$70 Prices On Next-Gen Games Won't Hurt Sales, Analyst Says

@durantftw: problem is 99 percent of games today laugh broken!!!! Hence not even close to being worth 70. Games today after launch take 6 months to be on par for being worth that 70. They need to release games that work like they should before charging 70. Its crazy

@durantftw: I agree and disagree also. 20 years of no increases in prices, would be hard to bare in any industry, under any circumstance. BUT... there is always a but.

The gaming industry has continued to grow massively over the last 20 yrs also, which means more sales of software. So that hit game in 2001 that sold 1 million was awesome. Now today that hit game that sold 10million is even better. Licensing fees of 25% to 45% - avg 35% - start to really do well for platform holders, publishers, and developers-to studios- to even my little print company that works with a game studio.

GAming industry is a razor and blade model : so just looking at the math . (of course it is more complicated but still simple)

one game -sales 1 million @ 30million to make X $60 = 60 million 2X your investment

one game sales 10million @ 150 million to make X $60= 600 million. 4X your investment

Also, please take into account that there are many new revenue streams that the gaming industry takes in beyond your initial purchases. Like metadata sold to third parties (very profitable), DLC, Microtransactions, killing off non-licensed peripherals, ancillary sales into other media, digital sales cutting out brick and mortar, and on and on.

The more you sale the better, and 'tie in ratio' is constantly getting higher and higher.

ALSO things are much different then early generations compared to now, Publishers pool together investments much much better and across the board, so it not like 6th gen when developers were closing left and right . The game industry is still one that averages 40-60k a year and one that requires not formal education, no states licensing, no regulations, little to no unemployment (may need to travel). And still an industry where a teenager can make millions on a cool idea. The gaming industry on whole is very profitable, and those that lose out , is usually from self inflicted wounds.

You can just see the proof, developers are just as likely to close from talent pool leaving to create their own, then financial loss. If this was a risky, unprofitable industry then you would not see more games now then ever. There are several times more AAA games per year then their was 20 yrs ago. Happy memories may make it seem like there was a lot of game in the past but when you count the games .... Consoles are launching with dozens of games, not a few. aFter a year you have 100s, not dozens. I once remember being able to play every single RPG that came out, and sadly reading EGM for more. Now there are so much choice, so many games, so many new ways to consume them.

I also want to point out the development costs. The budgets have risen per game a lot, but entry costs have dropped. Processing power, computer hardware costs, storage, memory, on and on --- before the entry into the gaming market was enormous. Now about anyone who has worked on a successful title is out their making their own on steam with parts they can buy off Newegg. Profits are much higher in every way.

BUT, BUT... Publishers are under pressure to increase prices and ... that probably should happen. But not for the reasons you mentioned above. PRESSURE, competition is high, not just from console makers but everything that pulls eyeballs away from games. Stockholders want results and want expansion at an even faster rate. I mean everyone wants more profit when ever they can get it, but you have strong investors on your back at all times. They do not want good profits they want amazing profits. CHANGES: 7th gen was thought to be the last, with mobile, social games killing off consoles altogether. 8th gen, new markets, the hold on publishers IPs could be threatened. VR, digital, streaming services, new players. Publishers want and need higher investments for what they don't know will happen. It is not like 20 yrs ago when a group of 30 people were just hoping for just good sales. Now it has become so complicated and console industry needs to hedge its bets.

Your view of higher development costs, therefore higher prices - i am not dismissing out right. But it is way more complicated then that. WE could also see the curve more sharper. $70 first month, 60$ next, and so on, (estimation) with early adoptors eating the most costs. I do think all it will take, is one console maker/ one publisher to balk and drop their prices. And that could see digital or MSRP fall back to 60$ as this is not the first time 70 has not been pushed.

ME, I steal my games off torrents. lol joking, I am a consumer and buy the games I feel is worth it to me, so should we all.