Budget Software Market

Once upon a time there was a very clear line between full price and budget releases – basically, anything under 20 was a budget title, and generally these were republished outings.1

But today more and more companies are blurring the line between full price and budget.

In the last year, we’ve seen the likes of Ubisoft’s Just Dance and Pure Football plus Namco Bandai’s Clash of the Titans hit shelves with a lower price point on day one. Is this a sign that the definition of a full price release is changing?

I think it is a sign of a maturing market and simple market forces,” says Mastertronic MD Andy Payne. I think game makers are pricing their products according to what they think they are worth and what a particular market demographic will be happy to pay.

There should not be a standard SRP across the board. Some products are worth considerably more than others – you don’t expect a standard price for a gig ticket or a book, so why should you for a game?”

Avanquest’s European games director Simon Reynolds adds: It is great to see so many good titles coming out at more affordable prices. Our games offering has always been based around value for money and we welcome other quality titles being released at these price points.

Consumers can’t always afford 35 to 40 for a new release, so to have a bigger selection of quality titles at lower prices can only help grow the market and encourage consumers to keep coming back for more.”

Focus Multimedia’s PR & marketing manager Alan Wild counters this, warning that the flipside is we’re effectively educating consumers into expecting a lower-priced commodity”.

This isn’t helped by the fleeting window in which games hold on to their RRP of 50. For the last couple of years, the biggest games have found themselves reduced to less than half of their price before even racking up a month on shelves.

Titles are now driven very quickly through their respective price points,” Wild continues.

This could be a shift in how consumers purchase, although driving prices down conveys a strong message to consumers to purchase at lower price points rather than at launch.”

Supermarkets have played their part in this, with heavy-hitters such as Modern Warfare 2 and FIFA 10 debuting in Tesco, Asda and Sainsbury’s at around 25.

However, publishers of traditional budget games have actually benefited from the increased awareness of games in grocery outlets.

Working closely with the retailers allows us to ensure we are well represented with a range of titles that will appeal not only to avid gamers, but also to their friends and other family members,” adds Wild.

Reynolds offers: Where retailers carry out loss-leading promotions, we clearly benefit in the exact way you would expect us to. Their high profile promotional campaigns drive traffic into stores and we benefit from impulse purchasers buying products that they wouldn’t otherwise have bought.”

Naturally, there are other factors bolstering the budget market – principally the casual sector. While this market may be declining on certain formats, it still holds strong on PC and is an area value publishers have been able to sustain themselves with over the past year.

With the decline in the number of big, full price games releases, there have been fewer titles available for budget publishers to licence, so the casual games market has been a breath of fresh air,” says Reynolds.

It provides a much broader audience to target and a much more regular purchasing cycle than traditional hardcore games.”

Payne agrees: We have seen the rise of the more casual style entertainment products over the last year, including puzzles and match three-style titles. There is an appetite for these type of products mainly at supermarkets – particularly Morrisons.”

The full-price games market may be suffering from the economic collapse, but the budget publishers are thriving – especially those that sell more than just the typical casual games and offer a range of useful but affordable software.

Budget games are even performing well on digital platforms, boosted no doubt by the perception of lower value associated with the lack of physical product and the instant accessibility through platforms such as XBLA, PSN and various PC digital distributors.

With the digital arena across all formats, games companies have more direct control over pricing,” says Payne.

Consumers can choose which products they want and the pricing will reflect pure market economics rather than inane market share grab tactics seen by some retailers, which erode the commercial reasons for making games in the first place.”