by ChiefJimbolaya
OXCGN’s Correspondent in the U.S.
© 2009 Aaron Klein
What’s more ridiculous? Gamers talking about a boycott of Activision over prices, or a uniform cost for games regardless of quality? I say the situations are equally ridiculous.
Activision recently announced the price of Modern Warfare 2 in Great Britain will be 55 British Pounds ($90 US/ $109 AUD), a 5 Pound increase ($8.50 US/ $10 AUD) over typical retail price there.
Will You Be Going To War Against Activision?
Analyst Michael Pachter told Eurogamer the price increase is a test by Activision to see if it can get away with charging more for its premium products:
“Activision knows it has a ‘hot’ game, knows that the market will pay an additional 10 per cent, and has decided to increase price accordingly.”
Pachter thinks the question of whether this is fair is “a difficult one” to answer. Games, he explained, are cheaper to buy today but contain better graphics, gameplay and online functionality.
And the latter service, while free to users, costs Activision to provide – although Xbox 360 owners must pay Microsoft for the privilege.
“My guess is that this is a one-time test for Activision, and that they will re-think the strategy after seeing if it angers consumers,” offered Pachter. “If there is no consumer backlash, I think we may see higher pricing on other games, regardless of the GBP/USD translation rate.”
And of course this move has enraged a few gamers, who PS3 News is reporting are turning to piracy and boycotts to attain satisfaction. As of this writing the petition has over 10,000 signatures.
The petition states:
As the “biggest entertainment launch of all time” approaches, you’re increasingly making your fanbase more angry. Your recent moves on the business side are head scratching and completely apauling. Tony Hawk peripherals to start, PC and UK price hikes and ridiculously overpriced collectors editions for MW2. Gamers were left scratching their heads wondering why?
Than your CEO decided to further anger your customers with this quote “And Tony, you know if it was left to me, I would raise the prices even further.” I believe we are in what we call a “recession.” What the consumer needs is not more expensive items, but less expensive, which we’re obviously not screaming for you to do.
As people we speak with our wallets as we know you wont hear our words. Everyone who signs this petition disagrees with your approach and your smug attitude. The undersigned agree not to purchase your game at full retail value.
We instead will either choose to A.) not purchase MW2. B.)Purchase only in used form allowing no revenue for you. C.)Import from a cheaper country. This may not seem like much of a threat, but the internet is a large place and your wallets may seem a little lighter come Christmas time. Thank you.
Piracy is an entirely separate issue I don’t want to wade into right now. The people who pirate the software already have their Xbox’s modded to play pirated discs and were probably going to steal the game anyways. This just helps them ease their troubled conscious by providing a weak rational.
These are tough times, and $90 US is steep for a game. (Ed note: The RRP price for a standard Modern Warfare 2 game in Australia from EB Games is listed at $119 AUD. That’s over $99 US at the moment).
The outrage is completely understandable. Especially during a time when the economy is bad everywhere and it seems like there are only gray skies.
To have your favorite form of entertainment suddenly join the fray and pile more financial burden on your plate can seem like a betrayal.
But you don’t have to buy it if you don’t want to. And maybe it will come back to bite Activision in the ass. Or maybe it will lead to more sanity in the price of games.
Game publishers and developers don’t owe gamers anything other than a entertaining diversion.
Some games are more entertaining than others, providing a higher quality experience. Why shouldn’t better games cost more? Steak dinner costs more than a ham & cheese sandwich.
The majority of games released fail to recuperate costs. A few Triple-A games, like Modern Warfare 2, pull in the bacon to cover the losses of the failures. Much like the revenue from the football team in collegiate sports pays for the gymnastics squad.
But if publishers can see that some of their best work has more value and can set a price according to demand, it follows that hopefully they will see that other titles are way overpriced for the entertainment they deliver.
Either way, a flat price without account for quality for all their products seems to fly in the face of basic economics.
Some of those under performers may have a chance at recuperating costs if they were priced more economically and made up for it in volume.
Activision: a company that likes money...woah!
I wouldn’t be as angry if a shorter game cost $20 US or $40 US instead of $60 US. Battlefield 1943 is an example of smart pricing: at $15 US it is a great value and has enjoyed great success. If the same game cost $60 US you would be reading vastly different reviews.
Gamers should not be afraid of the profits of game companies. These profits allow them to take more risks by investing in new IPs and gaming conventions.
Conversely game publishers should also be wary not to lose their social relevance by pricing their best products out of reach for their core fans.
But if they’re going to price a game higher than its peers, they better damn well ensure the experience is worth the cost.
