Well, here’s a take you won’t be hearing on next week’s Jimquisition: KeyBanc Capital Markets analyst Evan Wingren believes that gamers are overreacting over Star Wars Battlefront 2’s microtransaction saga – and that publishers should increase the price of their software as they’re undercharging. We sure hope he doesn’t have a public Twitter account.
Here’s what he told clients in a report: “Gamers aren't overcharged, they're undercharged (and we're gamers). This saga has been a perfect storm for overreaction as it involves EA, Star Wars, Reddit, and certain purist gaming journalists and outlets who dislike microtransactions.” While the dogpiling has been intense, we’ll politely disagree with Wingren here – ever since Middle-earth: Shadow of War revealed its controversial loot boxes, this kind of backlash has been coming. Battlefront 2 is just the straw that broke the camel’s back, to quote an old cliché.
Wingren believes that the controversy will probably affect the title’s sales, with its 13 million units forecast now potentially in jeopardy. Despite all of this, he thinks the price of games is too low. “If you take a step back and look at the data, an hour of video game content is still one of the cheapest forms of entertainment,” he explained. “Quantitative analysis shows that video game publishers are actually charging gamers at a relatively inexpensive rate, and should probably raise prices.”
The analyst used maths to prove his point, explaining that at $60 for the base game and $20 in microtransactions per month, gamers who play 2.5 hours per day for a year are being charged roughly 40 cents per hour of entertainment. This, Wingren proposes, is cheaper than the 80 cents per hour most spend on television – or $3 per hour in a movie theatre.
But the flaw in his argument is that most people won’t play for 2.5 hours per day for an entire year, thus substantially bumping up the cost per hour. Moreover, many would argue that the way microtransactions are used may actually deter some from spending that amount of time with the title in the first place. Either way, EA’s clearly spooked – it’s already removed all in-app purchased from the shooter, and it’s also in the process of revising Need for Speed: Payback’s progression, which uses a similar system.
[source cnbc.com]
Comments 114
Wingren sounds like a bit of a tw*t.
A hilariously robot way of looking at it, which isn't surprising considering what analysts are meant to be doing.
Games are cheap relative to other forms of entertainment and perhaps prices should increase after all game prices have remained constant for years despite rising inflation. However, forcing microtransactions in the way EA have was never the way to go.
Either increase prices or use microtransactions for cosmetic items to recoup some of the costs.
Spoken like someone that's never picked up a controller in their life.
If games are expensive to make, then you have to budget your game accordingly.
Cosmetic microtransactions are fine. The microtransactions found in NFS Payback and SWB2 are not.
yeah he can f*** the right off (pardon my language)
i have said before games are becoming more expensive and i wouldn't mind paying a bit more to buy a game BUT what EA and others are doing with microtransactions and loot boxes is bull**** and is down right hostile to gamers
if i buy a game for £60 i expect a full effing game and the ability to fully access everything on that game without having to pay for random chance to potentially get access to something
loot boxes DO NOT belong in full price AAA titles, they should be banished back to freemium mobile games where they belong
I know this is an unpopluar opinion but I agree to an extent. New games have been $60 for 2 decades. How many other things have stayed the same cost for 20 years? That being said I hate MT's when down wrong but wouldnt be opposed to $70 or $80 games if need be to avoid them.
Nope and nope! It's 2017, life is hard for everyone...if developers spend a lot of money than make a good game, look at gta, they must be swimming in money! Anyway 70 euros is already a steep freaking price for a videogame...it's almost 100 euros man, please shut up
Prices have gone up in the UK, right? I never used to pay more than £38 or so for new PS3 games from Amazon — and now you're looking at £44-£50 for new games these days.
Of course, that may be down to other issues in the UK, but you get my point.
It’s easy to pick apart his argument. No one is buying a single game and playing it 2.5 hours a day for a year. Publishers would be happy if people are still spending money on their games after the initial purchase, and playing beyond a month.
What I find amusing though, is I don’t entirely disagree that certain games are underpriced (while others are overpriced). Games are cheaper now than they have ever been, and offer far more content than SNES and N64 games I spent $80 on at launch.
@FullbringIchigo Give this video a watch if you're interested: Video Games Are Not Too Expensive To Make
@redd214 Games were once €40, then they were €50, and now they're €60... On top of that, €50 in 2007 is about €57 today adjusted for inflation. So it's a myth that video game prices have always stayed the same. You also need to factor in the decrease in production costs; from cartridges to Blu-rays, and less storage space that comes with it, and even the transition from physical to digital. I'm certain companies make a lot more per game sold than they did 20 years ago.
edit: And I just want to add, I've seen plenty of games going for €70 on digital storefronts this year. Including Nintendo's Zelda, and I believe EA is charging more for Battlefront II too.
edit2: I just checked the store, Call of Duty, Battlefront II and FIFA 18 are all €70(!!), we're getting ripped off instead.
@get2sammyb Yeah, they've definitely increased. Fifa cost me £48 this year; Battlefront 2 was also marked around the same price, although I never bought that one. I never used to spend more than, say, £38 on a game last generation.
Reads title.
Brain automatically adds "said no one ever" at the end.
The release prices have gone up but the way they reduce down in price has also speeded up. Either prices go up further or gamers need to accept loot boxes and microtransactions within games.
As for games going up in price everything has been rising with inflation.
