More Video Game Makers Fear The Free Market And Don't Know How To Compete
from the welcome-to-market-changes dept
Here we go again. Remember a few months ago when Nintendo's President Reggie Fils-Aime was bitching about the fact that people were buying video games on mobile phones for a buck or two, rather than spending many, many multiples that for his games? Apparently, he's got friends. Epic Games president Mike Capps is playing the role of Nintendo parrot by saying the same thing:"If there's anything that's killing us [in the traditional games business] it's dollar apps," he continued. "How do you sell someone a $60 game that's really worth it? They're used to 99 cents. As I said, it's an uncertain time in the industry."To be fair, he admits that it's also "an exciting time for whoever picks the right path." But if he's worrying about selling $60 games, perhaps he's made it clear that he's not picking the right path. After all, time and time again we've seen that video game makers have found it to be significantly more profitable to drastically lower the prices of their games and rake in significantly higher sales.
And, of course, the same time he's complaining about pricing, we're seeing the third Humble Indie Bundle selling quite well yet again (just like the first two) using a pay what you want model, that is quite flexible, DRM free and also has a charitable component. If you want to look at who's on the right path, perhaps you should be looking at those "cheap" game makers who are so profitable and the success of things like the Humble Indie Bundles. Perhaps the problem isn't convincing anyone to buy a $60 game, but convincing yourself that $60 isn't the right price.
Then again, this is Epic Games we're talking about -- which, you may recall, was the same company who's VP scoffed at some indie gamers for talking about the importance of really connecting with their fans. So, basically, this is a company that doesn't want to connect and wants to charge super high prices. Good luck...
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Filed Under: competition, disruption, economics, innovation, markets, video games
Companies: epic games
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And that's good. Fuck Epic. Adios.
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I miss the golden age of gaming! :'(
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Yawn
What I would honestly like to see out of all this is for "dollar games" to cause a price war between traditional and mobile games. Consumers obviously win when this happens, and if new Xbox 360 games were starting to appear at the 20 - 40 dollar price point, you would see an increase in sales. I know that I for one would be a lot more inclined to purchase a game without the $60 price tag staring me in the face. New releases have to be something I am massively interested in, otherwise I just won't bother, because I know there are other games I can get that are just as fun and way easier on the wallet.
Don't buy the "high development costs". Are games expensive to make? Sure. But at best there are only a handful of games that can really honestly claim a $60 dollar pricetag.
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Probably.
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In the town I grew up in, McDonalds wanted to open a location and the local merchants had a law passed that prevented it for years. Since these are brick-and-mortar locations, their impact is primarily local and local businesses can lobby in their area to stop them from entering.
The same happens to Walmart, Home Depot, Lowes, and many other larger retailers when they try to open a store. They receive lots of resistance by local shops not being able to compete and complaining that they will be shut down.
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The resistance was vocal, lawn signs and everything, but with so many empty retail properties around here, the twp. govt. can't say no.
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It's funny because this is really a call to action on their part: they need to figure out how to make a traditional game worth the money of people who are used to $1-games. Yet, somehow, they twist it into a plea for unwarranted support. How sad.
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Well, how do you value those games at $60? If no one is willing to pay, then it's not "really" worth $60. If it was actually worth $60, people would be buying it, and you wouldn't be giving this interview.
Which is the call to action that you described. They've got to keep trying shit until the sales happen.
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hmm
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I'll share a secret with you....comon, closer. Closer. Ok. Take a trip down memory lane when prices hiked to 60 dollars for development costs because next-gen graphics are "so expensive". About a year after, Crysis is released, at the price point of 50 dollars. It made money. What is happening here is merely an industry evolution as people move away from high price point games and a new mainstream market is emerging.
Also, if you're going to whine about piracy, how about you post to an article that at least talks about it troll.
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IF you want free games, get the Homebr4ew Channel for the Wii.
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IMHO any game worth $60......
