Probst: Next-gen games will cost more

EA CEO says while strong demand supports current top-tier pricing, games for new handhelds and next-generation systems will be priced higher.


If Electronic Arts CEO Larry Probst and CFO Warren Jenson have a crystal ball, they aren't telling analysts where they keep it. Ball or no ball, the pair freely prognosticated in today's earnings call, held shortly after the US markets closed.

A couple of interesting comments flowed from the two gentlemen today on the longevity of top-tier titles' $50 price tags (they're not going away), premium pricing for PSP software (start rubbing those 20s together), and even higher prices for next-generation games.

As is typical with earnings calls, the presenters started out with one theory, but when pressed, they ended with others. For instance, Probst prepped listeners for good news by saying prices are coming down. "Overall pricing will trend downward over time," he said. "It's just going to happen."

But Probst's mantra of lower prices began to falter when pressed by additional analyst questions. "My comment would be that premium products will continue to command premium prices, so I would not expect a huge difference [in prices for calendar year '05]," said Probst, shifting slightly from his earlier comments. "If you take a look at the average selling price in the top 20 in calendar '05, compared to what it was in calendar '04…in fact, if you trend it over the last three or four years...that average selling price in the top 20 has been somewhere between $45 and $50. I would not expect a huge variance from that in '05."

But when the subject turned to pricing for next-gen console games, Probst acknowledged price hikes are likely. "It would not surprise me to see selected titles carry a higher price point on new-generation consoles, at least initially." (Emphasis added.)

On the topic of next-gen consoles, Probst was hopeful Microsoft would not cease production of the current Xbox console as it ramps up to manufacture Xbox 2 consoles, as some have speculated. He also made some modest predictions for who would be first to market with its new platform, Sony or Microsoft.

"I would not expect Sony to have a head start on the next generation of hardware console systems," Probst said. In fact, Probst laid out a scenario whereby the PlayStation 3 might not make it stateside until late 2006. "[It] remains to be seen whether there will be new console launches from either Microsoft or Sony [in calendar year '05], and [it's] probably impossible to predict whether it's early or late '06 for [the] PlayStation 3. It might turn out that [the] PlayStation 3 is launched earlier in Japan than it is in North America and Europe."

Overall, the execs were mum on specifics regarding the launches of Sony and Microsoft's new consoles. "With regard to when those systems are going to launch, you will have to speak with them," Probst said, but overall, Probst expects a much tighter race between the two leading console makers."With regard to market share, I would predict that the two companies are closer in market share than they were in this cycle." He did not make any mention of Nintendo's next-generation console, code-named "Revolution."

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