@get2sammyb Def gone up over the last decade, PS3 games I remember being £30 new, with the £40 bump being in early PS3 days.
Like, I don't buy games for more than £42 on launch, I struggle to see how people can justify £50-60 disc releases.
@Octane I have no clue about UK/EU prices just commenting on US prices. Mario 64 for the Nintendo 64 which was released in 1996 had a price of $60. Take that thru the PS2/OG Xbox gen, and into last gen and prices have stayed the same (at least on this side of the pond) for a long time. All of what you said is true not disputing that, but like I said I honestly cant think of many other items off hand that has stayed the same cost to the consumer for 20+ years. Bottom line is the current pricing structure isnt making either side all that happy so something has to give.
Quite a few games as it is are not even worth the current sticker price, and he wants them to increase? It is bad enough games already cost $80 here in Canada. They go any higher and that will turn away any potential buyers that might have bought otherwise.
Complete and total idiocy.
We pathetic gamers should be grateful they don't increase the games by a dollar every leap year. That's some sweet free game time we're getting, folks.
@redd214 I distinctly remember $50 being the norm last gen, even in the US.
You cannot compare the cost of N64 games with modern games, for the fact that N64 games were ridiculously overpriced because of the manufacturing costs of the cartridges, which were more than $30 per game[1], whereas CDs were only a fraction of that price, around $1-$3 per game.
So if you take this into account as well, this means that the maximum profit* of a $60 N64 game was $30 (assuming the manufacturing costs to be $30). Whereas the maximum profit of a modern game is $60 minus the printing of the Blu-ray (less than $1); $59. If the N64 games were printed on CDs instead, they could've asked $30 for Mario and they would've made about the same amount of profit per game sold. That's the number you should be looking at, not the over-inflated store price due to the cartridge costs.
[1]. https://archive.org/stream/NextGeneration24Dec1996/Next_Generation_24_Dec_1996#page/n75/mode/2up
edit: * just to clarify, with profits I don't mean the total profits for the publisher (e.g. EA doesn't earn $59 from every $60 game sold), I'm talking about the total amount of money that is left to divide between the publisher, platform holder and retailer after you factor in the production costs of the cartridge/optical media.
Evan Wingren should take up politics, when the big guys are being greedy blame the Peasant's.
We should gather our pitchfork's and boycott E.A.
He's kinda right, to an extent, but his reasoning is bogus. So he's right by accident, if you will.
He thinks that because games are priced too cheaply (they are) that gamers overreacting to the implementation of loot boxes in order to bump up the value (they're not). Gamers are right to kick back against this sort of thing because it's nefarious and underhanded, and trust me, if EA priced Battlefront II at twice as much, they'd still be trying to slip microtransactions in.
People saying games haven't changed since earlier years are missing a very simple point. The difference being that games sell MUCH MUCH more than they used to back in the N64 days etc even if thats a poor example.
Just like anything thats mass produced, the more you sell economics of scale come in to play and the price comes down/stays below inflation. Its simple economics.
Those saying a price rise is fair are totally ingoing that fact.
@JoeBlogs I know and I'm not that stupid either! But that isn't what I meant. The difference is that at most $1 is spend on the production of Blu-rays these days, and the rest ($59) is divided between the publisher, platform holder and retailer, and other parties, whereas the production costs of N64 games could be as much as $30. The result is that a lot less is left to divide between the selling parties, even though we, the customer, pay the same price in the store. So, not ''profit'' for the publisher per se, but the total amount of money that can be made from a single game if you adjust the price for the difference in manufacturing costs.
Utter bull plain and simple.
This gentleman obviously doesn't know the games industry at all. Micro transactions in full priced games should be abolished completely. It's fine in mobile gaming for things like Candy Crush and suchlike, but if I spend £45 to £60 on a full game (as it is advertised on the PlayStation Store), I expect to get the full game...not 80% of the game or massive restrictions in access to various pieces of content. It is an outrage for an analyst to get the overwhelming view of the consumer so very wrong. I'm glad he doesn't carry out market analysis for me, Id never sell anything!!! Lol
Games are super cheap. Being a console gamer, in particular, is an incredibly cheap hobby. Yes, knocking a ball around the park is even cheaper yet, but compared to many other past times it's cheap as chips.
So I say go for it, charge more for your games if it means we won't get microtransactions.
@kyleforrester87 I think the issue is that it will turn a lot more people off. I don't think anyone is worried about the price per hour of entertainment, or whatever this article compares it with,it's the price in general. $80 or $100 is a lot of money, especially if you're not sure you even like the game. That's even more true for the average Joe who has an even harder time to judge whether he'll like a game or not. We can see the Platinum Games logo, and that's all we need to know, but for someone who isn't aware of the developers behind the games, $80 is a hefty price.
That being said, I don't think the price of video games is an issue, at least not any more than it was 10 or 20 years ago. Either they were always ''too cheap'', or they were never ''too cheap''.
@Octane AAA ps3 games were $60 at retail man. Trust me I know lol. Same with controllers Dualshock 3's were the same price as DS4s are now at retail. Its seems prices fluctuate for you guys more over there then here.
PS1 games were $40-50, and PS2 games were $50,. So yes I was wrong in that regard when comparing Disc vs Cart games, but the fact still remains. Just looking at the last 10 years. Call of Duty 3 was released in 2006 and cost $60. Call of Duty WW2 was relaseed a couple weeks ago and costs the same. I get that gaming is a lot bigger as an industry now vs then but seems like we may be reaching another price hike. Milk, gas, cars, housing, etc virtually everything has gone up in price expect for games. Crazy when you think about it. I would love it if games stayed exact price they are now but I just dont see it happening and its obvious that devs/pubs dont see it happening either.
