This came up in a recent OMMA Gaming Insider post (see comments): I argued that games are too expensive ($50 video games, that is, not $10 XBLA titles). The article’s author countered with the old cost-per-hour-of-entertainment rebuttal.
Hey, I’ve made that argument myself in the past. But I see the err in my thinking now. The argument is flawed by relying on a wrong premise: I pay $15 for a DVD and it gives me 2 hours of entertainment; I pay $60 for a game and it gives me 40 hours of entertainment; thus, games are a better value for your entertainment dollar.
Well, you could maybe make that argument in comparison to buying a ticket to a movie theater (where you do get 2 hours of entertainment for $7.50, or $3.25/hour). So, for a $60 video game, I’d need to put in 16 hours of gameplay to equal that. Not unreasonable, though definitely beyond the time investment the industry should expect in order to grow its audience (for most games).
But the real comparison is to DVDs or CDs. The gamer always seems to argue that, for some reason, DVDs and CDs don’t have replay value (or perhaps it doesn’t count?). I have CDs that are 10 years old that I’ve easily listened to 100 times. So, that $15 investment yielded at least 100 hours of entertainment or $0.15/hour. The last DVD I bought? $20 for a 2 hour movie I’ve already watched twice and will probably watch a dozen times during its lifetime: $0.83/hour.
So, how about we drop that argument as we’re really just trying to justify to ourselves why we spend too much on games. Because it is too much. *Most* video games are made for less than *most* movies, but because they *appeal* to a smaller audience they have to charge more to break even. But I’m not arguing for a dumbing down of games to appeal to larger audiences… the real solution is a dramatic overhaul of how games are made, marketed and sold.
I think it’s ironic how conservative our business is. And shameful. XBLA is the closest thing out there to a “better way” of selling and distributing games. As XNA improves, production costs will go down. As developers worry less (and audiences demand less) in regards to poly counts, production costs will go down further (as team sizes and schedules shrink). As distribution goes digital, those costs will drop. With free demos and social recommendation engines, marketing costs will drop.
And best of all, if consumers are only paying $10 for a product they won’t be upset if it doesn’t deliver 40 hours of entertainment. They’ll be happy with 10, or even 5 if they’re really good. Which further drives down production costs (and testing, and distribution). Which means that $10 has more and more room for profit.
And it also means that there’s more and more people who can afford it. My $50 game budget just got me 5 different games (variety, the spice of life!) instead of one game. That means 5 different developers got my vote of confidence. 5 different ideas got legs in the marketplace. Variety thrives. The medium evolves.
There’s also less pirating because it’s easier and faster to pay $10 for the real thing. And because pirating is no longer a big worry for developers their costs go down (no SecuROM licensing, for example, or extra time spent developing counter-measures).
I believe that if games cost $10 – $20 each the industry and its audience would grow dramatically. I’ve never seen any evidence that challenges that theory, but I’ve seen an incredible amount that bolsters it.
Amin!
I don’t know much about Gaming business, but your description of the buyer psychology fits me very well.
When I was at Microsoft, we got Microsoft-published games for $10-$20 each (instead of $50). As a result, I bought 1 or 2 copies of every new RTS game that came out. Even though I played them only few hours (I gave the others as gifts to my brothers).
on the other hand, I bought only 1 full-price game in my life (War Craft 3). Reason: friends at work wanted to play a tournament. as you can expect, I spent maybe about 3 hours playing it, not 40. the $40-60 price tag is what prevented me from trying out games I might like.
hoping for change…
And this is how were trying to evolve the Argentine game industry into revenue-independence. (I took that job btw.)
Good article. I posted about it on my website (which focuses on Gaming in Texas):
http://texangamer.com/2008/09/15/troy-gilbert-games-are-too-expensive/
Basically, youre right. I just bought CoD5, but I was very close to not buying it. I actually played thru it in single player first (pirated) and then bought the game for the multiplayer. But that’s it, if it wasent for the multiplayer beeing so good. I wouldnt ever have bought it.