Analyst calls for hardware, software price cuts

Baird researcher says Microsoft and Sony should discount the Xbox 360 and PlayStation 3, cut "most" software launch prices to $50.

The time is right for hardware and software price drops from Sony and Microsoft, according to Baird researcher Colin Sebastian. Regarding hardware, the industry-watcher said core gamers already have their eyes on next-generation technology, making the timing ideal for Xbox 360 and PlayStation 3 price drops.

Hardware and software prices should drop, says Sebastian.

Sebastian further noted that Microsoft's rumored $99 Xbox 360 Kinect bundle would be a "nice start" to add hardware value for consumers, but a straight price cut would be more effective.

On top of hardware price drops, Sebastian said a $50 price point for "most" software releases makes sense, considering the age of the present console generation. The analyst believes this could be achieved through a "modest cut" to the royalty fees paid to Microsoft and Sony.

Concerning April's NPD data, Sebastian said to expect disappointing sales for the month. The industry diviner remarked that hardware and software sales are expected to remain "weak," trending down 25-30 percent year-over-year. Full NPD data will be revealed next week.

Written By

Eddie Makuch is a news editor at GameSpot, and would like to see the Whalers return to Hartford.

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Discussion

185 comments
Ovirew
Ovirew

I really wish the prices of games would go down a bit.  But then, the industry would probably stiff gamers by putting even less work into them.

 

I think it's our duty as intelligent young adults to simply not buy games at launch, since games reduce in price pretty rapidly.  If you wait around a year, a good game might be $10 cheaper or be re-released in a game of the year edition with extra content at a value.  If you wait around 2 years, a mediocre game could be as cheap as $20 or $30.

theKSMM
theKSMM

I also wish that new games could go back to $50, but now that we have clearly accepted games at $60, what are the odds that anybody is going to take a shave to get us back to $50? Exactly.

 

I think a more likely scenario is that we'll see "rentable" games where you can get a disc for cheap, but your code will allow you to play a fully unlocked game or allow you to play for a week or a month or so. That would be a concession to the rising cost of games (which some people are suspecting will be $70 in the next generation) and it seems more likely to me than console-makers disallowing used games. Remember, you read it from me first.

 

I don't see any price cuts on consoles coming before September.

Devil_wings00
Devil_wings00

I wish games had a scaling price system based on development cost. Not every game is a AAA blockbuster title with a 20 million dollar + budget and a massive marketing campaign. Right now it's either 60 bucks for an off the shelf game new or 10-15 bucks for an xbox/ps3 arcade game. Why can't we have inbetween priced titles?  Something that launches at 30-40 bucks (HD Remakes seem to be the only thing in this price range "new" right now)? I've pretty much adandoned my console in favour of the sale prices of PC games so it really isn't that big of a deal for me these days.

 

Still I remember a time not to long ago, before DLC, when 50 bucks bought you all the content the game offered. Now a game is 60 bucks out of the gate and if you like it enough to get the DLC, it can cost anywhere from 15-60 bucks extra depending on the number of DLC's released.

empiricaltony89
empiricaltony89

ive got a feeling that even if sony/ microsoft do cut the royaltty fees the high street stores like game, gamestation and hmv wont lower the prices on the shelves

hesoyamdon
hesoyamdon

i stay in dubai and  in spite of no tax, most of our games cost $73 !!???!!! why is that !!!???

Hurvl
Hurvl

When even the analysts say that the games today are overpriced, something is wrong. But royalty cuts for Sony and Microsoft, even modest ones? You gotta be effin' kidding me! Where's the fun in controlling a gaming platform if you have to give discounts to companies wanting to make games for that platform.

dawnofhero
dawnofhero

The most  I care to pay for a new game is $40-$45.

Megavideogamer
Megavideogamer

Yes at price cut may help. But not as much as Sony and Microsoft would hope. The people who have a PS3 or Xbox 360 already have one. Unless MS/Sony just want be clear stock. Before 8th generation is ready.

DeadPhoenix86
DeadPhoenix86

$50 for a game is pretty cheap, compared to where i live.

we pay as much as €60 for a brand new game, which is almost $80. that's why i always, never buy them at release date. 

warhawk-geeby
warhawk-geeby

The way the industry has fought 2nd hand games has just made matters worse.

 

This time 6 months ago I was planning on buying multiple games, but with the recent announcement of DLC and passcodes the list has reduced to just two.

 

Starhawk which I pre-ordered for £34.99 from HMV (been waiting for the game for 3 years).  And Journey which I'll be downloading over the summer.

 

Far too many games appear to lock-out content nowadays even when paying full-price for a brand new copy.  I was going to pre-order Max Payne 3 until I discovered there were several DLC packs in the pipeline..

 

Makes much more sense to just wait now and pick up the inevitable 'complete edition' which appears a few months later.  Costs less and actually includes everything it should have originally.