@solocapers I did think about that fact (gaming being just bigger now then it was in the past) but without any real data didnt really want to argue that point
@Octane Make better DLC and release it for €30 like Uncharted or Horizon €20 DLC which is worth the price.
@Octane Eh well when it boils down to people just moaning about paying more for something, or waiting for a sale, or buying it pre-owned, what can you do? But in the end I think a really high quality game with a £60-£70 price tag would sell itself. Publishers and devs need to really pull their fingers out and justify the higher costs with a high quality product. A big risk, still, for a lot of companies who can go under after one big failure. Tough times for all.
LOL games are too expensive - they release unfinished and with contend cut out and micro transactions built in - you never get a whole package when you buy a game nowadays. Oh and second - with the example of SWBF2 - you’d be better off watching those films than playin that game - cuz underneath that graphic there’s still the same shallow game from before. Maybe SW Fans get some out of it but everyone else has way better alternatives when it comes to shooters on and offline.
Depends how far you go back,in the good awld speccy and c64 days games used to be about £8 for full price and £2. For budget.
I am an old cnut.
@kyleforrester87 They may be cheap if you are working and still living with your parents.
Not speaking from experience but try and have a mortgage, 2 kids and both wanting a new game every month. Suddenly £80 a month minimum isnt that cheap.
Also the amount of actual punters has multiplied considerably in the last 20 years. That must offset the cost somewhat.
@Bobbycuckoo Absolutely: economy of scale
@solocapers Okay, and I can't afford to do my real passion which is BASE jumping. So should I complain that I can't afford it until they reduce the cost of that hobby or shall I just get a hobby I can afford instead?
My point is, you can't have your cake and eat it.
Yes, other forms of media entertainment are so expensive. I borrow a book from the library these days and wow, it's so.. well it's still free but still. Wait, what was his point again?
@kyleforrester87 Im not really sure I get your point to be honest.. your just jumping to a ridiculous situation to try prove your point.
Games like COD, Battlefront etc make MASSIVE profits as it is - and that was just with DLC on its own.
Attaching microtransaction's and pay to win BS on to these already heavily profitable titles is trying to have their cake and eat it.
I dont mind paying more for good quality titles but most of the time these yearly games that whore out microtransactions like fifa ultimate team etc are nothing more than a reskin and a touch up of the AI. If you think thats worth 70-80 quid a pop then fair play to you.
@Flaming_Kaiser Yeah, DLC is one of the solutions. The Witcher was effectively €90 if you factored in all the DLC, but even the main game had more content than the average game on the market today, so nobody had a problem with that. Just don't be... greedy... I guess?
@kyleforrester87 That's why I don't mind them focusing on smaller scale games. Look at Nintendo. I'm certain the development costs of their games, even their biggest games, are only a fraction of that of a ''AAA'' game. But realistic graphics are too important I guess! I've seen my friends argue about visuals as if that's the only thing that matters. Yet I they're in the same crowd that will complain if a price is too high, and they just pirate the game instead. What can you do?
@kyleforrester87 I think you do have a point, and it's good alternative view. Unfortunately, I don't think many games would survive with that kind of pricing structure.
Look at how quickly the likes of Wolfenstein and The Evil Within have had to come down to £25 — they're both considered extremely high quality games.
I'm not sure what the answer is really. I personally wouldn't pay more than £50 for a game, so I'd just wait if that's what it came to.
@solocapers without working for one of these companies I wouldn't know either way. My point is that if something has to give, I would rather prices increase and they stop pushing microtransactions. And not least because I'm absolutely sick to death of hearing about them.. lol
@get2sammyb @Octane Yes it just seems like we've reached a crunch point and things need to be reassessed. Whether that's scaling back budgets, or increasing prices, alternative revenue streams, or whatever comes next..
@kyleforrester87 Yup things aren't what they used to be anymore we need to reevaluate everything from top to bottom.
@kyleforrester87 "Games are super cheap. Being a console gamer, in particular, is an incredibly cheap hobby."
Cheap as in for the average person living in the UK? Just curious...
@WanderingBullet Like I said earlier to him, for someone living with their parents.
In the last year ive bought - PS pro - PSvr 4K tv - PS move controllers then games... Thats over 2 thousand pounds ive dropped in the last year before games and thats before paying for a house, car food and other outgoings.
Yea thats real cheap :facepalm: I dont mean to be disrespectful but its perhaps a relatively cheap hobby if you buy a couple of games a year at and buy the bare minimum. Otherwise its a sizeable chunk of disposable income and people with kids are even more hard pressed.
It's a complicated situation that analysts have been mentioning for years now. Because of the rising costs of production, it's only a matter of time before gaming companies need to place their new products under tiers or raise the cost of everything across the board.
Mo-cap, advertising, the 4K boom, virtual reality.....all these things are extremely expensive. You need a big studio, all the tech costs an arm and a leg (even if renting), and cheap actors can ruin every cutscene you make.
What I won't agree with, is gamers overreacting to lootboxes. It clearly shows people how anti-consumer a videogame can get.