© 2009 Aaron Klein
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Filed under: Console gaming, Editorial, Game Industry News, GameBanter, Industry News, New Xbox 360 Games, Xbox 360, Xbox 360 News Tagged: | "5 Pound increase", "Activision petition", "Call Of Duty Modern Warfare 2", "UK price MW2 hike", 360, Activision, Analyst Michael Pachter, Eurogamer, Game pricing, Great Britain, Microsoft, Modern Warfare 2, MW2 petition, PC, Price increases, PS3, RRP, Sony, Xbox, Xbox 360
We have a very small number of that percentage that will be willing to shell out more money on Collectors editions. Making the importation and distribution of those a non-viable situation for the companies that do the importing and sales to retailers, I know this, as I’ve delt with them, and had to do similar things myself over the years with import-export.
and i still cant understand why we are paying double what the US is.
most games in the US are 60 USD.
last time i checked 60 USD is roughly 86 AUD NOT 120 AUD!
so why are we paying $34 more than the US?
and we get the games later.
and we miss out on half the content.
when it comes to video games Australia is treated like a 3rd world country (not price wise, i wish) and im sick of it.
Actually, while we pay more,most of that is taken up in $ the US do not include in their price, as they then must includeSales Tax on top of the marked price. Secondly, our prices include our sales (GST) taxes . . . and also
We here in Australia have a HUGE amount or land mass to cover, with far less road infurstructure than the US, our country is isolated populous yet a huge area mass that the goods must traverse in order to get to their destination. We have only 2 main ports for importing goods, Sydney and Melbourne. Goods for Perth arrive here in Melbourne, an dthen are shipped to Perth via road or rail, and at each point, you have trucks, and personel that must deal with it.
In the US, you have several ports, many airports with large cargo plan capacities and the delivery abilities to handle quick delivery.
All goods then must be shipped by rail and or road to their destinations, then freighted to the warehouses, then to the stores. All adding to the costs at the ned of the line.
Whereas in the US, their network of distributation is much simpler, and far less manhandling is involved loading, unloading and reloading goods etc.
Remember, everyone that unloads these goods at any of those points must be paid, the companies must get their funds for the services they supply.
We are not the only ones that are to be considered here, every person along the chain of delivery and sale is considered.
fair enough.
granted though game prices need to drop here 120 bucks a pop is allot.
im blowing 3K per year on games as is, not to mention accessories and such .
gaming would have to be the worlds most expensive hobby, only if i could turn that into a profession. besides games journalist.
We don’t have a national sales tax. Each state or city can decide to have one or not. In Omaha, Nebraska here we have a 7 percent sales tax. So the full cost of a game is $63.84. The city uses the money on infrastructure and other services.
And I thought that was expensive. Jeez. You Aussies really get a raw deal. I imagine xboxoz is right. Missing out on some titles probably boils down to the cost of importation and distribution and the size of the market. Or maybe the companies are punishing you guys because of the lack of an 18+ game rating…
If you’re good at StarCraft I hear professional gamers are treated like boy bands in S. Korea.
wow so the UK are complaining about 1 game being the price of what most games here are.
jesus christ come live here guys, at least yous dont have to wait months for games, and yous get limited edition to sony released games for some unknown reason we dont.
One of the main reasons we do not get many of the smaller games, or certain collectors editions or special release items is due to our population size and location. We account for just 1.5 – 3% of the world games market. We have a very small number of that percentage that will be willing to shell out more money on Collectors editions. Making the importation and distribution of those a non-viable situation for the companies that do the importing and sales to retailers, I know this, as I’ve delt with them, and had to do similar things myself over the years with import-export.
Many of the great Resi % items readily available in the UK (high population in small area) and the US etc simply could not be brought into here by the company that had the rights to do so (HES) as it was simply not viable for the numbers they sell. They simply would be getting the goods in, selling them and losing money for the effort.
If you were running a “business” to make money, which we all would be if we were in business, then you would not be getting stock in that could npt be turned into a profit, no matter HOW much you might like the product – period.
true but its normally sony products.
like resistance 2 killzone 2 little big planet haze.
the US had limited editions to all of those games, we missed out.
but than look at 3rd party games like fallout 3 MGS4 resident evil 5 devil may cry 4 modern warfare 2 assassins creed assassins creed 2.
every single 3rd party game i can think of that has a LE in the US has one here.
or even look at microsoft published games.
halo 3 gears of war gears of war 2 perfect dark zero L4D halo ODST.
they all have limited editions here and in the US.
if these 3rd party companies can afford it, if microsoft can afford it, why not sony?
last time i checked sony is a milti billion dollar company, and could probably by out capcom and bethesda with change left over.
