Xbox one

[Bowielee]

Average income has barely increase along that same time, even as the value of the dollar has halved. It certainly hasn't matched inflation.

That really has no bearing on the conversation. Despite this fact, the cost of most everything else has also increased, while game prices have not.

I don't understand how people are expecting games to actually decrease in price when most everything else is increasing in price.

Would I love for games to be cheaper? yell yeah.

Is it realistic to expect it. Not in the least.

There's a reason that companies are nickel and diming on additional content for games. As much as we like to think that companies should make games for the love of making games, they are still companies and companies are about profit.[DOUBLEPOST=1372668648][/DOUBLEPOST]

The amount of consumers has increased though too.

This may have been true ten years ago, but since around the release of the Xbox 360 and PS3 we've hit pretty much market saturation for gaming. The only gaming thing that broke into a wider audience was the Wii.

 

[Frank]

I dunno, we'll see what kind of legs the Ps3 has. Sony's pretty intent on selling them to every non-standard electronics market on Earth.

 

[Bowielee]

I dunno, we'll see what kind of legs the Ps3 has. Sony's pretty intent on selling them to every non-standard electronics market on Earth.

I assume you mean the PS4.

The thing is, even if the console branches out to new markets, that's not going to have much of an impact on game sales. The majority of casual gamers who get a console will only buy a few games for them. Everyone and their brother bought a Wii, but most people I know who were not already heavy gamers played Wii Sports, Wii Fitness, and that was about it.

Sure, they may sell more consoles, but that doesn't directly translate into more game sales.

 

[figmentPez]

I don't understand how people are expecting games to actually decrease in price when most everything else is increasing in price.

I've already explained why:

• It's far cheaper for publishers to distribute games.
• Price fixing artificially inflated the market
• There is a much larger market to sell games to (economies of scale)
• Secondary markets (merchandise, soundtracks, etc.) have grown tremendously since the 1980s.

This may have been true ten years ago, but since around the release of the Xbox 360 and PS3 we've hit pretty much market saturation for gaming. The only gaming thing that broke into a wider audience was the Wii.

Microsoft themselves is projecting a 28% increase in the market for the Xbone over the 360.

Market research company Newzoo projects the games market will continue to grow by an average of 6.7% a year through at least 2016.

And, as for breaking into wider audiences? Smartphones & tablets.

 

[Bowielee]

I've already explained why:

• It's far cheaper for publishers to distribute games.
• Price fixing artificially inflated the market
• There is a much larger market to sell games to (economies of scale)
• Secondary markets (merchandise, soundtracks, etc.) have grown tremendously since the 1980s.

Microsoft themselves is projecting a 28% increase in the market for the Xbone over the 360.

Market research company Newzoo projects the games market will continue to grow by an average of 6.7% a year through at least 2016.

And, as for breaking into wider audiences? Smartphones & tablets.

None of this has anything to do with why people should expect some sort of decline in game pricing other than the distribution. The cost of production is not going down. The bulk of cost in producing games isn't in the physical manufacture of media. It's in hiring teams of programmers, directors, voice actors, mo cap actors, artists, orchestras, etc... Those costs are increasing, not decreasing. Frankly, sixty dollars is not an unreasonable price for games.

And again, AAA titles have nothing at all to do with the casual market which is the wider audience you're referring to. They will be purchasing Bejeweled, not Bioshock.

 

[Bowielee]

One could also argue that Economies of Scale don't really apply in the case of the entertainment industry, of which the games industry is a part. It's not like with an automobile or dvd player where streamlining physical production or redistributing labor or materials can directly translate into savings for the consumer.

 

[Bubble181]

One could also argue that Economies of Scale don't really apply in the case of the entertainment industry, of which the games industry is a part. It's not like with an automobile or dvd player where streamlining physical production or redistributing labor or materials can directly translate into savings for the consumer.

That's nonsense. These arguments apply even more here, since the costs of production remain 100% static no matter the size of the market.
I produce a game. It costs me $50 million. There are 100 million potential customers. How much do I have to ask per game to recoup my investment? Now, how much do I have to ask per game if there's a billion potential customers? Myeah.