@WanderingBullet Yes, that's what I mean. Bang for your buck, gaming is dirt cheap.
My other hobby is motorcycles, which is not exactly an " overly extravagant" hobby. You can spend £1000 a year on tires alone depending on how often you ride and the tires you buy. Warhammer? Rip off.
If game's price is increased, I just wait for psn discount.
@solocapers Lucky.
@get2sammyb last Gen in Canada new releases were $69 this gen new releases are $90. Prices have definately went up.
@kyleforrester87 Hmm, I think highly depends on which country you live in. Games might be considered cheap if you live in let's say the UK or the US but its not the same case for other countries but that's probably due the currency. Although, I heard games in Australia are very expensive.
@WanderingBullet but name me a hobby which gives as much entertainment for less, though? And that's even before you consider that you can regularly pick up quality games on sale for £10 and buy a console that'll last you 8 years for £200-£300.
If you want to kill console gaming off sure bang up the price, people that play on consoles are already having to pay more for a game than what you do on PC. In fact PC gamers sometimes get things for free where as on console you have to pay, so don't you think instead of charging console gamers more money for a game look towards the platform the same game is almost half price as you already know.
@kyleforrester87 Thats depending on your perspective Kyle though.
Some would say that trainspotting beings more entertainment - or listening to Spotify or watching Netflix all month. Both are much cheaper.
Value doesn't depend on how fun something is. Its how cheap it can be made while maintaining a profit.
AAA games like COD, Battlefront and FIFA etc which seem to be the biggest pushers of Microtransactions already make VERY healthy profits.
Its pure greed and trying to squeeze every last penny that they can get away with. These arent struggling businesses, these are very healthy businesses pushing for as much profit as they can. They're welcome to do it ofcourse but at the end of the day we're the consumer who can rightly vote with our wallets.
We shouldnt bend over backwards to increase prices just to appease their already well rewarded shareholders.
@solocapers Fair response - I agree, perspective is very important and being a gamer myself it's not always easy to see from another position but I still contest that objectively console gaming is a very good value for money hobby.
@kyleforrester87 Fair enough but those prices don't apply to every country. Plus, I don't think console nowadays will last you 8 years.
So honest question here. Do games really cost more than $60 million from creation to customer?
I only ask because even the worst AAA game usually sells 1 million before a price cut. Say after a price cut it sells another million which sounds reasonable you are already up to $100 million that has to have profit no?
Maybe the problem is that companies expect too much profit from any one product?
When I think about how many hours I spent on Monster Hunter titles (thousands!) I think yes, he’s right. Ridiculous value for money. But if you buy an expensive game and find it boring as I have with many purchases over the years, then that value is completely lost and you feel ripped off instead. So really it’s a very flawed argument that assumes every game purchased is worth hundreds of hours of gameplay.
@Splints That's the question really, is it pure greed or is there a genuine problem? It's not as if we don't hear stories of developers going under. Is that really just because the publisher rinsed them?
Whilst I am in no doubt that Video game development costs has risen over the years - they take longer to make, and staff salaries as well as overheads like rent, electricity etc have all increased, thus increasing the cost of the development of a game, that doesn't necessarily mean that their prices need to rise either.
A lot of games still turn out profitable and the 'big' releases make more money on their opening week than movies do and these movies cost more in general to make than games - bigger casts, bigger 'stars' with 'massive' pay cheques, bigger 'crew', location costs etc etc. Now I know movies are different in that they can get the bulk, if not all of their money back from the cinema before topping it off with Bluray sales, TV purchases etc.
That being said, a game can sell as little as 1-2m copies and still be profitable, still give a decent and AAA gaming experience etc. The problem though is 'greed'. Publishers want to maximise profits - making millions on game sales alone isn't enough - they want 'billions' from on-going purchases. They want to bleed their audience dry.
The way to maximise profits is to ensure your product is the 'best' it can be, to make a game that the majority want to play and not trade in (those that buy Physical anyway) and thus sell more than enough to become profitable. After a certain point, the sales become pure profit. Once they have made back all the money invested (inc all the advertising and production). It doesn't take a lot of sales - not considering the amount of gamers there are.
Granted these companies may need to sell more copies than they did 5-10yrs ago to be profitable, but the fact is that even without 'micro-transactions', the likes of EA, Activision etc are making 100's of $1m profit per quarter and Billions every year. Micro transactions allow these companies to make even more money whilst releasing far fewer games too. Fifa for example is incredibly profitable without the 'ultimate' team but Ultimate Team is worth $800m a year profit to EA on top of the Profits they make on sales.
Its absolutely disgraceful the amount of profit these Publishers make. I bet the figures will say we gamers are buying 'less' titles yet somehow, EA, Activision etc will still make record profits. I bet even Mass Effect: Andromeda sold enough to be 'profitable' but not enough to sell micro-transactions, keep the player buying extra content etc but I still bet the game sold enough to be profitable.
Final Fantasy 7 was and still is one of the top 10 most expensive games to make not accounting for inflation, if so its in the top 3.
I cant remember any microtransactions, digital sales or dlc.
Just saying.
If AAA games increased their retail price, then indie devs would probably get a lot more sales on their cheaper games due to people waiting for the AAA games to get cheaper.
@BAMozzy Nail. Head.
Also to those using studios going under as a possible sign that a price increase is required:
Businesses go under all the time no matter the line of business, its usually due to selling something that doesn't generate enough interest, is obsolete or is superseded by a better product..
