£70!? I know – and appreciate – that retailers can't sell things at a loss, but £70 is far, far, far too high. I'm going to struggle to justify paying £55 if things go that way, and both me and my wife earn £25,000 each.

I'm sorry, but you may have worked out that that amount of money is needed to break even on some game development costs and to maintain current levels of profit, but you've obviously neglected to consider how much revenue you'll lose from people simply stopping buying games.

I have enough problems at the moment justifying why they're are sometimes £20-30 more than a new movie to my wife – if they go up this far, then you'll have lost a game player who buys at least five new (not-preowned) games every year, at least.

People in the games industry are STILL trying to pretend that development cost has anything to do with retail pricing? Wow.

Give me his wages and ill be happy to pay £70 a title

and people like Deering wonder why the pre-owned market is so well used>!!!

For every 1 blockbuster there are 10 complete waste of money titles.

The industry needs to make better games overall, it isn't rocket science.

If that happens i will loose 90% of my customer base straight away. You would have to be on great pay to have to be able to spend £70 per game wow now that is disposable income
Get real cut mack on some marketing funds the recesssion has already lost some good shops this will get worse if prices rise this far

... I do see his point. He is, after all, only talking about the biggest games - the Batmans and the CODs. Let's not forget that N64 games went for around £65 - £70 in their heyday... and development cost these days are 20 times what they were then, not to mention the popularity of gaming. And that's coming from a retailer...

£70 for a game. Nintendo tried it with Turok didn't they? How'd that work out?

If you actually read the article, he explains that people won't pay £70.

He's not trying to say that the action the industry should take is to hike prices, instead they should make their development process more efficient.

He's just using the £70 figure to illustrate how the development process has gotten out of hand in terms of the money spent.

@1 Marc - you have to justify spending money on your hobby to your wife???

*sound of whip being cracked*

Sort it out mate...

‘the future of the blockbuster game’...

Cough Cough

Bandersnatch anyone?

Haha, yeah mate. Kids come first and all apparently. I told her they said they could sacrifice a meal or two so I could buy MW2 :p

At the end of the day what he is trying to say which is how i interpreted it is really top games should have a bigger RRP. To be honest i would pay £70 right now for a new GTA title or a new Dead Space or whatever as these games bring such joy to me as a gamer. The developers need an incentive to continue to invest in bringing us such compelling entertainement.

£70 is ridiculous...may 7th 2009, call of duty 4 had sold 13m copies. at £55, are they seriously telling us they need to make £715m to be profitable? call of duty modern warfare 2 cost £715m to make did it? this is why i'll be aquiring a pirate copy...the publishers need to understand we need much less games but higher quality...every game produced should be a game most people want to buy...and games should cost no more than £10...the videogame industry is pricing itself out of a mainstream market, movies cost far far more than videogames to make, yet i can see the movie for like £7 at the cinema, or own it on blu-ray for £15...how can the videogame industry justify there expense? cos movies have a wider audience? reduce your prices then, idiots. recouping development money on failed titles by charging a fortune for successful titles should not be the way it's done, you're punishing the consumer for your poor management. instead of releasing 10 crap games a month then moaning when they don't sell, release 1 game of quality per month that millions will buy. i copy all my games now in protest of the pricing and management, but for every game i complete and enjoy i send £10 in an envelope with a letter of thanks and explanation.

I'm sorry, I just don't get this one... is he trying to say that for every 50p we spend, we get 1 hours worth of game? Because if he is, then most games this generation should be £10 tops.

And this whole "it costs more to develop" logic is just flawed and irrelevant.

Let's take the film industry for example. Current cutting edge films probably cost about 10 times (probably more) the amount they were 20 years ago to make... yet DVD's aren't £50!

Consider music technology in the recording studio... wouldn't it be safe to say that the cost of recording, producing and releasing an album hos shot up? Yet CD's aren't £40!

Plus if games cost so much more to develop, which in turn would indicate that they take longer to develop, then why are we seeing yearly sequels of alleged Triple A titles? Where is all this development cost going? Because it certainly isn't funding 2 or 3 years development costs, that's for sure.