 

Yes the price of games should be reduced - but that's only because we're no longer being sold the complete thing.

servb0ts
servb0ts

$50 buck is still too high,especially with the $40+ dollar DLC, they lock and keep off your full price game. I'm not even excited about next gen consoles, and that's a 1st in my book ever since Atari 2600.

steelmouth
steelmouth

As for the actual games getting a price cut am all for that as they are very very expensive,for every 3-4 games you can get a new console which will last 5-10 years *cough RROD cough* as opposed to a game thats like what 5 hours?

 

But who will bare the price cut of the games between the developers, publishers and console manufactures with all of them already reporting loses at the current prices

benbonney
benbonney

I think the £50 rrp of cod:mw3 was utterly disgusting

steelmouth
steelmouth

Given that MS just confirmed the $99 X360 which is actually more expensive than the $199 model already, I dont see how they could drop the price of the $199 system, making the $99 system even more expensive and highlighting the "Rip Off" sticker on it

anuragdas68
anuragdas68

drop the price drop the price no game released is worth 60$,max 40-45$,they are ripping their customers big time for 7 year old consoles

arc_salvo
arc_salvo

A price drop sounds good to me.  I always thought that the $60 price hike was too soon and that the industry should have focused more on getting prices down rather than making graphics better.

 

And I also hope that the next gen stuff doesn't come out until 2015 or holiday 2014 at the earliest.  I'm not ready to retire my 360 or PS3 yet.  They still feel "new" to me.

Darnasian
Darnasian

@deadmonkey76

 

No one is forcing you to buy those games at a 60$ line...you can always wait for a price drop and een if you heard bat things about it and don't want to play it...then why did you buy it?

deadmonkey76
deadmonkey76

most games are not even worth 50 most game are not even worth 40 very few gems worth my hard earned cash games like homefront resident eveil raccoon city and crysis 2 are barely worth 40

ALLoY1717
ALLoY1717

He is right, most games aren't a $60 value. Games like Halo where you have this massive campaign, a multiplayer mode the replay modes, co-op and forge etc. That is a $60 value and we expect DLC for these sorts of titles. Something like the Prince of Persia games (as much as I enjoy them) don't offer near that value for money.

nahtecojp
nahtecojp

I agree $60 (even more in other countries) is ridiculous for a game, especially given the amount of content put into them now and with DLC.

fightingfish18
fightingfish18

I'm thinking that MOST games should be released at $40...  I mean really, a game like WET.  WET is a lot of fun, and it's challenging to play as well.  But it's NOT $60 worth of content.  It should've been released at $40, just one example.

SchumiF1
SchumiF1

Damn that would be great if new game prices went back down to $50....

isildor81
isildor81

but instead of that the companies are trying to stop piracy and even second hand market by bullying on those that already consume their products...paying extra buck for some things in the game...being ALWAYS conect to the internet...etc etc They want to take more money from the ones that already paid...instead of looking for new markets

isildor81
isildor81

i think most games are overprice...in my country piracy is almost the rule not the exception...if the companies thougth this well eventually willl figure that lower prices could bring a lot of gamers...20, 25, 30 bucks will do that...

MadVybz
MadVybz

I'd be lucky to find any sort of price like that. Games where I'm from are usually $70/$80.

Psycold
Psycold

After reading through this thread, I feel bad complaining about a $60 game compared to what some of our gaming friends are paying in other parts of the globe.

deth420
deth420

Ha good luck with that!! gamers have been saying this for years....maybe they have more pull, I dont no anymore....

orbital_eddie
orbital_eddie

well.. hardware costs no more the 30$ to produce it... 

so these 2 companies are ripping costumers big time 

RussellGorall
RussellGorall

Everybody keeps saying how great it is paying sixty bucks for games on seven year old console, but sometimes I wonder...

 

Next gen please.

xdude85
xdude85

I'd rather have games set to $25-30 instead of $50. 

ebolav35
ebolav35

Yoda-games had been $50 since I was playing Sega Master System titles in the late 1980s.  Have you ever heard of inflation?  The dev costs for games have increased exponentially over the years, if anything $60 is a bargain due to these 2 factors.

hadlee73
hadlee73

Catch-up, anonymous developers! The Analysts are out-newsing you 5 articles to 1!

masterdrat
masterdrat

If we lived in a perfect world, I would play the game first and give you money after if I liked it.

yoda101280
yoda101280

One of my biggest peeves with the 59.99 price point is that PC versions of games are using that price point now as well.  As explained by the companies themselves, that would be microsoft and sony, they basically said one of the main reasons for raising the price point back when they first launched this generation of consoles was b/c of the huge initial loss they were selling the consoles at. 

 

Essentially the higher price point on software was the only way to make it feasible for them to sell the consoles at a resonable price point.  Well that's all well and good and regardless if you believe that or not I fail to see what that has to do with some developers raising the PC games to the 59.99 price point.

 

The only reason they did that for PC titles is b/c they are greedy, money grubbing a$$hats, it's easy to tell too b/c the same publishers and developers that have the reputation for being all about the cash are the companies that always have the 59.99 price point.  Call of Duty is a clear example of that, even now with yet another installment on the horizon, that crap is still 59.99.