Increasing the price of games isnt going to save these studios.
@kyleforrester87 I guess the recent case that sticks in my mind is the Tomb Raider one.
They didn't reach 5 million in sales in the first year so people lost their jobs. But I think it still sold very well 3 million or so (don't quote me lol) in the first year thats about $150-200 million in sales... Did the game really cost more than that to make?
So increase the base game prices by $20, and take out all the MT/DLC garbage. Problem solved. I'd much rather buy an $80 complete game than a $60 partial game any day of the week. Plus after preorder discounts it'd be close to $60 anyways.
@themcnoisy Let's be honest, not every game is, or can be, a Final Fantasy 7.
@Splints
@themcnoisy Online functionality wasn't a big thing back then. No PSN Store back then either.
@kyleforrester87 Of course its pure greed. I know we see some Devs go under or some Publisher kills off some studio's because they weren't profitable enough but that doesn't mean the games weren't profitable or the fact that maybe those games didn't help their 'image'. Allegedly H:ZD and ME:A had around the same 'budget' and arguably H:ZD the biggest marketing budget, but ME:A still was a financial 'success' making more money than it cost.
In EA’s financials, Mass Effect: Andromeda is held up as the title that drove the company’s financials last quarter, referenced multiple times as a significant factor in generating revenue.
"Year-on-year growth was driven by the Mass Effect: Andromeda sales, captured in the quarter and by FIFA,” CFO Blake Jorgensen explains. “Digital net sales were $681 million, a new record for the first quarter, and up $113 million on the year-ago period. The increase reflects strength in live services, together with our mobile business. In addition, Mass Effect: Andromeda was a significant contributor. Full game PC and console downloads generated net sales of $111 million, 32% higher than last year. This was driven by Mass Effect: Andromeda sales captured in the quarter.”
Not bad for a game with approx the same budget as H:ZD and a game that I believe sold around 50% the figures of H:ZD.
A game that took 10yrs to make, Final Fantasy xv broke even on its launch day. Game director Hajime Tabata told Dualshockers that the game broke even in just one day when it launched on November 29, 2016. Before Final Fantasy XV came out, Tabata said the game needed to sell 10 million copies to be a "success." He later clarified that comment, stating that 10 million is the studio's personal goal, not necessarily how many units it needs to move to turn a profit. Even after 10yrs of development, a game can break even on Day 1 so every sale after that is 'profit'...
@kyleforrester87 did my own research lol.
Tomb Raider 2013
-cost 100 million to make
-Sold 1 million in 48 hours (60mil)
-Sold 3.5million in 26 days (210mil)
-Had sold 8.5 million by April 2015...
-Highest selling Tomb raider ever
-turned profit in its first year.
-was deemed as an utter failure
Edit: deemed a failure by its square. Everyone else thought they were crazy.
Make games as expensive as you want but get rid off all microtransactions. This way the MARKET decides and not the addiction. If a game is very expensive people won't buy it or wait for sales but microtransactions are really a mess because players who are addicted and buy loot boxes destroy the fun for ALL gamers. Maybe 10% of the customers buy loot boxes and 90% have to suffer.
@BAMozzy If it's greed, then fair enough. I have to be honest, it's not something I've done much research into. Mostly because I play a lot of games and almost none of them include micro transactions, and if they do, I've just not noticed them. But I'll take your word for it!
@Sanctanox Or instead, lootboxes should be rightly classified as gambling and should therefore be regulated like any other gambling business.
Lootboxes are doing nothing but introduce youngsters to gambling and start a vicious cycle that continues in to adult life.
Lootboxes and microtransactions are not in play just now to make games turn a profit. Its to maximise the revenue stream to generate even more profits.
Jacking up prices for everyone and even for those who ignore them just now does nothing but maximise the profits for publishers and people who currently avoid them are now hurt in the process. Its counter productive just to appease the shareholders of publishers in their quest to increase their share price.
Simple fact is these games all turn a healthy profit as it is.. the method they use right now is to generate even more profit by hooking kids in to what's essentially gambling.
Kids rightly aren't allowed to go in Casinos or bookies. They shouldn't be subjected to loot boxes either.
The market will find its own price point. Never ever mistake the desire for profits with the cost of developing games. Microtransactions and DLC are almost all profit in most cases (large expansions notwithstanding). The idea that games need to go up is rubbish based on spurious maths. Yes, the length of some games is long compared to the pricing. How, though, do you value that time? Is collecting feathers in Assassins Creed 2 better time than a similar hour in say, Hellblade (a shorter game).
If I could insert a CM Punk laughing gif right now, I would.
Personally, I feel that increasing prices for base games will just hurt sales.
I've been wondering if games need to go up $10 in price, but I really want studios to cut some of the marketing budget to bring expenses back into orbit, heavy rains marketing budget was double the development one.
@kyleforrester87 I obviously don't have access to the all the actual figures etc but we do get access to EA, Activision etc financial statements and we do have access to their 'approx' sales figures for games too.
We often see how a game is 'successful' on just 1-2m sales and whilst we may not know exactly how profitable or the cost in development, its clear that most games make profits - not necessarily in their first week but most big franchises are profitable in their first day. CoD, Fifa, Battlefield etc are all profitable. You can say Infinite Warfare for example failed to match Black Ops 3 sales but that doesn't mean Infinite Warfare 'failed' to turn in a profit. According to Activision Blizzard, they confirmed during their Q4 2016 Earnings Call that the entire company, across Activision and Blizzard titles, made over $3.6 billion just from in-game content sales. In-game content sales includes Call of Duty Points, Overwatch Loot Boxes, and more.