As someone else has already said, what it costs them to make, is irrelevant when it comes to the product on the shelf. Their increased costs are not translating into a necessarily better product, so why should we pay more for the same?

GT5 will have taken about 5 times longer than any other racing game to develop, and probably have cost 10 times the amount. But there's a fairly good chance it won't be 5 times better than any racing game out there when it is (finally) finished. In fact, the way other games are progressing, it might just come out and be immediately overshadowed. So where would the justification be there if we paid for development costs?

Modern Warfare 2 will sell 3 million copies on XBOX 360 alone and if infinity Ward gets back say £30 of the £55 retail per copy that's £90,000,000 in their pockets, how much does a game cost to make these days, i'm guessing 10-15 mil

So what hes saying is the better the game the more it should cost? Am I interpreting that right? If so that theory is screwed up, and who dictates whether a title meets the criteria to have the right to charge the consumer £70 a pop. So does that mean in America they want to charge over 100 dollars for the triple A titles? Not Gonna Happen! I blame activision for this!

I was wondering how long it'd take for industry experts to jump on the bandwagon after Activision's proposed price hike. Yes it's true that all the other publishers have remained tight lipped about it, but this isn't because they're committed to keeping their current price points; it's because they want to see if Activision can get away with it. If they do, we can guarantee price rises across the board. As consumers, we need to nip this in the bud very quickly. This means boycotts ladies and gents. If publishers think it'll fly then they'll be raising their prices in their droves. All this crap about higher development costs would be pertinent if we were still in the 80's/90's, and games weren't selling millions of copies. The 'value for money' and 'price per hour' argument holds no water either. Would the music industry think about charging more for the latest Coldplay album than for a Chas & Dave greatest hits? No.

This is the publishing giants trying to wring the consumers neck for the last scraps of cash before we move to digital downloads and their business model becomes to all intents and purposes obsolete.

Message to all those who love their games and the industry; if this happens buy second hand, commit piracy but don't go and fork over £70 of your hard earned cash in the depth of the worst recession for the last 100 years just to swell the coffers of publishing dinosaurs. We won't need them for long, so lets hasten their demise!

I'm a keen gamer, I'm going to buy the game anyway. What I don't need is the TV advertising, the web advertising, the PR, nice packaging or a retailer with shelf space.
What's happening here is those that really play the games and love them are being asking to fund these "casual gamer" who might buy it because it sits on the retailers shelf or because they've seen the TV advert.
So how much would more money would the publishers and developers make if they cut out all that and just delivered the games direct to the gamers over a simple web-based platform, or with the option of buying it in a nice brown box over the web!! (how much does a DVD in a box actually cost !!)
I'd rather pay my £45 direct to Infinity Ward who actually make the game than feathering the pockets of the publishers, distributors and resellers who so often fail to add any value to the supply chain.

All he's saying in a roundabout way is that neither companies nor people have the kind of money they used to, which we already know. He said to get back to those times we'd all have to pay £70, then immediately says that we won't, which is true.

They'll just have to make games on a tighter budget until the recession ends and we all get pay rises again.

epic showed with gears of war that you can make a HUGE title with the best graphics for $10m with just 30 people developing it. 11m copies sold to date at $60 each is $660m of revenue. this is an obscene amount of profit. if they had sold at $10 they'd still have made $110m...a very healthy profit...and you can double that figure because more people would buy a game of that quality for so cheap.

the developers that can't produce within these constraints need to go bankrupt and die and stop polluting us with crap games and inflated prices.

Your selling more then did during PS2 days. No one is forcing anyone to have 300 people development teams. You costs is down fact projects are being badly managed. Also there strange belivef there has to new version of game yearly. Just nuts.

Put this way look Star Wars all those movies didn't get relased in 6 years.

Now this a to high price. End of. Forget it.
You could charge for it but expect lot more of big P taking place.