Economies of Scale don't really apply in some service industries - for example, in my sector. Whether I'm a company putting one security guard in one building or a thousand security guards in a thousand buildings, the guards still cost the same so I still have to charge each customer the price for a guard. There are only marginal improvements through scale, with lower overhead and easier replacement in case of illness and that sort of thing. Same for nurses, or teachers, or pretty much anything where the amount of labour is linked to the amount of work.
In markets where the initial investment is the heaviest part budgetwise (such as games and medicine, for example, as well), scale has a larger effect on price reduction than in markets where resources and components play a bigger factor, not a smaller one.

 

[Bowielee]

Are we talking about economies of scale or economies of scope? I think we're getting terms confused here.

 

[Bubble181]

Well, that might be true, I'll have to go check the difference Terms like that might be victim to translation errors. Off to Wikipedia!

 

[Bowielee]

OK, I have to concede, yes, the cost per unit is basically negligible when the initial investment is recouped.

However, I still think that the entertainment industry can't really be compared to normal economies. The value of entertainment is just to esoteric for there to be any hard rules about the determinants of cost.[DOUBLEPOST=1372688372][/DOUBLEPOST]I do feel the need to point out, though that the cost to produce a video game has gone from around 1-4 million in the early 2000s to around 28 million today. That's at least a 700% increase on cost to produce. I'd find it hard to believe that the audience that consumes video games has increased by that much. But, it could have for all I know.

 

[strawman]

Just a note, investors put in 28 million and expect 150 million back for AAA games. When the game "fails" they expect at least 50 million back - doubling their investment is considered a loss for them because they could have tripled it with safer investments elsewhere in the same time period.

Putting in 5 million and getting 30 million back seems profitable, but you've only made 25 million, whereas the bigger games will make you 120 million.

So heavy investors will not back a 4 million dollar game - it's not in their league.

Games will continue to cost $60 because that's what people will pay. They won't pay more, and over the last few decades the supply and demand calculations they use show that they make the most profit when they sell a AAA game at that price.

 

[Bowielee]

I tried to find a units sold figure for games from an equatable time period, but can only find sales, which I could try to extrapolate, but I'm just to tired to do it, so you'll have to forgive the really rough figures. Sales went from 5.5 billion in 2000 to 14.8 billion as of last year, which is about 2 billion down from 3 years ago when it peaked above 16 billion.

So, that's an increase in sales of roughly 269%, so by and large, we are still getting our money's worth.

 

[Frank]

Just a note, investors put in 28 million and expect 150 million back for AAA games. When the game "fails" they expect at least 50 million back - doubling their investment is considered a loss for them because they could have tripled it with safer investments elsewhere in the same time period.

And thus why the games industry is in the shape it is, other than a very, very select few games, they just don't sell like that.

 

[Bowielee]

Also of note is that in any entertainment industry, the vast bulk of the profit is made upfront upon release of whatever it is, be it movie, book, game, or music. Some profit may be made on the backend, but if something doesn't succeed out of the gate, it's considered DOA. That's one of the reason that things like Steam sales can exist. Once the first few months have passed, they've seen the bulk of their return so they aren't very concerned about pricing after that.[DOUBLEPOST=1372689712][/DOUBLEPOST]

And thus why the games industry is in the shape it is, other than a very, very select few games, they just don't sell like that.

What shape is that, exactly? I honestly want to know what you're view of the shape of the industry is to know if we're seeing it the same way so we're at a common understanding.

 

[Krisken]

Just a note, investors put in 28 million and expect 150 million back for AAA games. When the game "fails" they expect at least 50 million back - doubling their investment is considered a loss for them because they could have tripled it with safer investments elsewhere in the same time period.

Putting in 5 million and getting 30 million back seems profitable, but you've only made 25 million, whereas the bigger games will make you 120 million.

So heavy investors will not back a 4 million dollar game - it's not in their league.

Games will continue to cost $60 because that's what people will pay. They won't pay more, and over the last few decades the supply and demand calculations they use show that they make the most profit when they sell a AAA game at that price.

Right. It also applies to the concept of not pricing the hobby outside of the target demographic- young, generally minimum wage males with disposable income. Right now in my hobby of choice there is a lot of grumbling about how expensive the hobby has become, with a lot of people saying the inflated price increases has caused them to dramatically slow down or even stop their purchases. I believe the non-formal poll by Apocalypse 40k had 90 of 117 people choose the option "I buy less 40k because of the rising prices". Cheaper alternatives have become very prevalent lately, and there has been an upswing in gaming as well.