That's $3.6bn profit from additional in-game content alone - let alone the 'billions' they made from game sales. You never see Activision or EA posting a loss although they will say their 'profits' are down on the same period as last year for example but they are still posting quarterly profits - usually in terms of 100's of million $'s despite maybe not even releasing a game that quarter. If the Devs are struggling, then that is because their parent company (like EA, Activision etc) are not giving them the freedom or support they needed. As I said, even ME:A was financially profitable but we know that it still ended BioWare Montreal - maybe because it wasn't profitable enough but if EA had maybe raised the budget to enable them to add the polish needed, the game would have sold more and turned a bigger profit but whilst we see it as a 'flop', financially at least, it still made EA money.
Its harder for 'exclusives as they can only rely on one platform. If you look at PS4 exclusive sales - only 4, 2 of which were remasters, managed to sell more than 3m. Uncharted on PS3 sold less than 3m too of course but that was 10yrs ago.
With rising costs, as well as consumer expectations to deliver bigger and better games, I am sure the amount of games that need to be sold to become Profitable has increased.
The Witcher 3 is another example. That has Reports conflicting on the exact figure for development. The total was estimated at $67-81 million, with $12.2-32.4 million for production and an additional $25-35 million for marketing yet the studio made a profit of $63.3 million in the first half of 2015 alone (wiki). Since then the game has obviously increased in sales, as well as the DLC sales and Game of the Year edition sales. No doubt it has made more than double its development and marketing costs all without micro-transaction content.
Point is, that the majority of AAA games are profitable without micro-transactions. The fact that Activision post $3.6bn profit from 'additional' content has made ALL publishers want a 'slice' of the pie - profit for doing bugger all in effect.
Lets be honest, if you could make $100 for every $1 invested, rather than $100 for $50 invested, as a business you would try it too. Why make another game costing $80m to make over 3-4yrs, when you can add extra content for minimal cost and make $1bn+ a year to keep your investors happy?
Fortunately though, the negative feedback on EA's implementation has knocked their stock market value, had Disney, the owners of the Star Wars licence, over-ruling them - after all its bad press for their 'Star Wars' franchise. I still bet SWBF2 was a financial success despite all the 'negativity'. Its just not as profitable as it could have been had EA not tried to be more greedy with the micro-transaction system they implemented. Had the game launched with just cosmetic loot crates, I bet the game would have sold better, therefore increasing EA's profits without the additional profits Cosmetic only Loot crates (like we see in Overwatch for example) could have offered. EA really has got it wrong this quarter - its hit NFS Payback hard too. Both games could have been very profitable on sales alone but their implementation of loot crates has affected their primary sales. After all you aren't going to sell any loot crates at all to people without the game - so EA NEED to focus on getting the game right in the first place instead of worrying how much more money they can fleece their customers for. Both of these, as well as ME:A, I bet will still be financially speaking a success though.
I love how he uses maths to prove his point gaming is cheap compared to tv and cinema but uses a total spend on 1 game at $300 (being $20 per month microtransactions & $60 for base game) to come to that conclusion!
@JoeBlogs I on the other hand spent £30 on the last Guardian. Altogether that was 90 minutes of my life I will never get back and £20 an hour for the privilege.
@toffeecrit I could pay just £12 ish a month for my TV Licence and watch 2.5hrs a day freeview channels and that would blow the 'cost per hour' of that scenario away. I could pay £8 or whatever it costs these days to go to the cinema or I could wait until it comes to Netflix or Sky and watch it as part of my subscription at no extra charge - ok so its not 'day 1' but at least its not costing anywhere near the cost per hour that the cinema offers.
I have SkyQ and whilst that is 'very expensive' per month, as long as I watch more than 3hrs a day, its costing me less than a pond per hour and I have access to over 1000movies, lots of box sets - both with 4k content, on-demand/catch-up options, hundreds of channels and variety. It is easy to watch more than 3hrs a day on average.
It took me 75hrs to platinum my Limited Edition H:ZD game so that only just beat the £1 per hour. ME:A took me 100hrs to finish it - inc all side quests etc - no MP gaming and I only payed £35 for it - effectively around 35-40p per hour. I spent more than a £1 per hour on Uncharted 4, Wolfenstein: The New Order etc. Some games I have only played a few hours on yet paid almost full price for - meaning that their cost per hour was far more than any TV/Movie option I have - and like I said, I have SkyQ with Movies and Sport too.
Point is, it didn't stop me buying Uncharted 4 - even though it worked out more expensive on a cost per hour than my TV/Movie package costs. Compared to the Witcher 3 - esp GotY edition with the DLC can work out to be better value than Wolfenstein for example so should it cost more? CoD has more potential than both of these - because of the MP and co-op options and Fifa too yet I bet Fifa costs a LOT less to make than either W3 or CoD. Rocket League has a lot more hours potential than a lot of AAA games so should that have cost more than Witcher 3 for example?
You really cannot break down games into cost per hour. I admit that if I only have £40 to spend on a game, I may take the potential length into consideration. If I know I can't buy another game for at least 1 month, I am more likely to buy the game that could provide enough hours to see me through that month than something I could finish in a weekend and then have 'nothing' to play for the rest of the month. Fortunately I have a big backlog so that doesn't crop up frequently.