I've seen some really good titles go down the drain, as the newer and allegedly better versions came out.
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Something I've wondered for a long time is how one would make an MMO without copyright. I'm sure it can be done. Are there any Creative Commons MMO's out there? And since MMO's can have quite a long lifespan if they're good enough (I think there are people that still play Evercrack, and how long has WoW been around?), how would reductions in copyright terms affect MMO's built on that artificial monopoly?
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Re: Re: Time for the first 'parody' MMO
I'm willing to license this copyrighted/trademarked idea to anyone willing to develop the actual game for only $5 bazillion dollars... I'm sure the license fee is reasonable, since it will be a parody, there will be no other required licensing costs.
Borrow all the best concepts/ideas/storylines from the major MMO's but give them all enough of a parody twist to get around the copyright laws. While technically this should be possible, I'm sure any company trying it would still get sued out of existance.
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The problem the bigger publishers have is that they want to be selling at the higher price point and so they're going to need to do a lot more to convince people to pay; if they lower that even a little bit, they'd have a bigger draw. They aren't *really* competing with Angry Birds the way novelists aren't *really* competing with, I don't know, Reader's Digest.
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oh wait...
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Re: Ferrari vs Hyundai, cost to build
On the high end, Bentley, Ferrari, Lamborghini can make money with hand-made high style cars. On the low end Hyundai can get by on mass-producing mass-market cars. Looks to me like there's everything in-between, too.
But I bet both Ferrari and Hyundai management is sensitive to cost of production, they're just sensitive to different aspects.
But the Good Ol' Car Analogy doesn't hold water. Once tooling for a car gets set up and processes figured out, time and cost to produce go to a minimum, but still quite high, value. A car is a physical good, and just raw materials have a cost. But a video game, that's a digital good. Once built, it has a near-zero cost of reproduction. In a competitive market, the cost of a good should fall to the marginal cost of production, near zero. That's simple free market economics. The marginal cost of production of a car is still large compared to a digital good.
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Re: Re: Ferrari vs Hyundai, cost to build
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Re: Re: Re: Ferrari vs Hyundai, cost to build
I mean, you just demonstrated complete ignorance of basic, basic market economics.
But go ahead, follow that path to paradox. I'd recommend that you start by not putting insults in your responses. That makes you look childish, even if it just might score points with some judges and some jurors.
Educate me. What other costs should I be including in a distinction between a physical good, and a digital good? And how, exactly, would that effect Epic Games pricing, or business model? I'm open to suggestion.
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Re: Re: Re: Ferrari vs Hyundai, cost to build
Also, you exhibit prejudice. "Retarded" is a fairly bad word, and inappropriate in this context.
A prejuediced coward, that's all you are.
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This!
Industry is the right word as its stopped being about producing a fun game but churning out a "Flavour of the month" Play-alike, or porting whatever is popular to the other platforms .
Trouble is the 99c guys are just returning to the early 80's boom where you could buy a tape of a game that was for the Commodore or Spectrum (from the UK so they were the prevalent systems) for that price , load it and play it for weeks or months .
The Current games companies need to go back and strip out the "ooh shiny" and get back to inventing stuff. I've probably spent more time playing Spider solitaire or bejeweled than proper games since.... oooh Thief 2.
Not got a gaming console so I'm taking it from an old PC gamer perspective ; one that's so bored of the shiny and need to upgrade for no good reason that he's not bought a game for at least 4 years and that one got played 3 times cos it wasn't as good as the previous versions.
I'm happy enough to replay old games (stuff like atomix, Thief 1&2 and early Mechwarrior Doom and Quake are more than enough to entertain me besides the mindless doodlings of the likes of bejeweled
The games industry is relying on the small indies to invent new stuff that they can buyout and endlessly clone. The fact that they've bypassed them totally in new markets has completely got them foxed.
Bring back the early players (or the any folk that get it ) and get rid of the MBA's who can only look at the bottom line spreadsheet .
