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 Pricing!

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Goingslow
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PostSubject: Pricing!   Tue Nov 13, 2007 11:14 am

Theres one thing that I've thought about a few times, and that's how with the odd exception all games are given the same rrp as in 39.99-44-99.

Because every game has a different number of people developing it, a different amount of time in developement and many more other differences which would take ages to list.

Yet when it reaches the shelf they're the same price. We can assume they aren't making a loss on selling them so somewhere along the line someone must be making a gain on it!

Say Halo 3 cost 10 per copy to produce and was sold for 40, yet PGR4 cost 8 per copy to produce and was sold for 40 (would be interesting to know real costs). Who gets the 2, (and with the number of copys that sell that's a bob or two)

If this money goes to the developers, are they not going to be tempted to cut corners so as to get reduced costs making them more margin, or does it go to 'microsoft', which means we're being done over as we could get it cheaper!

Now I may have got that all wrong as its all just guesses on my part, but I can't think that every game that comes out finished at exactly 39.99!!

(yes peeps I know some are cheaper i.e table tennis and tetris)

Anyone know anything??
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PostSubject: Re: Pricing!   Tue Nov 13, 2007 3:48 pm

Well, the best way to look at it it is as follows. The price point of 39.99-49.99 is what is called the sweetspot. Any more than that and you will find that customers are not prepared to pay that amount for "a game". I'm sure that the following is quite obvious. Any game, or project is completed by a scary number of people with impressive job titles. And I am sure that they are all paid a handsome wage. So you have to balance the budget you are prepared to stump up for developing the game against the projected number of copies you are going to sell.

It's not very often that you are told how much a game cost to produce and market, but they say that the final bill for Stranglehold came in at $30m. And what persuades a studio to release such funds? The total installed number of consoles worldwide. 10m+ for Xbox360. 3-5m for PS3. Which gives you an idea of how many people could possibly buy your title. This is how I'd break it down. I'd look at the largest demographic of players for both consoles. And as we are continously told both Xbox and PS3 are mainly owned by the 16-24 age group. Those are the guys with the money. And those are the guys a game like Stranglehold would appeal to. Then you ask yourself how many out of those number would buy that game. Or even how many of those guys would even know who Inspector Tequila is. And since Hard boiled (the film where Inspector Tequila made his first appearance) is a classic from 1992, you could guess that a large number of the Xbox and PS3 players woud recognise the character, or in marketing speak, the intellectual property (IP). Half the battle won. But then comes the next question. How can we increase our profit margin? The answer? Limited editions.

You must have seen the metal tins for Perfect Dark Zero, BioShock, et al. Suddenly an extra tenner is palateable, because you are satisfying the inner collector in you. What I'd like to really know is how many copies a game has to sell before it breaks even. And how many games it has to sell before it turns a profit. I'll keep my eyes open for what is the magic number.
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PostSubject: Re: Pricing!   Tue Nov 13, 2007 4:40 pm

One thing I guess which could be added to that is series games, would so many people have gone for halo legendary if they hadn't have been in to 1 or 2? As well as the marketing hype which surrounds such a big title.

I do understand what you mean, with such a large team having to make the money back.

Would a more 'free' pricing system not make for more competion? Bioshock for example is an excellent game with incredible detail in and a great story line, it cost me 37 tinned, if I'd have brought TMNT at release it would have been 39, I rented it and sent it back a day later as I'd completed it! Is that fair pricing. By your point Ubisoft may not have stumped up as much as 2k to produce TMNT so why charge so much for it, make it 20 and sell more copys that way.

If it is classed as a fair way to price, I'm off to Italy to vist Ferrari and ask them why I can't get that Enzo for the same price as my Focus. But Mr Todt its only 'a car'!!

Might sound a wierd way to explain it, but it's just the way my brain works (which although I have not been told as such is not the same as most) but I must have a least a small point.
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PostSubject: Re: Pricing!   Tue Nov 13, 2007 6:10 pm

I understand what you mean. games have the sweetspot, where it is virtually accepted that you will spend a certain amount on a certain game and then no more.

Unfortunately, with cars you will find that there seems to be no end to how much people will pay for a car. I think that the most expensive production car is coming up to nearly 1m. With a waiting list of at least 8 months.


But I hear what you are saying about different prices for different games in relation to what was spent on it. For example if we say that TMNT was made by about 80 people and Assassin's Creed was done by about 300, why is the price still the same? I guess what really matters is the bottom line. The idea being for TMNT to be profitable, you have to sell a load less copies than you'd have to for Assassin's Creed. And that allows a developer like Ubisoft to take a gamble on an expensive game if the cheaply produced games pay for the overheads of a company. But like I said, I'll keep a lookout for the business models of videogames companies and see whether my guess makes sense.
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PostSubject: Re: Pricing!   Fri Feb 22, 2008 12:12 pm

Well games do cost but think about how much time and efort ppl put in 2 make it great. All I can say is don't buy a crap game lol then u will get ur moneys worth

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