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[Xbox-Scene]

Analyst: $60 Pricing May Not Be Sustainable Posted by XanTium | January 8 23:58 EST

From biz.gamedaily.com: Is $60 too much for a game? That's a question that has been asked repeatedly over the last year as the next-gen market has taken shape. Nevertheless, one analyst doesn't think this price point is very sustainable, as recent price drops on some titles (like Madden, right) seem to indicate. According to analyst Jeetil Patel of Deutsche Bank, "either the industry is still in transition, or $60 pricing is not sustainable." Patel pointed out that in the past cycle, price cuts on Madden didn't occur until at least April. "In this new cycle, we think it [is] critical that $60 next-gen prices last at least as long as $50 prices did in the prior cycle in order to compensate for steeper development costs, a tougher competitive environment (which requires more marketing spend) and so that EA can replicate the 27% operating margins seen in FY04," Patel said. "We believe the inability to sustain $60 into April suggests consumer appetite for premium priced titles is questionable. Note the reported reductions include Xbox 360 SKUs of the bellwether Madden game, as well as Tiger Woods & FIFA, the latter two being released this past quarter (all three cut from $60 to $50). Recall that EA also cut Xbox 360 prices in May-06 despite selling into price insensitive early adopters," Patel continued. Full Story: biz.gamedaily.com

[no0b123]

In my opinion, $60 dollars is the most I would pay for a next-gen game. Games do become expensive when you want to own a lot. I think the main concern I have though, is the fact that you only get around $30 for a used game (like 2 weeks old) and the game store sells the game used for $55! Also, as mention above, Madden 06 is only $12 used? That's insane, the game isn't that old!

On another note, I think HD-DVD movies should be priced at the most for $30 dollars BRAND NEW for a movie and like $20-$25 for a HD-DVD movie that has already come out. Just my thoughts...

[brywalker]

This guy is an idiot. And this is why.

Games sell at $60. Like crazy. GOW sold how many in 8 weeks? Yeah, so they bring the price down to $50 after the first 2 months. WHO CARES? They made and extra $10 per unit off the people that HAD to have it. It's ALL PROFIT.

People pay $60 for a game. Game stops selling at $60, move it to $50. Then roll it down normally.

This guy is a total toolbox.

[NKode]

I do not see why there is such a curfuffle about there being a $60 premium price-point for next (current) gen games.

I remember back in the early days of the PS2/XBox where there were $50US pricing for "current gen" games.  In that same breath, the $CDN was hovering around the area of $1 US = 1.6 CDN.  Which resulted in games, north of the border, to cost in the area of $70-80 CDN.  So after taxes, in the high-half of these situations, I used to end up paying a little bit under $100 per title.  Yeah, the exchange rate sucked in those days.

.....Fast forward to current market situations.  And while my the $CDN is more than appreciative to the $USD, I am now paying in the area of $60-70 CDN for these higher-end titles.  SO am I complaining? No.  Why? Because I know the situation could be a lot worse.

[Dravor]

QUOTE(brywalker @ Jan 9 2007, 05:41 AM)

This guy is an idiot. And this is why.

Games sell at $60. Like crazy. GOW sold how many in 8 weeks? Yeah, so they bring the price down to $50 after the first 2 months. WHO CARES? They made and extra $10 per unit off the people that HAD to have it. It's ALL PROFIT.

People pay $60 for a game. Game stops selling at $60, move it to $50. Then roll it down normally.

This guy is a total toolbox.

I have an even better question.... why hasn't MS gotten into the Game Rental segment?  At 7GB they can easily deliver afull game.  Although one may be limited at having just one game downloaded at all times.  However, they could easily reel in another $15-20 a month by allowing users to download 1 game at a time, as often as they want over 1 montnh, at the rate of 1 game at any time.  I don't think it would hurt their sales a ton, and they would compete directly against NetFlix and BlockBuster.

[gordita37]

Maybe when they release a bigger HD

[FUCKMICROSOFT]

or when the average consumer's home connection is able to dl a 7gb file in a reasonable amount of time. i mean what do most people have in there households, Cable? my demos take a very long time to download a 1 gig file and i sure as hell wouldn't throw 60 dollars at a game download that would take 7 times as long and needed to be deleted and redownloaded inbetween online game purchases.  

i mean it still seems cool though i just dont think it's practicle at this time in technology and ms's current live structure.

[TheIceman72]

Well I tell ya this...As long as EA keeps putting out shity Sports titles people are going to end up not paying premium for games. Maybe they should try not putting out the same crappy Madden year after year? Everyone else if fine. But EA is a different story. Boy do I wish the 2k series was still making football.

[gg22mm]

Definetly not for EA as long as they keep publishing C R A P  (IMG:style_emoticons/default/muhaha.gif)

Most people will pay whatever to own a good quality game. Actually people like to pay for quality!  Well most of the time... (IMG:style_emoticons/default/sleep.gif)

[TheIceman72]

Totally agreed. I am sure people would have paid $75 for Gears of War. Now if I had to do it over again I would not pay $15 bucks for Madden 07. I just dont understand how a game with so many flaws and bugs seems to be hot year after year. With EA owning the rights to NFL games, this may be my last Madden till 2010 unless I hear some RAVE reviews from real players.

[Sanitarium]

I've never bought a 360 game for $60 and never will.  All my games that were/are $60 were bought used.  It's too damn much money for one game.

[d-range]

Here in Europe (The Netherlands), the standard price for new games is 64,95 EURO. At the current exchange rate thats more than $70 (they tend to go down to 55 euro within a month, except for big titles like GoW that still sell for more than 60 euro)... Games still sell here, so I don't see an overall price drop anytime soon...

This post has been edited by d-range: Jan 9 2007, 10:37 AM

[thund3rstruck]

If anyone wondered why piracy is so rampant and out of control, this is why. I understand the economic need to sell the games at a specific price point in order to compensate for research and development costs but $60 is just too much money for a video game.

Perhaps if a real "used" market existed then people would be less inclined to pirate the games but used games, which should cost $20 or so, are being sold for $35-$40 which is not a bargain at all.

[kjmc]

at this price point, even renting is expensive at the moment. i tried to rent a game from blockbuster and they wanted a 60 deposit. you get it back, but still thats money unavailable to you for a time. I don't know why they want a deposit when they have a credit card on file.

[epsilon72]

Wait...so an Indian guy working for a German company is talking about videogame prices?  Sure, I agree that they are too expensive, but the console makers and the devs love making more money, so I don't think we'll ever see a reduction.