah I do think the excuses are hollow, and yeah last November I would have predicted the same outcome, but that's not what happened. Apparently consumers just saw the extra price and said "meh, whatever". Granted I DO know some people who refuse to buy a 360 because of the higher price of games, and the higher price of the console, but that doesn't change the fact that there are a whole lot more people who seem to not even care.

Another interesting thing is that it's just the 3rd party software companies that have jacked up the price, not the 1st party. All 1st party MS games are the exact same prices they were last Gen (in the US at least).

[KAGE360]

while i agree with this, its also true that it has not effected the 360 sales at all.  of course i think this is the tipping point that if games were $70 the results would not be the same.  

what i find odd is that microsoft's 1st party titles have been the normal price of $50 so far and i would think this was an attempt to prove the point that their XNA tools make development cheaper and easier.  however their first title to reach the $60 price point (GoW) comes from a dev team (epic) who scoffed at activisions and EA's comments of raised development costs and teams tripling in numbers.  

[incognegro]

Kage....the reason MS can keep prices so low is because some of the licensing fees don't apply to first parties. If you look at the n64 that was a prime example. 3rd parties were selling games for $80 while nintendo was selling for $60. When the ps1 came out games were $60 while sony games were $50. Same for the Saturn I think but I never had one so I could be wrong.

[deadparrot]

What I find absurd is the fact that we over here in Europe, pay almost DOUBLE what games cost in the US.  What costs you $60 USD, costs us £50 ($93 USD) with today's exchange rate.

In the UK, the top game price is £50, and in the US, it's what - $60?  This is what I feel is hurting the European market.  This is why I only own one 360 game.

[KAGE360]

QUOTE(incognegro @ Sep 11 2006, 01:39 PM)

Kage....the reason MS can keep prices so low is because some of the licensing fees don't apply to first parties. If you look at the n64 that was a prime example. 3rd parties were selling games for $80 while nintendo was selling for $60. When the ps1 came out games were $60 while sony games were $50. Same for the Saturn I think but I never had one so I could be wrong.

while this is true, last i checked the royalty rates were only around $7 per disk.  also how do you explain that GoW is $60 and its 1st party?

[nebur]

i don't think the article sounds too outlandish. the 360 may have a high attach rate but there could be several reasons for this. those include:

cores: need memory for games parents during x-mas time may have purchased a memory unit only to have their children ask them for a harddrive for downloads

wireless controllers: many people want plug and play kits

wi-fi cards: being that the 360 is all about the online experience and many have exisiting wireless networks in their house they could swing that way.

extra controller: almost always a given that people purchase an extra whether wireless or wired.

live: something that microsoft is pushing very strongly for multiplayer

i would say that these are the main reasons other than games for the high attach rates. now many consumers or children of consumers will find live essential, which we would consider to be a pretty high attachment other then a harddrive.

as for games not dropping in price...well atm the 360 is the only "next-gen" system out.

[twistedsymphony]

They track the attach rate of accessories separately from the attach rate of games. IIRC the accessory attach rate isn't much higher then it was previous gens but the game attach rate is almost double.

[KAGE360]

QUOTE(twistedsymphony @ Sep 12 2006, 08:30 AM)

They track the attach rate of accessories separately from the attach rate of games. IIRC the accessory attach rate isn't much higher then it was previous gens but the game attach rate is almost double.

i dont think there is much more you can say to make anyone see.  the 360 has shattered records and expectations yet people still think its for whatever reason other then what has been explained in this very thread.  

the important thing to remember is that this is VERY attractive to developers/publishers.  also i will be very curious if the ps3 will enjoy the same level of success when attach ratios have never been sony's strong point.  nintendo will do great and i think they will surprise many this generation.

[griffin XXI]

QUOTE(twistedsymphony @ Sep 8 2006, 02:27 PM)

They make some interesting points and I would agree with them... if this was last November. The problem is they're speculating on how the inflated price might hurt the market but the opposite is true.
This ignores the fact that the Xbox 360 has broken MS's projected sales figures, it ignores the fact that the Xbox 360 so far has the best attach rate of any console in history (both games and accessories) and the fact that even after 9 months of the console on the market most of the launch games haven't yet seen a price drop, and those that have are mostly sports games and only saw a drop of about $10 (£7)

So yeah I do think it's a bad idea, and yeah I do think the excuses are hollow, and yeah last November I would have predicted the same outcome, but that's not what happened. Apparently consumers just saw the extra price and said "meh, whatever". Granted I DO know some people who refuse to buy a 360 because of the higher price of games, and the higher price of the console, but that doesn't change the fact that there are a whole lot more people who seem to not even care.

Another interesting thing is that it's just the 3rd party software companies that have jacked up the price, not the 1st party. All 1st party MS games are the exact same prices they were last Gen (in the US at least).

