I don’t want to derail, but in fairness this wasn’t really what either I or @WastelandHound said in our posts. The point was that if you are already prepared to purchase a AAA game on release at full price, then a $20 difference is not decisive. It doesn’t mean $20 means nothing.
Now, that does still end up raising an interesting point. In my response, I was figuring a single case at a time, i.e., if I know that I’m going to buy X game when it comes out—I can find the $20 if I’m really interested in the game (if I lived a life where I wanted to buy a single game but simply could not in any way afford an extra $20, then likely I’m not spending any money on a game at that time).
However, if we’re talking about the bigger picture of say someone who buys multiple games per, lets say per year, and presumably budgets or has a rough idea of how many games they can afford to buy every year, then yes I think a $40-standard might start to make a difference over the longer term. E.g, if I buy on average 6 games a year, then saving $20 on each allows me to now buy 8 per year (this all assumes of course that the number of games I’m that highly interested in remains static, or doesn’t change enough to massively alter my budget). Now, I still have no idea if that would make any difference in growing the market, and it’s not directly relevant to your point about tapping a market of people who don’t buy games regularly, but it’s an interesting question.
So I have problems with the idea that games have become too expensive for the AAA industry and some kind of sleazy system is necessary to make enough money to make up for it.
It’s easy to take publishers and say it’s not true at the moment that games are too expensive to make to make a profit. You could say things like:
Big publishers like EA have been trying to make developing games as expensive as possible. They are pushing like no other to drive up costs for marketing, visuals and audio presentation.
EA has stated that the loss of micro transactions will not affect their earnings.
It’s been estimated that a digital sale earns a publisher/developer about twice as much money as a retail sale. With the increase in digital sales there should have been a major increase in income.
There are more gamers than ever before.
It’s easier than ever before to make a game platform compatible.
We have seen in sales lists that you can spend over a hundred million dollars on making a game, it doesn’t need to be the best game out there, and it can still make a profit. That is bizarre.
Some people say budgets for games these days are actually much lower than years ago.
The biggest publishers are the ones pushing these systems into our games, and they are the ones who would need it the least.
Etc.
The thing is we don’t know. We don’t know exactly what the numbers are. And even though I think these things add up form a bit of an argument it’s not necessary to make it. Because, and this is much more important in my mind: You don’t need to make a game that expensive. There are plenty of very successful games made that are not even half as expensive. (I even think that the desire to spend a whole lot of money on developing a game is not driven by consumer demand as much as it is a desire to stand out or to price competition out of the market or to make an even greater return on investment.)
And this desire to keep spending more money will always inevitably lead to publishers telling us that making games has become too expensive. So you can think of a temporary solution like using gambling tactics in their game but it won’t solve it. It’ll just happen again. It’s never going to be enough.
The consumer doesn’t have an infinite supply of money. Even if they use the perfect manipulative technology to sell their games to us this means that: Eventually they hit a ceiling.
So with these 3 things in mind I think the relevant question isn’t whether the most expensive games to make are too expensive to make at the moment, but:
How can a publisher try to hit the ceiling effectively?
Do we think those methods are (not) OK for a publisher to use, to try and hit that ceiling?
Are they hitting the ceiling already?
For clarification: What I’m saying here is that we should ask ourselves: "Is it OK for publishers to put in [deceptive sales tactics] in this game? Is it OK for us as a gamer? Is it OK for us as a human being?"
And publishers wanting or needing more money to make games isn’t a good reason to say yes, because we always arrive at that point, unless we’ll have hit the ceiling (at which point there is no point to implementing something crooked).
One small note on games going on sale prices over time and so this talk of $60 vs $40 being less relevant: by that metric, we already live in the world of $80-100 pricing. We should talk about lowering AAA game prices by $20 from their current level “down to $60 at launch”, which effectively is what I’ve been discussing under the talk of a move to $40.
You want to buy Forza Horizon 3 or Motorsport 7 the first day it’s available to the public? That’s the $100 Ultimate edition; if you pay $60 then you don’t get those first days of play - that’s effectively a sale price for those prepared to wait. Same things for Battlefront II, you either paid for EA/Origin Access to get 10 hours access and/or paid for the Deluxe edition that unlocked the game on the first day of public access. Paying $60 meant you didn’t even get the game until after the community reaction had completely changed the plans for how that game played - only a few days but days in which those who paid to play could use their informed view of how it played to shape a course correction. Some AAA games still ship with a $60 version on day 1 but certainly not all games and which releases don’t have $80 or even $100 additional editions on sale?
When I say games should move from $60 to $40, there will still be a $60 package on shelves (and all the prices will find further sales to increase volume over time) just as right now there are already $80 and $100 options. But it’s where the expected “just the game, but all the game” volume edition is, the one that gives you access to the game on the first day the public can buy it.
I still don’t know if I understand what’s going on in this thread.
It seems like one conversation is “what are alternative ways to make AAA development more sustainable without loot boxes?” Another conversation seems to be “make AAA games cost less for consumers!”
They seem rather antithetical.
“How do we avoid predatory sales scheme’s, gatcha unlocks, etc. from being used to squeeze consumers for all they’re worth, while also messing with unlock, progression, and customization systems?”
“What if they sold their games for 30% less, and relied more heavily on this stuff to stay in business?”
“Yeah!”
Maybe someone can help me parse what looks like two unrelated threads? Or are these ideas related? (Outside of how money is spent/made on games being discussed.)
The disconnect is the point of the provocation (which is a pretty classic for this topic in economics “what if, to make more money, we lowered our prices?”) in that very first reply.
The article takes “And yet, the money has to come from somewhere.” as an assumed truth (which some of the replies in this thread certainly push back against). What if, using economics, we actually tried to find that money without predatory practices. Some say unit prices have to go up (to find that money that’s otherwise coming from exploitative design/monetisation) but what if that’s actually completely wrong (thought experiment: AAA games retail for $1000 per copy tomorrow; do you expect the total revenue from AAA games to go up or down in response).
As games are now almost all digitally distributed (eg Ubisoft financials report 85% digital revenue) then unit costs approach zero and the economics becomes purely a matter of numbers (if every unit is profitable at even the lowest prices then you’re just looking at revenue maximisation mainly via market expansion). What would a long term view of growing the market for AAA games look like? How can we view things like the explosive growth of Steam in Russia (bigger than Germany or the UK for Steam) & China and consider a stable market that moves away from a hit-driven layoff-cycle AAA industry into something with a much wider consumer base that continues to grow the total market size (which has previously paid for the expansion of AAA in the last few decades). More diverse creators and products, focus on delighting potential users, lower prices, higher sales, no more exploitative monetisation.
I mean, I’m sitting here contemplating spending $5 on a Menat costume for SFV. It’s a good costume for a character that I play, and I don’t even have to try to get it out of a loot box.
I always point to League of Legends as well. Riot still makes limited edition holiday cosmetics and lets you buy them directly if you want. They seem to be doing alright. They’d no doubt be making MORE money if they forced people to gamble, but hey…
One point I’d like to add: a few people have pointed out that EA doesn’t think Battlefront 2’s lack of MTX will hurt their financial projections. I think that can be summed up in 4 letters: FIFA.
In 2016, EA had total revenue of $4.8b and a net profit just shy of $1b. They earned revenue from FIFA Ultimate Team of $800m. FIFA swamps everything.
The problem is, Dice and Motive have nothing to do with FIFA. It would be great if FIFA’s massive revenue meant EA was willing to take losses on other games, but I think recent history has shown that they aren’t, at least not significantly.