If game companies aren't careful, they'll see that translate in their profits. iOS games have been taking off and while they won't deliver the same level of quality, eventually people will see the price/time spent in their heads.

 

[Covar]

What shape is that, exactly? I honestly want to know what you're view of the shape of the industry is to know if we're seeing it the same way so we're at a common understanding.

Going to hell in a hand basket and dying a slow death. Unless you say so in which case you're wrong and the game industry isn't slowing down and is growing greater than ever. At least that's my understanding after reading this thread.

 

[strawman]

inflated price increases

Have game prices really increased?

I thought that we've simply seen more and more AAA games, so while the price per game, and the price per entertainment hour hasn't increased, the number of games at that price (and thus the number of hours that could be played) has increased.

Thus a player committed to playing 40% of the available AAA games will see their total game budget go up per year, but that's because there are more games, and they are playing more games than they used to - not because the cost of games has gone up.

Am I wrong? Has the cost of a AAA game gone up faster than inflation?

 

[Ravenpoe]

Have game prices really increased?

I thought that we've simply seen more and more AAA games, so while the price per game, and the price per entertainment hour hasn't increased, the number of games at that price (and thus the number of hours that could be played) has increased.

Thus a player committed to playing 40% of the available AAA games will see their total game budget go up per year, but that's because there are more games, and they are playing more games than they used to - not because the cost of games has gone up.

Am I wrong? Has the cost of a AAA game gone up faster than inflation?

In this instance, Krisken was talking about tabletop miniature games, not video games. Though, he didn't specify, I just happen to know what 'his hobby of choice' is.

 

[Krisken]

Have game prices really increased?

No. I'm saying the game companies know better than to increase the games because they don't want to price their target demographic out of the hobby. Hence me writing " It also applies to the concept of not pricing the hobby outside of the target demographic".

I was agreeing with you, thus the "Right". The point of my post was how a hobby company can miss step and begin to lose their demographic by failing to see the negativity of the trends.

 

[Bubble181]

In this instance, Krisken was talking about tabletop miniature games, not video games. Though, he didn't specify, I just happen to know what 'his hobby of choice' is.

He did mention "40K" in there, so I figured it out too

No, computer/console games haven't increased in price faster than inflation. Some other hobbies have, and they see people leaving over the too high prices.

 

[Bowielee]

Going to hell in a hand basket and dying a slow death. Unless you say so in which case you're wrong and the game industry isn't slowing down and is growing greater than ever. At least that's my understanding after reading this thread.

Is anyone else as confused by this post as I am, or do I just need to get some sleep?

 

[Covar]

I'm always confused by my posts.

 

[strawman]

 

[figmentPez]

OK, I have to concede, yes, the cost per unit is basically negligible when the initial investment is recouped.

And that wasn't the case back in the 1980s. Back then the cost per unit was a significant portion of the price of a game, and putting units on shelves was a riskier venture than it is now. Of course, marketing campaigns are more expensive than they were before, but that's not a fixed cost per unit.

 

[strawman]

The xbox one kinect will use a custom port on the xbox, preventing hackers easily connecting it to windows or other computing devices. Microsoft indicates they will release a special version of the new kinect that will connect to windows computers, but you'll need to spend $400 just to get into the developer's program for it.

Expect a lot of frantic hacking reports regarding the new kinect sensor shortly after the one is released.

 

[Bubble181]

Yeah, I read about it and wept. Not because I'm even interested in hacking a kinect, but because it's such a futile and irrelevant gesture. Giving the Kinect a USB-plug and saying "hey, you can buy it separately for the PC too, for just $129" or something would've been a smart move. Trying to keep it proprietary by using a different plug? Ridiculous, useless, non-effective. More trouble for regular users, especially once some cool new things are done with the Kinect (as they're already doing with the 360 one) and people want to use it.

"Hey guys, you want a game console, well, I'm forcing you to buy this other gadget too! And you can't use it for what you want, either!"

Seriously, is there anyone who grasps the modern user at all in MS Marketing?