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Re: This!
This is a troubling thought. Remember what happened to that gaming boom? The industry barely survived.
Though, it may be time to shake things up.
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Re: This!
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Bottom of the dollar bin.
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Hmm...
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Re: Hmm...
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$60? No
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It's the same old mantra
I know I'm gonna drop $60 the day Skyrim comes out, and I'll be smiling during the entire transaction.
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Re: It's the same old mantra
Instead, the magic of competitive enterprise is taking shape. Rather than make some manual change, we as consumers are causing the change we want through the way we consume.
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How do you sell someone a $60 game that's really worth it?
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Re: How do you sell someone a $60 game that's really worth it?
I don't know about Crytek, but ditto on the 2kgames. I dropped full price for the NBA2k11 PS3 game because it reviewed well and it was absolutely worth it. They put in the effort, made an incredible basketball game, and I rewarded them. A big part of it was listening to critiques of 2k10 and revising appropriately.
Same thing for MLB The Show 11. I plopped down the $60 for it and, having played the game, would do so again in a heartbeat. Experience defines the value, not the cost to produce....
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Epic has a $60 game that's "worth it"?
So Epic says a computer killing game with agonizingly slow and stupid menu system that takes 4 or 5 years for them to patch properly is "worth it"? That must be some new use of the term that I'm not familiar with.
The Crysis series from EA is another example of stupid done well. The first Crysis was reasonably buggy at the outset but they did fix it (mostly) A really fun game with excellent replay value. I'd happily blow $60 on the sequels... or I would have except for the fact that they put some insane DRM on it that limits the number of installs you can do before it disables itself! You can only install the game a few times and then you're done.
As both a software engineer and casual gamer, I switch or upgrade PCs on a frequent basis. Is paying $60 for the same game every year a "good value"? Even when the repurchase is not due to OS changes or software or hardware obsolescence but simply the whim of the publisher? Not only no but f no.
Can I download a crack for Crysis Warhead and Crysis 2? You betcha, a quick google shows a bunch of patches and tutorials on how to do it. Am I going to spend $60 to waste my time wading through all the crap to find a crack that works only to find it broken by the next bug fix for the game? Not only no but f no.
When game developers start testing their software to the same level of quality as most other manufacturers do, they *might* be able to talk about $60 games being "worth it". When they stop the ridiculous and blatant punishment of legitimate customer without even putting a dent in the piracy of their games, then they can talk about $60 games being "worth it".
Epic and the rest are terrified of creating an open game environment. All you have to do is try to play add-on maps in any of the games. It's generally a nightmare involving manually unzipping files into specific/different directories, starting the game with specific command line options, using the developer console to type in some obscure commands and all sorts of other crap. Want to edit or create a custom map? Welcome to hell, because that's what even the best of the map creation tools are like.
It's obviously they want to keep all their customers locked in to content that they distribute. It's like Microsoft trying to lock customers in to using only 10 documents that they distribute with the program or a blogging site that only wants you to read the same 10 authors every time you visit the site.
When a gaming company finally realizes that the real value of their games is more than just what they can cobble together in a limited development time and start producing open-ended games, they can talk about the initial game purchase being worth $60.
Capps relates it to $1 apps on an iPhone. He's completely ignoring the the freaking purchase price of an iPhone! Why isn't Epic selling the game software platform equivalent to the iPhone hardware?
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Re: Epic has a $60 game that's "worth it"?
Nevertheless, I agree. If they think $1 games are competing with their $60 games, then they had better offer 60 times the value of that $1 game to justify the price. Lately, I just haven't been seeing $60 worth of game out there. I think the last game I felt was really worth that $60 price tag was Morrowind. I've played quite a few games that I paid $10 or less that I really like, such as Magicka.
The more I read about how the incumbents in the games industry just don't get it, the more I think I should be aiming for indie developers for a career. It surely won't pay as much, but that's not why I'm in to it.
