So yes. I visited Sweden during Christmas, because, well, that’s where my family is. It’s strange to experience how the city I grew up in feels increasingly alien to me. I think 2009 was the first year when I felt like a bit like I’ve gone to a foreign country when I went back home. Strange indeed.
During the days after Christmas there’s the traditional sale. I happened to walk into a game store, because, well, that’s where the games are. The most visible one was Modern Warfare 2 – no surprise there. What did surprise me a bit was the price tag: 699 SEK.
That’s 68 euros.
68 euros, for a bit of entertainment. Sure, a well crafted and highly enjoyable piece of entertainment that cost a ton to develop, but it’s still just entertainment. Compare it to a movie ticket for about 9 euros (Modern Warfare 2 is about 3 movies long, excluding multiplayer) or a music album for 16. For 68 euros I can make that trip back home to Sweden, then return to Oslo, go back home again, and make one final trip to Oslo.
My point is that with prices like that you have left the realm of impulse buying and gotten very close to asking for an investment. At that price, a normal consumer (one that doesn’t eat, live and breath games), is unlikely to buy more than a few games a year. It’s all good if you happen to be the must buy title of the year (like Modern Warfare 2 was 2009), but most titles obviously aren’t.
I can’t help to wonder how many more games people would buy if the prices were lower. I just bought 3 games on Steam today (The Dig, The Witcher, Trine). The first 2 I never finished but always wanted to (especially The Dig), and Trine is a game I’ve not had the chance to play yet. I bought these games because Steam had some sort of holiday sale. All in all I paid about 20 euros.
I’m not saying that games should be priced like The Dig at 2 euros (released 1995 – it’s no doubt an old game), but nowadays I buy a lot of games on Steam during their sales. Games priced at 68 euros? Not that many.
Early last year (after Christmas) Steam had a weekend long sale (50% off) on Left 4 Dead among others. Sales increased 3000%, and they ultimately sold more copies that weekend than during the launch. Even if you write off the psychological effect of sales, and the increased media attention through gaming websites (and Steam itself) before and during the weekend, the numbers show that people are willing to buy a lot more games when given a smaller price tag. Few games are as popular as Left 4 Dead, but the effect was visible in other titles too, with an average sales increase of 320% on titles reduced by the same 50%.
Hugely successful games like Left 4 Dead and Modern Warfare 2 are doing just fine launching at a very high price, but most games do fail in making a profit at all. With prices at 68 euros, the average consumer is likely to buy only a few titles a year, and those are probably selected among the few super hyped games. That leaves very thin margins for games with smaller marketing budgets.
When a price reduction of 75% can lead to a 15% increase in profit, then maybe it’s time for the industry to question it’s pricing. Perhaps it could lead to a healthier industry, and increased diversity for the consumer.
Anyway. Can’t wait to finish The Dig. Long live point & click adventures!