I would be more inclined to feel sorry for 'devs/publishers' if they weren't posting massive quarterly profits, not announcing their games as financially successful with 'minimal' sales figures etc. Again to use ME:A which was considered by us a 'Flop' and only sold around 2m (Physical sales - 1.96m) according to VGCharts yet that was still a financially successful title. Its 'budget' was supposedly similar to H:ZD which sold double so its safe to assume that H:ZD was a much bigger profit making game. Point is these games are still 'profitable' despite rising game development costs. Maybe 10yrs ago, ME:A would have cost a lot less to make, only needing to sell 1m copies but today needs to sell 1.5m to break even. I wouldn't be surprised if there are more 'gamers' nowadays too and we can't always get the full sales figures because 'Digital' sales are increasing - which in turn may well be affecting the 2nd hand market sales so losing 'less' money to that sector. I also know we are seeing more and more 'long term' support for these games. No longer does 'going gold' signify that the development and production costs are finished as they still need to pay staff to update these games. Its not always to fix something either. Adding New game+, the ability to buy/sell in bulk, having a 'storage chest', menu ordering options etc are not 'fixes' to a broken game but expanding the game beyond the ending and improving the quality of life. Now with these 'iterative' consoles, some devs have added support post launch to these consoles. That may only take 1/2 devs a few weeks for example but that's still cost them money in salaries and overheads to optimise the game post launch for these consoles. Of course they could make that money back on extra sales - although not guaranteed but it does also give them some extra positive press. You can argue that post launch updates also give games some free advertising in the gaming press.
@Splints Think back to the last time you beat a AAA game and watched the credits all the way through. How many people do you figure were in there? Hundreds? Thousands?
Now multiply that number by a $40k-80k salary per each year you figure the game was in development. It’s by no means a perfect estimate, but it shows how labor costs must get utterly ridiculous when you have AAA-levels of staff working on a game.
My view is entertainment is too expensive. How many people do you know that are happy to pay the price for a cinema ticket?
Now this is obviously a return on investment situation, so how can games be made cheaper? Indie games are one way. Smaller teams. Smaller budgets maybe. I'm by far no expert
Thats whats happening when you let suits take over. EA gets what it deserves, mainly because they are putting F2P mechanics into full price titles.
He's over complicating the maths, all you have to do is look at the cost of games compared to 20 years ago to see they're basically the same price whilst everything else has gone up in price, oh and that cinema cost probably explains why audiences continue to decline.
The issue isn't the cost of microtransactions but their implementation. Nobody cares when its things that are cosmetic, the problems arise when they affect gameplay whether they unbalance the multiplayer or fundamentally change how a single player experience is built to accommodate them.
Most of us understand that the cost of development has greatly increased whilst the selling point has largely remained the same but there has to be another way
You know what? I bought a pair of trainers for £25 this year. And guess what trainers also costed £25 back in 2000. Yep those same trainers do the same amount of miles. But why oh why haven't ALL trainers risen to £60? Cos these companies can STILL MAKE A PROFIT. Now I'm sure that if companies weren't able to make ends meet yes do increase prices and then game consumers will just have to buy less games each year. https://www.reuters.com/article/us-electronic-arts-results/ea-profit-blows-past-estimates-as-game-downloads-jump-idUSKBN1852F5 EA made $56 million profit in May 2017!!
And games have doubled revenue over films! http://m.nasdaq.com/article/investing-in-video-games-this-industry-pulls-in-more-revenue-than-movies-music-cm634585
Yet in my area film tickets have dropped from £8 down to £4. Why? Cos movies were getting greedy and kept raising prices. Again can't help but stress vote with your wallets. Buying a game or any service is a two way handshake. You advertise, if I like it I pay... And in return I expect fair service. Fair means don't try and diddle me for more cash when you are already making 100s of millions in profit.
I think it may have been said but I think the cost per hour comparison to other forms of entertainment is pretty silly. It says nothing of the quality of the experience while you participate in it. I can see a movie for $15 in nice cushioned seat, IMAX and 3D bells and whistles or in an old theater with sticky floors during matinee times for $5. Same movie. Different experience. You just can’t compare these things. The customer is always right. If he/she thinks the experience is worth it, then to them, they’ll pay it. Cost does not equal value.
Spending 30 hours in an Uncharted game is more valuable an experience to me than spending 60 hours in Rocket League. It’s just my opinion and my preference. I’ll pay $60 for the former, but only play the latter because it’s free on PS Plus.
If these publishers raise the price of games, then many gamers will feel it is not worth it to them. And we are not wrong for saying that; it’s our hard earned cash, in the end. So are games underpriced? It depends on the game and who’s buying it.
@redd214 but here in canada games already ARE $80!!! And just forget about ultra mega editions etc. I already cant afford to buy games. I ALWAYS have to wait a year or so when they go on sale. It sucks
He can stick his flawed analysis where the sun doesn't shine...
Honestly, I could handle an increase in entrance fee IF they cut out all the bulldookie at the same time. But they won't because no-ceiling earnings beat an extra $10 per customer every time.
@BAMozzy completely agree with you, the point I was trying to convey was his working out that games are cheap relative to other entertainment is completely static ($300 total spend for 1 game is certainly not cheap) pricing and value is so fluid to every individual buyer. As a lot of people have mentioned there are games that have given me ridiculous value and others very much less so.