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Re: Re: Epic has a $60 game that's "worth it"?
Ummm... No. I have an off-the-shelf HP Pavilion from Wal-Mart. I paid $120 for a new video card (it was not even comparable to a "high-end" card), and I can play ANY game on the market, with full detail, in my monitor's native 1920x1080 resolution. It totaled me ~$750US. An iPhone 4 costs $800 if I don't want to tie myself to the horrid network that is AT&T. Or $300 + (24 Months @ >=$30)=>$1020. I wouldn't include the cost of the AT&T bill, but you can't cancel your contract without paying penalties until you've recouped the cost of the phone.
Also, I'm comparing it to the iPhone 4 because, seriously, who doesn't get the newest version of the iPhone?
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Re: Epic has a $60 game that's "worth it"?
The epic games ceo later apologized for his comment. Epic did start out as indie. He had wanted to help but went about it the wrong way.When he got called out, he did his apology in the same manner.
However, I have since bought the indie gamer's offering partially because of this battle. I like supporting the little guy.
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The new $60.00 games are crap
The problem is that the current crop of games is shit. It can't match the classics. Sure, it's 'shiny' but it isn't fun.
Fun is what sells games.
My wife is an Angry Birds addict. She says it's fun. It's something she can sit down to, and blow of steam when she's ready to kill something (usually me). The current crop of mainstream computer games leaves her cold.
If the industry doesn't bring back the 'fun' factor it's going to kill itself.
Wayne
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Do I wish games were still 50 bucks? Sure but then again when I actually do buy a game, I know what I'm getting.
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GOG
I've gotten a few from there, and play for hours, and none cost more than $10.
I refuse to spend $60 on a game, even if I end up playing it for months. I remember I could get a new game for about $25 back in the good old days. If these gaming companies would drop that $60 price point to $25, $30, or maybe even $40, they'd sell a hell of a lot more units (if they strip the DRM out, as I still would refuse to buy it at $5 if it was loaded with DRM.)
Then after they drop prices, let's then get them to stop freaking out about the used game market. As if that'll happen.
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Re: GOG
good old games
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Accept change adapt or die
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It’s not $.99: Blame Al Gore & McDonalds
I am a 20 year veteran of the games industry and have witnessed much of the change being discussed first hand. I have worked as a video game publisher, developer, independent and now direct a social games company.
The "traditional" video game industry is very much like the movie business. Only the hits really make money and when they do it can often be a windfall. If you spend a lot to develop a game, of course, you need to sell a lot to make it profitable. When you are a "traditional" publisher, the expectation from your stake-holders is that you are targeting the top of the market. You became a top publisher because you successfully navigated the waters and were fortunate enough to come to the surface with a hit on a major console. Doing this many times over is expensive and risky. The risk has gotten extreme. It costs tens of millions of dollars just to market a top selling game today. Budgets for AAA console development today start at $30 million. Because of this games cost $60.
The truth is, the public expects "shiny" on consoles and it's less risky for a publisher to reheat and polish something old than start from scratch. So, in the “closed” world of consoles, we see a lot of graphically rich copycats with little innovation and, as game players, we feel robbed of $60.
Something new has come to town. It’s fast, tasty and cheap. Consoles are online, have storage and can provide a shopping experience straight from the couch. Players are mobile, portable and always connected to a rich source of delicious content through the Internet ($.99 content – impulse buyer’s content).
The online phenomenon is the true culprit, not $.99 apps. Traditional console publishers need to reinvent their business model if they want to stay relevant.
The digital goods (fast food) model offers the console publishers what they need but they haven’t fully opened their eyes to it yet. “Modding” was an early example of how the industry started to create a business model that benefitted from reheating and seasoning what had been developed prior. Yes, this was a PC phenom, but consoles are now on the Internet.
In the mod business model you initially sell a core game experience. Then games with modifications “mods” are released for purchase or free. The hitch is that players need to buy the original game to play the new mod.