Perhaps it is not in Sony ANZ market plan due to distribution/sale % ratio.
Put it this way, many of the major companies can float some lose on items such as LE/CE’s in some cases, and if the platform that they make/publish games for has a high turn over of (buyers) for such items in that market, then they will no doubt chase the possibility of such items.
Sony seems to have the thought that due to smaller sales overall with the attachment rate, which is well below the attachment rate for 360 btw, then it’s not in their best interest to make a region specific artworked up item, including packaging, inyternals, promotions stuff such as shop front items and what they term POS (point of sale) bunting and banners etc etc. To invest in that, then get no return or very little but no profit, then it make no sense whatsoever to do so.
Whereas MS and it’s publishers thrive on them, within reason, here in Aust-NZ.
If youy had to run a major company, and you were accountable to the shareholders, who btw, give you money in advance via stocks and shares (read investments for R&D) to bring out new games, and bringing in profit is the only thing those investors are interested, and that’s why they are investors, to make money. Then you’d be thinking twice about shelling out funds on ventures that yeild you no, or very little return.
Put it this way, we all know how big HP is , especially here in Aust/NZ . . A good friend was the PA and EA (Personal Assistant and Executive Assistant) to HP COE and NZ CEO and their market share for the whole Aust/NZ region was at the time just 1.7% of the global market share.
It’s one of the main reasons they have had to move ‘offshore’, as having offices and distribution locally simply was not allowing them to move forward in any way, and were peddling backwards due to our high wages, taxes, shipping cost, sales wars etc etc.
Now, cut that down to our level with games, which is far less than HP’s multiple SKU’s across theboard, and you can see just HOW small the gaming market is for distributors who bring in the games and items. Many have to sign up for a certain number of items if they wish to distribute the goods (games), and if they don’t meet those targets, then they lose the next round from the parent company that publishes the games. So you can see, it’s not so simple or cut-n-dry as many gamers might think it is.
Red Ant went bankrupt doing just that in less than 2 years, not a pleasent thing to ohappen to any company, andthose who started it, and who worked for it. Would you like to be in that boat, I’m certain you wouldn’t, so spare a thought when you complain about not habving a certaoin game.
true, but to improve their sales down under they should open everything up to us.
if they restrict what we have available to us than were not going to buy it, if they offer everything to us we would buy it.
example
i even talked my local EB store to import the killzone 2 guide because a few people were asking for it, they brought 20 in from the US and they were gone in a few days, after a few weeks they have sold hundreds because i convinced them to do it.
sony needs to learn how to advertise.
may be arron greenburg can show them how its done, i see 10 xbox 360 adds and 10 nintendo adds per 1 sony add.
when gears 2 came out i couldent step out my door or turn the TV on without seeing a gears 2 add.
but than i have seen 5 adds for infamous, and killzone 2 put together.
i think it would be interesting to see what would happen if the big 3 (MS sony and ninty) started treating oz as their main sales point, if they marketed everything here, sold everything here if that percentage would change.
i think it would.
if your product is not selling well in a certain area restricting its access is not going to help the situation
As much as we might like to think, we are NOT a very large sales point for games in teh world, let alone any other major product.
Why . . Well we have a population of 22-23 million. Of that, a small percentage are gamers, and of that percentage, most buy normal games not CE’s or LE’s etc. Now given that the population of the US is in excess of 300 mil, and their gaming percentage is in excess of our entire population, then add costs to bring in even one special item to sell to a handful of ppl locally, it simply is not worth it to do so. When you start to understand the mechanics of owning and running a business, you’ll understand, as no one goes into business, no matter how altruistic they might be, not to make money.
It’s the nature of business to make money to enable them to stay in business. You don’t go spending large sums to get back small sums . . A good friend is the marketing manager for a major publisher here, and when you see the numbers they have to bring in in order to secure a deal, you’ll see why they don’t get slow or small moving items. They bring in items that will sell bucket loads (in excess of several thousand), not a few hundred.
I agree with that whole article. Gaming companies know people are going to buy there games, nomatter how hight the price. I guess the rich people need more money to blow on stupid shit while us average joes who just want to enjoy some video games go broke in the process. Greed is what this recession is about.
That’s complete horseshit. Crap games are released at full price, nobody buys them, a few weeks later they are half price or less. A few weeks on again, and they are £15.