The flaw in his maths is that if you watch tv and don't like the show there is plenty other content to watch at no extra cost. Go the cinema see a crap film you've spent several pounds on it but maybe enjoyed the night as a whole because of who you have gone with. Spending £50ish on 1 game for yourself can therefore represent something of a value gamble and while you can trade in/sell a physical copy you can't digital ergo it's value to you can be extortionate if you happen to get burnt by a game.
Basically he can do one
So they actually took it out of the game good deal.
@Splints they probably would have spent the same as Dev cost on marketing too...
So apparently this Evan Wingren is an investor analyst for EA as well as a stock holder.
https://www.reddit.com/r/StarWarsBattlefront/comments/7el4tb/analyst_who_said_gamers_are_overreacting_to_ea/
Didn't think I could dislike EA anymore- evidently I was wrong.
Publishers scream poor and say games are becoming to expensive to make. Yet all the big publishers report record profits year over year. If games are to expensive it’s their own fault. Every game doesn’t need a giant open world and some kind of shoehorned in online component.
@Fight_Teza_Fight What a surprise!
I was thinking about this today, what if that guy had some ties with EA? Nah, they wouldn't go that far, now would they?
Never underestimate EA...
@redd214 I paid $11to see Gladiator in 2000 and $13 to see Thor Ragnarok last week. I paid $70 for Final Fantasy 8 that year, Destiny 2 was $80(in Canada). Plus $50 if I want the season pass, which is almost a requirement in a game like that. So the cost really hasn’t stayed the same. Also with the rise of digital sales publishers don’t have to pay the manufacturers or retailers.
@Stuffgamer1 Watch the language please.
It's time to stop!
It's time to stop OK!?
@Fight_Teza_Fight
Oh man, this is freaking hilarious. Just when you think this pathetic company can't stoop any lower. It seriously disgusts me that people continue to support this company and I'm as guilty as anybody for lining its pockets. I was buying Madden, Burnout and Need For Speed on every new entry for a long, long time.
I have spent 1700 czk on new Wolfenstein and played it for 17 hours exactly. That leaves me at 100 czk per hour. Movie ticket in Czech republic is 180 czk, so basically the game is by this logic more expensive than two hour movie in cinema which you don't have to have a console and TV for…
Anyway, how costly are games in your country? Average wage of a young person in his mid 20s in Czech republic can get you about 12–17 full priced games. If you remove the cost of living and other expances, then you are at 6 games per month at most wich is really not a lot if you consider that you would only spend money on games, a place to live and food…
And yes, game prices went up… But so are the sales and game making expenses.
I used to pay between 40-60 quid for megadrive games 25 years ago. And back then games were not heavily discounted after a fortnight.
Games are bigger and more detailed than ever. Some have complex online modes which have expensive running costs. Gamers now have more choice than ever when it comes to choice of purchase when it comes to looking for cheaper deals. Personally I think gamers have never been more informed or have had more choice about the games they play.
Try buying a pint of lager for the price it was 25 years ago
@bbq_boy you've clearly never been to an odeon cinema then. Cinema tickets are 4 times the price they used to me...and don't get me started on the popcorn either
I think physical prices, under the old ways of "you bought a game, you traded it with mates, sold it on ebay", then yes, we've had it good for a long time.
Under the digital , "you pay for a non refundable, non transferable license for you to use the software that can have , if not installed, its ability to be accessed removed at any given time", prices are more than fair.
@JonnyMack You should have bought an Amiga.
@themcnoisy haha - Was always a Sega boy
I remember paying £70 for Virtua Racing with the SVP chip or whatever it was called and £60 for the 32mg cart of Super Streetfighter 2... Pricing is fine as it is... honestly...
@FullbringIchigo Damn right!!!
I literally lol'd. What a tool this "analyst" is!
Maybe this an off topic, but speaking off star wars it was a story driven with strong character in it, i played battlefront 2 feel unsatisfied of how the length of the campaign, but i really appreciates the gameplay and graphics it is on par with the greats of next gen game, if ea can make a new campaign story mission mode Dlc rather than micro transactions, weapon character lock, costume or whatso ever that we already find in other games. Campaign Dlc would be great for the players and the dev, it would be fair for us gamers to pay what we deserve, rather than feel disappointed to pay something that we didnt need, its feels cheated,.. at the end of the day battlefront2 is a game that have a chance to be great if handled well, i play it in 3rd person mode but i also feel bfront2 had a lack of vision in picking is it multi player or story driven adventure games, I definitely pick the last one because star wars franchise has “the force” in story and character right from the start.. in terms the price of a game, its already expensive, the thing is as gamer if we had a great time with a game.. we will go the distance and buy it, just dont dissapoint us because it would make it feels like cheated, btw its just my opinion no harm done,, cheers and may the force be with us
yeah this pretty much covers this i think
https://www.youtube.com/watch?v=m4386SOdnxA
In a month, I could go watch 10 movies in the cinemas while being a Netflix subscriber and it'd still cost less than $60. That's how expensive games are to me currently.
@Gmork___ I feel for you, man. Never knew about this until you brought it up. I have a friend who lives in Canada but his never brought up the fact that games are expensive in Canada.
Do these "analysts" even know anything whatsoever about the thing they are analysing.
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