If AAA publishers stop to analyze what they have, they are in a great position. The next generation of consoles will be connected to a high speed network, and with robust architectures for content distribution.
Give away the core game for $2, attract a broader audience and sell digital goods (upgraded features and compelling skins, stories, environments, characters, sounds, etc.). Players will easily spend $60 and more, but in smaller bites and the shelf life will be extended. Selling smaller pieces also gives you an understanding of what players are truly reacting to. It gives you plenty of room for innovation in marketing (E.g. time to play with pricing and limited runs on certain elements to add value).
Bottom line: Traditional publishers need to focus on the community that plays their games and embrace the fast food metaphor. Create content the community is hungry for. Give players a taste, for almost free, and let them season it to their hearts content. Consumers will know what they are buying in every bite, taste the value and be willing to spend more to complete the feast. The difference here is that the player will be in charge of what he buys and the publisher will continue to keep the buffet stocked with tasty content.
This model also helps you create a stronger bond with the playing community. They will be coming to you frequently and your brand will have more value.
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Re: It’s not $.99: Blame Al Gore & McDonalds
They have a market, and their sales (Entire Civilization V set for £27.99? Yes please!) It's not the selling of games at full-price that's helping them; it's offers like the recent Potato Sack, which was chock full of independent studio games, and by tying it in to the releaseof Portal 2, they made other companies a LOT of money to aid their survival.
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Re: It’s not $.99: Blame Al Gore & McDonalds
* that's rumour , Angelheart is the guy I recall - if its wrong then its the industries loss...*
I agree , build the framework and a core of maps/scenario/story and encourage others to add and then as time goes on add more .
There is still a good amount of Unreal tournament servers out there still, (for me. the best of the series due to it s speed and fun value) so its not all about shiny , cos players know what they want , and that is fun ...
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Re: Re: It’s not $.99: Blame Al Gore & McDonalds
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Somebody should pass a law!
Someone has found a way to profitably make and distribute simple games for mobile devices at a price that hurts the existing game industry?
Outrageous!
The existing industry is entitled to its current profits. Furthermore, it should be entitled to steadily ever increasing profits.
We need a new law to protect the existing game industry from new market changes that threaten its profitability. Innovation is important. We must protect our innovators from new technology which makes things better and cheaper.
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well
Doesn't this kinda imply they're used to selling $60 games that AREN'T worth it?
The way to sell someone a $60 game thats really worth it is to...oh, I don't know....MAKE A GAME THATS WORTH $60!!!!!
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As a long time PC gamer...
Market forces quickly turn games that can't sell at $60 into bargain bin games. So if it doesn't make money, the price drops in increments until a retailer just wants to get rid of it. It doesn't happen as often or as quickly through online distribution, though.
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I buy some of both and I've never chosen one of the other or said I won't buy the PS3 game because I laid down a dollar for a game I play while waitin for the checkout counter. They serve different entertainment purposes for me.
Now, I do see the $1 games competing with things like the nintendo DS, and I recently questioned whether I should buy a Ipod touch or the DS for my son when preparing for a long trip, but that is somewhat different.
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EPIC
AND I had more fun with it!
If they lower their games to .99 more people might buy 'em.
Just sayin'
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All of th 99 cent crap doesn't mean, well... much.
Unfortunately, this has led to me supporting the series phenomena. I'm more likely to buy a sequel to a game I liked (if it is made by the same studio that made the first one), than I am to try a new product. I hate to say it, but I've only rarely been disappointed.
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You wanted free markets. Well here they are. Bitch all you want, pussies.
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It's NOT worth it. I thought this was obvious.
I grew up on 2D blips and bloops, and I'll be happy to go back. Death to brown 'n bloom. Please die as soon as possible so cheap indie studios can take over the industry you're choking the life out of.
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How?
Easy. You make sure it's "really worth it." If you can't sell it for $60, it's clearly not.
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