 

That's really my big issue though, they saw the conlose price point jump to 59.99 and they figured, "Well, no reason we shouldn't just take this opportunity to gouge that extra 10 dollars" and just like that the price went up.

ale1ale3
ale1ale3

 @hesoyamdon , yeah that's rather strange, in mexico we are very close to the united states and still have to pay 90 dlls for a new game, a complete ripoff!!

Senor_Kami
Senor_Kami

 @anuragdas68 Some games are definitely worth $60.  $40-$45 would suggest that you've never thought console gaming was worth the $ as no gen had games selling that cheap at launch on a regular basis... unless you count portable games.

ebolav35
ebolav35

 @orbital_eddie

 I'm curious your source re: $30 production costs.  My guess is pulled out of your butt...

Megamoss1984
Megamoss1984

 @hannify Amen to that.  Any game that can be completed in around a week of casual play time is not worth buying outright unless it offers something distinguishing (e.g. COD/Battlefield lengthy multiplayer campaigns).  I only ever buy games that I know will offer me weeks/months/years of playability.

Seiki_sands
Seiki_sands

 @ebolav35 And the market for those games has expanded exponentially as well, surpassing even films as an industry in terms of revenue. Some films have made a profit despite production costs of $200 million or more, far more than any game, selling $10 tickets and $20 DVDs. You could say "That's because more people watch movies than play games," to which I could reply "Perhaps that's because movies are so much cheaper than games."

Megamoss1984
Megamoss1984

 @ebolav35  You make a good point, but it's not the in interest of the customer.  The main concerns are quality of the product and price point and no amount of posturing or protesting from developers about production costs or piracy will change that.  Nothing has any inherent value, something is only ever worth what someone is willing to pay for it.

orbital_eddie
orbital_eddie

 @ebolav35 oh really?? do you know that production cost is 7 times less from retail price. so 200/7 is less than 30

 

pppfffrrr

Hrel
Hrel

 @ebolav35 Yeah, I call bs. Production cost of the 360 is very near 200 dollars. I don't know exactly what it is, but I'd guess it's no less than 150; and remember resellers don't pay 200, we do. They pay for like 170-180. I've thought for a long time, release games at 60 bucks, fine, but drop the pre-order price to 30 bucks. Offer the game to be downloaded instead of buying a disc, BUT if you do that it should be about 10-15 bucks cheaper. Disc, case, artwork for each, shipping AND retailer account for that 15 dollar price drop. In other words, it should only be 60 bucks for soccer mom's who have no idea and are buying a present from walmart. Then even the retail price should drop pretty quickly, I'm talking 6 months it should be 40 or less. Some ppl in here bring up good points with DLC. It's out of hand, I don't even want to see DLC till AT LEAST 6 months after launch, any sooner and it should have been in the game, prefferably 1 year. Used games? Gamestop only saves you 5 bucks 00% of the time on  used games; but amazon, ebay, Steam, gog.com. All those save you a bunch normally. Last game I paid 60 bucks for was Halo 2 special edition. NEVER again. I just wait, then get it on amazon for 20 bucks or less.

ebolav35
ebolav35

@Seiki_sands The last part there is such flimsy logic it is not worth refuting. Btw $50 in 1987 is over $94 as of 2010, the most recent year available. So games have actually devalued/are more of a bargain since the time i referred to.

ebolav35
ebolav35

@Megamoss1984 @ebolav35 I agree in terms of things like day one dlc, etc. Were piracy not so rampant, devs could choose to lower prices...piracy is the real problem here.

ebolav35
ebolav35

 @Seiki_sands

 Okay fine, I'll discuss it:1-no compelling evidence gaming is competing with the media you mention

2-You don't know the current profit margin of selling games at $60, therefore, your point only works if there is a huge 'pad' of profit to work with. 

3-Because of # 2, it would be like saying Mercedes would make a lot more money in the long run if they sold their cars for the same as a Chevrolet.  Scale alone isn't the primary factor here.

4-There is no evidence to suggest the average 'casual' gamer would buy more games were they cheaper, in fact, most market research has shown that lack of interest, NOT price point, drives the low game purchase rate of casual gamers.

5-Value and bargain are not inherently personal-try going into a store and buying something for what you *think* it's worth. 

Seiki_sands
Seiki_sands

 @ebolav35  @Seiki_sands It's so wacky to think if games were sold within range of competing media, than the market for those games would greatly increase, possibly offsetting those price reductions? I don't think so, I think it makes a lot of sense and I think we even have some evidence to support the idea in the form multi-million selling, barely better than crap, apps in the app store. I think if quality games were available for $25 new, their sales would spike dramatically and bring a massive amount of people into gaming the right way, rather than being disillusioned with it by consuming awful social and casual games. Oh, and the novelty of electronic gaming on my TV, for which I was willing to pay a premium in the 1980's when it seemed like fancy new tech, has long passed. Also worth repeating that concepts like value and bargain are personal.