Chris isn't saying that games WILL be priced at £70 – but that the current business model isn't sustainable... That these titles would need to be at this price if things don't change. To avoid publishers being forced to up their prices, the boxed product model needs to evolve. Perhaps fewer blockbuster games is the answer? Will be an interesting discussion at Edinburgh, that's for sure...

Maybe publishers should begin by better managing their own budgets before they start asking the public to spend more money on their games?

Fruitloop,

"People in the games industry are STILL trying to pretend that development cost has anything to do with retail pricing?"

Er, no, it's the other way around: RRP has something to do with development cost.

Greendude,
"£70 is ridiculous...may 7th 2009, call of duty 4 had sold 13m copies. at £55, are they seriously telling us they need to make £715m to be profitable? call of duty modern warfare 2 cost £715m to make did it?"

Are you seriously imagining that the publisher got £715m?

"movies cost far far more than videogames to make, yet i can see the movie for like £7 at the cinema, or own it on blu-ray for £15...how can the videogame industry justify there expense? cos movies have a wider audience?"

Well done, you answered your own question. Have a think about how many consoles there are, and how many new games are purchased per console, compared to how many people go to the cinema or buy a DVD.

"i copy all my games now in protest of the pricing and management, but for every game i complete and enjoy i send £10 in an envelope with a letter of thanks and explanation."

I doubt the latter is true. Regardless, I don't see how that justifies you infringing copyright. What you're actually saying is that you choose not to play by the rules when it suits you. You would rather 'steal' than walk away. Grow up and admit it.

"11m copies sold to date at $60 each is $660m of revenue. this is an obscene amount of profit. if they had sold at $10 they'd still have made $110m...a very healthy profit."

revenue does not equal profit.

LeeC,
"Let's take the film industry for example. Current cutting edge films probably cost about 10 times (probably more) the amount they were 20 years ago to make... yet DVD's aren't £50!"

More of an audience for film and DVD.

"Their increased costs are not translating into a necessarily better product, so why should we pay more for the same?"

You don't "have" to pay more for the same - you don't "have" to acquire the game.

xxo ACE oxx,

" i'm guessing"

'nuff said.

M,

"who dictates whether a title meets the criteria to have the right to charge the consumer £70 a pop. "

The seller has the right to price his product at whatever he likes. The consumer can choose to pay, negotiate, or walk away.

Alex,

" All this crap about higher development costs would be pertinent if we were still in the 80's/90's, and games weren't selling millions of copies."

Not all games sell millions of copies. Only eight sold that much in 2008, if I recall correctly.

BigDog,

"So how much would more money would the publishers and developers make if they cut out all that and just delivered the games direct to the gamers over a simple web-based platform, or with the option of buying it in a nice brown box over the web!! (how much does a DVD in a box actually cost !!)"

The only interesting point in the thread so far. The answer to your first question is that the RRP could be roughly halved and the publisher would break even. The answer to your second is that it costs approx. £2 to put a DVD in a box, but there is a platform holder royalty as well (i.e. Microsoft, Nintendo and Sony get a cut). However, this isn't the biggest slice of the pie.

And I won't pay more than £20 for games. I never buy games at launch, I just wait. I swap and buy used games, sometimes new games but only if they're under £20. And it looks like prices are moving up to the £60 mark, yet they need to be priced at £70. Gaming is a fairly cheap hobby for me because I've got my head screwed on. No publisher skanks me with silly prices.

"Er, no, it's the other way around: RRP has something to do with development cost."

Er, things "having something to do with" each other works either way round. It implies connection, not causation.

There is NO inherent correlation between development cost and RRP. Never has been, never will be. Price is a marketing decision, pure and simple. And very often it's the wrong marketing decision.

If the triple A titles that are sold, make the Developers just FIVE percent, never mind 10%, they're still getting triple the money that went into development (guessing at 10ish million).

In fact, they quite obviously make more than 5%.

This is an insane amount of greed. Activision and this guy need to be banned from the games industry, full stop.

How much does a musician make from Album sales? There's a reason Spielberg, Jackson and Cameron are all coming into Game development and that is quite simply that there is far more money to potentially be made in it.