 
Not to seem too much like doofus, but are saying the attach rate is greater than all others in their first 9 months of shelf life, or since their inception til today?

[twistedsymphony]

QUOTE(griffin XXI @ Sep 12 2006, 04:18 PM)

Not to seem too much like doofus, but are saying the attach rate is greater than all others in their first 9 months of shelf life, or since their inception til today?

Inception till today... but if you looked at only the first 9 months typically the first year attach rates are substantially LOWER then they are across the console's life span (because the consumer took a hit buying the console and accessories also because there are less titles to choose from so there is typically less that interests them), so in terms of just that the Xbox 360 would just beat them but KILL them if you just looked at the first nine months... most consoles are lucky to have an attach rate over 1 or 2 for the first year.

as for nickthegreat's comment, you're right that install base is important but it's no more or less important then attach rate...

Basically the install base is how many people have the console (obviously) and the attach rate represents their willingness to buy new games.

You could have an install base in the billions but if the attach rate is barely over 0 chances are you wont sell a single game.

Similarly if the attach rate is HUGE  but you've only got an install base of 10 consoles chances are you wont sell very many copies either.

Simplifying the equation you could probably say

install base * (attach rate/number of games on the market+1) = the likly number of games you'll sell

Obviously it's FAR FAR more complex then that with market trends and genre saturation, time of year, etc. But that's assuming all games are equal and the market works in a linear fashion.

IIRC Sony's PS2 had an attach rate of about 2 games last gen... the Xbox had about 4 and the GC had the best attach rate with around 6 I believe. 360 currently has about 7 or 8.

Lets run some numbers shall we? Number of games on the market would mean number of games currently and readily availble to consumers Xbox 360 has about 80 games excluding XBLA titles (based on the list on mygamercard.net) the PS2 has a library of about 6000 games world wide but only 1/3 of that is availble in the US/EU. Also lets assume that only 20% are currently availble at any one time. Most stores wont stock the entire catalog and after a while most of the non best-sellers stop production and dissapear completely (meaning that game is no longer on the market)

so for the Xbox 360
~6 million * (7/~80) = ~525K

for the PS2
~130 million * (2/~400) = ~650K

So you'll see, even with the incredibly small 360 install base, due to the low number of available games and the high attach rate a publisher can more the likely come close to selling just as many copies on the Xbox 360 as they can on the PS2 TODAY... this is why you see a lot of Xbox 360 games in the best seller lists right along side their PS2 counterparts... it's because of the high attach rate at such an early point in the 360's life.

Obviously these numbers are in no way accurate and most of it is just guesswork but I'm just trying to get across why attach rate can be just as important as install base.

[griffin XXI]

Its seems pretty apparent the 360 has an enormous attach rate, but out of curiousity, what is the possible explanation for this? It doesn't seem the price hike is affecting this (as it does me), or the quality and quantity of games available so far (as it does me), so what difference is there between this generation system over all previous gens? Is it this generation of kids and a lack of other activities, and those of us who grew up in the 80s making up for lost playing time, because our parents made us play outside? Or is it simply more families have disposable income and want the latest and greatest HD tech product. All of this is very curious to me, and it seems like this could be explored in great detail in a graduate or doctoral thesis.

[incognegro]

QUOTE(KAGE360 @ Sep 11 2006, 09:31 PM)

while this is true, last i checked the royalty rates were only around $7 per disk.  also how do you explain that GoW is $60 and its 1st party?

Sorry for the late response but im chalking it up to just the cost of developing a game of that magnitude. And even though its $7 a disk, remember there is more added to the pricing other than royalty fees.

[driso]

I just dont see what all the fuss is about for 10 dollars.  I remember back in the super nintendo days, having to convince my parents to pa 70 usdollars for street fighter II.  I mean yeah I would like games to be 39.99 but there not and I like games so I gonna keep playing cause im a gamer.

[mike96sc2]

QUOTE(driso @ Sep 13 2006, 11:28 AM)

I just dont see what all the fuss is about for 10 dollars.  I remember back in the super nintendo days, having to convince my parents to pa 70 usdollars for street fighter II.  I mean yeah I would like games to be 39.99 but there not and I like games so I gonna keep playing cause im a gamer.

Exactly, and if you go further back I remember $60 Intellivision games. That was roughly 25 years ago people. The fact we enjoyed $50 games for so long as helping to entrench video games into the society and popular culture. Now they've got that foothold and they're taking some back.

Now what we should see with $60 games is more revenue that can be reinvested in new and original games and gaming ideas. Those games won't have to be million sellers because developers have their annual releases like madden for $60 or $70 that will sell regardless. The extra money off the big names can help keep us to get new and original material.

Think of it like this, if your company's bottom line is based on every game having to be a million seller then you can't afford to take chances, however if you're making a premium on those million sellers, then you have more revenue on your bottom line which affords people to take chances.