Modern Warfare 1 is still retailing over £30 on average. It is amazing.
Kung Fu Panda is selling for 37p. It is shit.
Grand Theft Auto IV is still selling for £25 – £30 on average. It is brilliant.
Lego Indiana Jones is selling for £1.75. It is garbage.
Do you see the pattern here?
Hey my 6 year old son and I disagree with you on Lego Indiana Jones…
There should be no problems with a developer making a profit on a game. The huge profits should come from a company making great games and selling millions of copies. Not from gouging loyal customers just because you think you have a hot product. That is what I am most upset about and will show it by buying a used copy of the game if I buy a copy at all.
This whole write up is garbage and completely out of touch with reality. Over looking the real issue here and justifying as if it really is worth the much higher price? This is corporate spin at its finest. The piracy part is out of most all “normal” consumers hands. It will happen regardless as with any other game out there. I think like what was said more than none. Is player’s will buy the game used now instead of direct brand new. But at the end of the day, this game is not worth more than it’s predecessor. Reason? Many say WOW was a flop compared to MW. Yet, paid the normal high retail for that game. Only to have most trade it in or list it on craigslist within a month or two. Now this new game goes back to MW.
So it’s a new game of the same game play. So there’s no guarantee this game is going to blow people’s minds for the extra $15 bucks or so on top of it’s normal $60 price tag. The game would also just be pricing itself out of the consumer price range. I for one will get it used of Craigslist when I start seeing them with in a month.
I myself if I’m not sure of a game will not pay full price either…but I also look beyond the “metacritic” view of a game at what I personally like.
I didn’t like Killzone 2 for example, even though I like shooters, but the majority who played it did and look at the Metacritic score or here on the site with our look at it. Luckily I borrowed it.
COD: WOW was fantastic in my opinion. You might not agree.
I’ll be paying full price for AC2 because I’m pretty sure I’ll like it, but a lot of others I trade for or buy used too. There’s too many games not to!
What happens when everything is digitally distributed though…the PSPGO will mean you cannot buy used games anymore for it. If next gen the consoles do the same, then what will we do?
The title of this post says it all: You get what you pay for. That’s commerce in a free market. Activision can charge what it wants; consumers can boycott or decide not to buy it. If Activision makes enough money off the price hike from consumers who feel the game is worth it, Activision wins. If not, gamers win — although the price will still probably be higher than it was (see: gas prices).
The interesting thing to me here is “someone’s brother” comparison on movies. Yeah, movies are the same price at the average theater. What about IMAX? What about 3-D? Higher quality and more features means higher price.
The market does not owe you a uniform pricing scheme. But that won’t prevent the drama, will it?
Thanks for stopping by William.
What I wrote was that PS3News reported gamers were turning to piracy and boycotts, then gave an excerpt of your boycott text to illustrate a boycott. I can see how it might be misconstrued that the boycott promotes piracy by being mentioned so closely to the idea of piracy. That can certainly be clarified.
Nothing against your boycott, though. I’m sure Activision knew going in that they would lose some customers. And boycotts are certainly a healthy part of the free market system. I simply think a tiered pricing structure would be benefit all of us. Gamers and publishers.
I wrote the petition, and I do in no circumstances stand behind piracy as a means of hurting Activision. The petition is a way of trying to notify them that A. we don’t like the CEO and his smug comments. b.) you don’t just change prices because you just want to and c.) We will either avoid your products or buy your games used so that we ensure you see no revenue and we help small game stores, not you. But thank you for the free press…
Nothing wrong with the petition and gamers actually shaking off passivity to voice their concerns is healthy. We in Oz are currently trying to make a difference on the R18 issue…but not getting far…
That was me, not DK who wrote this article.
Didn’t write this to be divisive, although I thought it would be.
Publishers already do it the other way. Maybe not on release day, but certainly some games come down in price after the publishers see the supply/demand point fall. Or after they’ve made enough money on a big hit.
Not a tory. I’m an American. I don’t even know what a tory is. But I suppose by the implication that it’s something like a republican. And I’m not one of those either. But I do believe in the free market system and that profit drives innovation.
I’m also not saying I would buy a $90 game just because it’s popular. But I might if it was worth it. If it was somehow innovating the medium. Just look at all the people who bought Guitar Hero and Rock Band for more than $200. They bought it because they saw the value and it was worth it. Those who didn’t buy it didn’t see the value. The world turns.
What a load of bollox.
Seriously, did you write this to get some hits over at your website?
You knew the majority would disagree.