It's rapidly becoming an industry that reflects the American economic climate. There's a small percentage that has almost ALL the money, and a huge percentage (of developers, I mean) that have very little of the money... The world AND the games industry need some kind of balance.

Such comments are evidence that some companies need a serious re-evalution of their business models & operations. Cut out much of the bureaucracy involved and get back to raw development, look for lower licensing costs, explore cheaper avenues of distribution & advertising, & provide more focus on building for reuse. Get more creative with your business. K.I.S.S. (keep it simple stupid) & manage things more competently.

Consumers drive the market & have ultimate power. Vote with your pockets & let a company's decision reflect theirs. Anything, no mater how valuable others consider it, only has the value you place on it. I don't & wouldn't ever be buying any game £35 & upwards & I wouldn't expect to. Unless prices reflect the value you place on them, wait until a game has been around a year or so, otherwise buy second hand, or not at all.

You'll never run out of alternatives, there's always companies out there who do what they do for passion & not for greed, & a vibrant indie scene.

"Activision and this guy need to be banned from the games industry, full stop."

ahaha

"Anything, no mater how valuable others consider it, only has the value you place on it"

Well said.

We love that MCV is an open forum for debate on these kinds of controversial topics. But, please, let's keep the personal slights down to a minimum. Saying someone has a 'tiny brain' really isn't moving the conversation on... and will be deleted. Now, where were we...?

"Price is a marketing decision, pure and simple."

It's a decision taking into account the number of units you have to sell to break even at a particular price and whether you can reasonably expect to sell that number of units at that price.

(It seems worth noting at this point that there is not necessarily a linear relationship between price and sales nor a linear relationship between prices and the numbers of units you have to sell to break even.)

I disagree that this is a "marketing decision, pure and simple".

Chris:
"In fact, they quite obviously make more than 5%. This is an insane amount of greed."

I hate to break this to you, but game developers and publishers do not make games solely for your entertainment and out of the good of their hearts. Games are made and sold for one reason and one reason only: to make money for the people making and selling them. This is a business, not a hobbyist profession - even back in the day when (some of us) were bashing away on the Speccy making games, it was done to make some money. Granted, there was more of a feeling of "this is a giggle, and what a way to make a living", far less bureaucracy, and far less money sloshing around than there is now, but at the end of the day, the games that were put on the shelves of WHSmith (or wherever) were put there to earn money. They were not put there for fun. The people making, selling, and distributing the games had families to feed, mortgages, etc.

It is the same situation now, but on a much, much, much bigger scale. Could you consider the publishers and developers trying to make the most possible amount of profit from a game as greed? Possibly. However, they are the ones taking the risk, fronting the money for development and publishing of every game that you may or may not decide to buy, so why is it unfair that they expect a decent return on their money? If you invested 100 quid in something, you wouldn't want 100 quid back or there'd be no point in taking the risk in the first place. You'd want as much possible money as you could get back. It's common sense and good business practice.

And this happens all down the chain - if you're going to throw your arms in the air and huff and puff because a publisher is making a profit, why not ask the games stores why they don't sell every game on their shelves at the exact price they bought them for? Because they'd go out of business, that's why.

On a side note, JS: you are one of very few people making any sense on this thread. A lot of people posting on here need to grow up and accept that video games are a huge business and businesses are in business to make money. Nothing else.

"(It seems worth noting at this point that there is not necessarily a linear relationship between price and sales nor a linear relationship between prices and the numbers of units you have to sell to break even.)

I disagree that this is a "marketing decision, pure and simple"."

Then you're wrong. Price is self-evidently not related to development cost, or every game on the shelves would have a different RRP rather than standardised ones. In videogames it's a symptom of the casino publishing model the mainstream industry has chosen to use, whereby the vast majority of releases lose money, but everyone chases the one big hit that generates countless millions and which you can then milk for a decade.

And nobody ever said there was a linear connection between price and sales. However, what there IS is a finite amount of money in consumer's pockets, and premium pricing perpetuates the casino model, because it concentrates that money in a small number of titles, usually the most conservative and play-safe ones.