 

[Gared]

Yeah, I read about it and wept. Not because I'm even interested in hacking a kinect, but because it's such a futile and irrelevant gesture. Giving the Kinect a USB-plug and saying "hey, you can buy it separately for the PC too, for just $129" or something would've been a smart move. Trying to keep it proprietary by using a different plug? Ridiculous, useless, non-effective. More trouble for regular users, especially once some cool new things are done with the Kinect (as they're already doing with the 360 one) and people want to use it.

"Hey guys, you want a game console, well, I'm forcing you to buy this other gadget too! And you can't use it for what you want, either!"

Seriously, is there anyone who grasps the modern user at all in MS Marketing?

Speaking from experience of working there for 2 years as a PM? No. No there is not.

 

[Bubble181]

Speaking from experience of working there for 2 years as a PM? No. No there is not.

Having been reading your posts for well over 2 years, I knew that, and asked a rethorical question

More generally, though, marketwise, I thought we were finally getting past the whole proprietary hardware thing and slowly moving towards "consumer friendly" thing. See also: cell phone chargers, camera chargers, pretty much anything using USB these days.

And, in case people weren't aware - both cell phones and cameras are being legally bound to use one simple connector for chargers by the EU starting 2014 or 15. Europe actually being useful, it had been quite a long time

 

[strawman]

And, in case people weren't aware - both cell phones and cameras are being legally bound to use one simple connector for chargers by the EU starting 2014 or 15. Europe actually being useful, it had been quite a long time

Sadly (for you) all the cell phone manufacturer must do to comply with the law is include an adaptor. Apple, for example, isn't going to add micro USB to their mobile devices, nor replace their lightning connector with it.

http://arstechnica.com/apple/2011/1...b-adapter-complies-with-eu-charger-standards/
http://www.phonearena.com/news/Appl...-EUR-19-Lightning-to-microUSB-adapter_id34443

So the legislation really has no teeth. Carrying around a custom adapter isn't any different than carrying around a custom charger.

 

[Ravenpoe]

See also: cell phone chargers, camera chargers, pretty much anything using USB these days.

See also: the best selling cellphone still refusing to use anything other than their own plug, and even changing it with their most recent iteration so the million chargers already in existence no longer work.

 

[Gared]

Sadly, over here we're only half moving toward consumer friendly hardware. Sure, we have all sorts of things that can be charged with USB jacks now, but we're still constantly introducing proprietary and otherwise restrictive hardware. All of the carrier-restricted smartphone models, for instance. And with what seems to be a once-a-week patent lawsuit over some bit of hardware or another, companies trying to ban their rivals from being able to sell any new hardware in the country, etc.; it doesn't look like that's going to go away anytime soon.

The marketing thing really just baffles me though. Sure, the marketing department had a true failure on their hands when they tried to run the "I'm a PC" campaign to diffuse the success of Apple's "I'm a Mac, and I'm a PC" campaign, and they certainly didn't do any better with the Internet Explorer 8 "private browsing" ad campaign (apparently people looking at a browser and then puking all over themselves doesn't sell tech, who knew?); but for Microsoft to lay off the entire marketing department in one fell swoop, only to replace them with a whole new crop of marketing geniuses who fail just as badly? That takes a special kind of talent.

 

[Covar]

Can we all agree that no USB standard that's omni-directional (meaning it doesn't matter which direction the cable is facing to work) is incredibly frustrating, and in this day an age, pretty ridiculous. It's an incredibly stupid frustration that has no place in the world.

 

[Bubble181]

Eh. Carrying an adapter is already something a lot of people do - unless you forget we have like 10 different power outlet sizes and shapes over here

Carrier-bound phones are illegal in Europe.

For the rest...Well, one can dream

 

[Gryfter]

http://kotaku.com/the-man-in-charge-of-xbox-is-leaving-microsoft-635426652

Hmmm, scapegoat?

 

[Covar]

The marketing thing really just baffles me though. Sure, the marketing department had a true failure on their hands when they tried to run the "I'm a PC" campaign to diffuse the success of Apple's "I'm a Mac, and I'm a PC" campaign, ...

I thought the "I'm a PC" ads were great. Several years late to the party, but good ads. If they actually had run then while Apple had it's "I'm a Mac" campaign I think they would have done their job well. Certainly better than Bill Gates and Jerry Seinfeld shoe shopping.