The game developers aren’t going to do it the other way
“Here have this game cheaper, we spent all but five minutes on it, and we don’t enjoy it as much so have it for £25 instead of £50″
Get a grip!
dkpatriarch – are you a tory? Obviously you don’t have to live within your means with your crazy talk. What a crock of shiet.
Lol…not me who wrote it but I might as well wade in.
I’m personally happy to pay more for a AAA game that cost more in people and time to produce. As long as it is superior quality and offers more.
However, this would only be okay for me if lesser games (many of which I still enjoy playing, especially if they are shooters) cost less to reflect the difference.
I do not think this is likely in console games because most console gamers will immediately assume that cheaper price means an admission that the game is crappy. Publishers won’t want that obviously.
This isn’t so in the PC game market where games often have different price points based on finished product and aim at different price points to begin with. There you can often buy games at different retail points.
Another problem of course is if the developer thinks their game is AAA and prices it higher but in reality it is disappointing. But they will lose buyers if they get a reputation for dudding people.
Then there are the AAA games like Dead Space that don’t grab the retail attention they deserve and so the price drops almost immediately, which is a loss to the publisher (EA in this case).
So as you can see it isn’t always quality that can determine price but it sure would be nicer to be able to pay a lot less for lesser games you want to try out instead of having to wait for used copies on Ebay.
By the way I voted Labor (Australia) last election and vote according to the policies of the party prior to the election…I’ve voted both sides in both State and Federal elections depending on policies. I don’t personally think politics should be like supporting a sports team or brand of car with blind loyalty. But each to his/ her own.
First, I agree. It’s totally people’s right to boycott a company. If you want to, more power to you.
Video games are not exactly like movies. Movies make money in the box office, then again through DVD sales, then again through syndication fees and rentals. Maybe the one-price-fits-all scheme works well for movies because they have so many other opportunities to recuperate costs.
Video games basically have one shot, the retail market.
And I am taking into account the cost of goods. It costs developers and publishers more to produce and market a top-tier game, the same way the steak does.
Nobody likes higher prices. I hate them. I wouldn’t buy MW2 for this price… unless it received a lot of praise and buzz and offered a lot of replayability.
But I’m all for innovation in gaming. And that includes innovation in pricing. Especially when our friends in Britain are the guinea pigs… hehehe…
If all games cost the same, you can expect similar experiences. There’s no incentive for a developer to try new things because the reward is the same. Now if they knew that they could make MORE money by going the extra mile and including better graphics/peripheral devices/better AI/better multiplayer/etc. Don’t you think we might end up with better games in the long run?
If people object to it it’s their right as a consumer. We need more of this not less, it’s smart and it supports the whole idea of a free market. Companies have gone from greedy to extremely greedy and they should be punished for it, we should not seek ways to justify their actions.
I am fully aware the point of a business is to make money, to push the costs off on consumers before trimming their own fat is inane, maybe they should trim off a few CEOs?
I think you are confusing pricing based on perceived value vs cost of goods. A steak dinner costs more than a ham and cheese sandwich because it costs the restaurant more to provide you with a steak dinner, so if they charged ham and cheese prices, they would lose money.
Video games are like movies. We don’t go to the movies and pay double the ticket price because the movie is supposedly better. Even if the movie cost over 100 million to produce compared to a 20 million dollar movie, we pay the same price. In this case, the quality of the movie should sell more tickets as opposed to the steak dinner which has a higher price and will most likely sell to less customers. MW sold over 10 million copies and has been an nice tidy profit for Activision, so they are not losing money.
I think that last line is the key:
“if they’re going to price a game higher than its peers, they better damn well ensure the experience is worth the cost.”
A games have launched at prices different from the norm such as Banjo Kazooie: Nuts ‘n’ Bolts and Viva Pinata, both starting out at $69.95 AUD.
This didn’t seem to have any effect however – sales of Banjo were mediocre despite being of extremely high quality and with more content than many other games. It seems people don’t actually pay much attention to lower prices, but higher prices rile everyone up.
Eg: have people noticed all Sony first-party games for PS3 have an RRP of $109.95, while Microsoft’s 360 games are $99.95. I don’t see PS3 owners picketing outside Sony HQ, but the equivalent price increase from Activision causes mass chaos.
I don’t think the main issue is the price increase – it’s the messed up PR Activision has had around it. Pachter has been handling the price increase terribly, with quotes that are easy to take the wrong way.
After all, there were plenty of games launching for the same price earlier in the generation. CoD3, The Darkness, Transformers and many more launched with their PS3 versions priced at $119.95 AUD.