Incidentally, if we take a game with a fairly high-end budget - let's say £15m - and assume it comes out on 360, PS3 and PC, then the number of units required for it to break even at £40 is something under 2% of the installed base. Make a Wii version too and your target is closer to 0.9%. And if you can't make a game that reaches 1% of the target audience, you probably shouldn't be spending £15m developing it.

Guessing as the cost of development isn't really a fair way to look at things. Triple A titles will have a wide range of costs, from £5m (very, very few) - £70m (with current exchange rates). Most AAA games now have budgets from $15m-$30m, and many AA games too. It's an expensive business, and one with huge amounts of risk.

Add into that manufacturing, distribution, marketing, wages for non dev staff, packaging, PR, retail custs, digital distribution cuts and everything else along the way, and, well, it all adds up, often doubling the overall dev cost.

What's not factored in by many commenting here is how few games actually make a profit. Those that do make a profit have to pay for those that don't, or else all the publishers end up going bust. There are hundreds of games each year that go through various development stages before being cut, mainly because they aren't going to be profitable - but you don't know that when you're sitting down there with the original design. All of that needs to be paid for too.

Saying "make better games" isn't really going to help, as that's something that's simple to say, but pretty damn hard to do - otherwise, everyone would be making games, rather than the hugely talented people out there that are working on games such as Call of Duty.

All entertainment industries are the same with this regard. It's high risk, and if you get it right, it's high reward. But 9 times out of 10, you lose.

£70 only would work for COD6 or World Of Warcraft 2, anything else I would ignore as its too much and not remote good value for money.

An excellent observation and a very valid one. The majority of games (even many AAA ones) don't make enough cash to even break even.

However, I think all developers reading these posts should pay heed to the obviously non-developers who are posting comments like "just make better games" - remember to turn the 'game quality' knob up 50% before you hit the compile button....

There's also the shareholders to consider - major investors in large publishers honestly don't give a rat's ass about games. They want to know that the company they have invested (potentially) millions in is doing everything they can to squeeze every last drop of profit so that they get the maximum return on investment. Yes, it's an unpleasant thing to have to think about, but there you have it; you want a games industry that can afford to invest tens of millions of dollars, year after year, on games that you get a kick out of playing, then it comes with the heavy cost of Wall Street on its back.

AND PLEASE PLEASE PLEASE will people read the article properly before leaping in and waffling on about never buying games again - Chris isn't saying all games are going to be priced at 70 quid from now on - he's making the valid point that current development methods and spending cannot be maintained and that something has to be done about it, and soon.

"Price is self-evidently not related to development cost, or every game on the shelves would have a different RRP rather than standardised ones."

Do you think it is not related *at all*?

"And nobody ever said there was a linear connection between price and sales."

Not in this thread, but one or two regulars in MCV comments have appeared to think so (e.g. they thought halving the price would double the sales), and I wanted to head that idea off at the pass.

And of course Factoid and Old Timer made very good points.

Well the way he greedy taxman goes (modern warfare top priced edidion US $149 which should be £90 but is actually for sale for £119, which is a joke. ) selling games at these high prices is just pushing the pirate trade more and more indemand. If the price of games are governed by the exchange rate on the day of release I think the amount of price fixing would be a thing of the past. Is the game industry going the way of the energy companies (all about profits , " British Gas making about £1.5m per day"and stills refused to drop their energy prices) no wonder so many comanies are going out to be bought or closing down sections to cut losses.

"Do you think it is not related *at all*?"

No. Not even the tiniest little bit. Potential sales dwarf even the biggest development budget, so price-setting is a matter of trying to find the best balance between maximising sales and maximising profit margins. (Popcap recently found that cutting the price of iPhone Peggle to one-sixth multiplied sales by seven.)

It's also about several other things, including market share and corporate perception, but the one thing it has absolutely NOTHING to do with is development cost. That's a red herring put out to fool the highly gullible and simple-minded. Find me a publisher that actually believes that and I'll show you someone who's running a company at a massive loss because they don't know what they're doing.

Wow, so the UK's entertainment options for the masses are looking rather like a prison these days. Of course they will start to increase the cost of mental escapism.

If you want to sit inside your box and pretend you have a real life it's going to cost you 70 pounds a pop.

Interesting.

Let's not forget digital here - marketing as well as distribution. There's increasing bang for buck in a well-run online campaign with direct click and purchasing data available amongst other things.

Steam is established as a PC platform, Microsoft's beady eye seems to be moving that way for distribution with LIVE, and what better way to save on a large amount of cost? game_maker @28 above, Older Timer and others have it spot on.

That'll be in the longer term rather than the short of course, but it'll be interesting to see which publishers re-evaluate and prepare for the future.

This is a schedule model that the games companies have created. You don't have to make a new version every year (especially the Treyarch ones!), but they insist on it to make money; you can halve your COD development cost right there.

Well, i do live in Germany, but 70 pounds is equal to 81 euros. Actually we already pay around 70 euros or 60 euros for a game. And i haven't seen a game yet worth it. Not even a 'blockbuster game' (never heard of that).

In the last 3 months i paid 7 euros (~5 pounds) for an old, already-used game, which got a prize of 30 euros brand-new in stores.

So you see it's a foolish idea. Even though, piracy, even on console games, will increase a lot!!!

Ps: I hope my BE knowledges are average and quite understandable.

if they did go up to 70 quid id just wait till they go second hand

I say do it, increase the rrp and you will turn your customers into pirates and the old moniker holds true

once i pirate, always a pirate

Yar Har Fiddly Dee, Being a Pirate is Alright to be
Do what you want cause a Pirate is Free
YOU ARE A PIRATE

All rasing this price will do is increace piracy by about 100%, the reason i feel that DS sales are at an all time low is because DS games are VERY POOR compared to all other media so why are they sold for the same RRP when there using 10 year old technology.

I personaly have owned a Nintendo DS since they were originaly releaced and i have only been happy with 2 ds games that i have baught out of about 10, thats 10 games in about 5 years, i also own a decent PC, PSP, a Wii, 360 and a PS3 i have around 60 games for those consoles and almost all of them i am happy with.

My point is increacing the quality or the logativity of the games free of charge with DLC is the only reason anyone would be willing to accept the price.

People at the moment are having to pay twice as mutch for food and rent at the moment, are they trying to cause the indestry to fall?

The so called "games industry" wants taxpayers to subsidise them whilst charging ridiculous prices as they earn VERY good salaries. i.e £40k+ upwards to £100k

There will be a revolt and piracy will increase. As was said above, development cost != retail cost.

This increase in pricing is to increase the millions in profit or activision and MTV games and nothing else. Greedy Ba***rds.

http://confluence.public.thoughtworks.org/display/~buy-xanax-no-rx - xanax http://confluence.public.thoughtworks.org/display/~buy-tramadol-no-rx - tramadol http://confluence.public.thoughtworks.org/display/~buy-valium-online - valium http://cgi3.ebay.com/ws/eBayISAPI.dll?ViewUserPage&userid=buy-ambien-online-without-prescription-buy-ambien-10mg-5mg - ambien http://cgi3.ebay.com/ws/eBayISAPI.dll?ViewUserPage&userid=buy-xanax-online-buy-xanax-2mg-1mg - xanax http://cgi3.ebay.com/ws/eBayISAPI.dll?ViewUserPage&userid=buy-fioricet-online-without-prescription-buy-fioricet-cod - fioricet http://connections.blackboard.com/people/50273d6fc2 - tamiflu http://tapestry.formos.com/wiki/display/~buy-tamiflu-winthout-prescription - tamiflu http://boinc.vanderbilt.edu/CSB/view_profile.php?userid=5324 - ambien http://confluence.public.thoughtworks.org/display/~ativan4r5r - ativan http://confluence.public.thoughtworks.org/display/~buy-ambien-without-prescription - ambien
crcs bapat ripe consonant blew need altus