Canadians: possible video game price increase incoming

#61NnamzPosted 1/23/2014 12:36:49 AM(edited)
darkstar4221 posted...
If the market crashes because of low sales and inflated costs, there would still be video games. VG companies would just have to readjust their budget and come up with better solutions to have better sales, and higher prices is not the way to do it.


The market won't crash from a $5 increase. It didn't before with a larger increase, it won't now.

The economy is much worse than in 2005, much worse, well in the US that is.


And yet people are still buying numerous things affected by inflation every single day. People are spending more on superfluous things now than they ever did in 2005.



And once again, let's reign it in:

- The Canadian dollar is sagging. It's no longer at parity with the US dollar.
- Inflation costs.
- Increase in development costs for AAA games.
- The fact that the majority of AAA games last gen WERE NOT PROFITABLE at the $60 price point.

All these call for an increase in MMRP. It's long overdue.
#62darkstar4221Posted 1/23/2014 1:45:25 AM(edited)
Nnamz posted...
Here is a common sense question for you: What does that have to do with anything anybody has posted in this topic? What sad little point are you even trying to make with that ridiculous question. Of course people would rather pay less. That doesn't somehow translate into a $5 increase imploding the market, especially when a $10 increase in the past was followed by the biggest software sales of any gen.

History proves you wrong.


It's not about the market "surviving", you just said it yourself people would rather pay less for things. My point is how long can consumers can tolerate an increase in the cost of gaming? If games retail at $65 and video game sales are still high "or thriving", that's bad because consumers are wasting their money and that gives publishers an incentive to keep the retail price at $65.

It's not the inflation you moron, it was the fact that it was more expensive for developers to develop on 7th gen consoles compared to 6th gen consoles, so there was an increase in royalty fees.

To claim that inflation has absolutely no effect on the game's industry is absolutely stupid. It affects all industries in the market. Even the commodities used to develop the games are hit with inflation.

Moreover aside from the FACT that inflation is playing a roll here, you're just justifying the increase. You're just adding more evidence to my point that it has to happen.


I wouldn't pin everything on inflation, you have to take in the IP laws as well. I said it before that blu-ray is almost useless because it's latent with copyright protection. CPU chips are protected by patent law, this increases the cost for console makers who want to use more powerful cpus. Console makers have always wanted to use the X86 architecture but because Intel owns the design of the X86 processor, Intel charges a high licensing fee. So console makers have always went with the PowerPC architecture because it's cheaper and more flexible, well until now thanks to AMD.

One of the reasons why the PS3 hasn't dropped below $200 is because nvidia refuses to allow Sony to shrink die of the GPU (nvidia owns the IP to their gpus), so in turn Sony went with AMD for the PS4. Again AMD being more flexible and cheaper.

Copyright law incentives anti-consumer business practices too. Take the Vita memory cards for example, and Sony threatening to sue hackers (hackers who are giving consumers what they want) for hacking the PSP or any of their other consoles. That's why I've numerous times that the excessive copyright (and patent) laws plays a part in this. And of course copyright increases the cost for software too since it's illegal to redistribute games (ie piracy). Not that I'm for piracy, there are other ways to discourage piracy, and console makers inflating the cost of their hardware and software is not the way to do it.

#2. You just claimed that a $5 increase would destroy the industry right now despite the fact that a $10 increase in the past was met with increased software sales. You can't simply explain that away with the economy. By your logic people would have still been up in arms and game sales would have plummeted. They didn't. They thrived DESPITE the increase and DESPITE the poor economy.


It doesn't matter if it doesn't destroy the industry, an increase in cost is bad for everyone especially in a poor economy.
#63darkstar4221Posted 1/23/2014 12:01:10 PM(edited)
OH MY GOD DUDE! Please never go into business or economics or anything to do with the game's industry because you CLEARLY have no idea what you're taking about.

AAA game development requires MASSIVE funds. At $60, and often times selling several hundred thousand to a million units, the vast majority of games from the previous generation were not profitable. This is not mismanagement. These are not flukes or exceptions to the rule.

You're sitting there thinking that 1 million is some kind of big magical number and that any game that reaches that number should be profitable, else they were mismanaged. You have no idea what you're talking about.

Profits is more than just revenue. It has to offset development costs. Development costs have been climbing for AAA titles, and is now to the point where at a $60 price point and an AAA budget, you need to sell several million copies of your game to break even.

Cutting costs means cutting profits. It means you have to sell whatever % of copies that was cut off from your price in order to have the same revenue. This is something you have repeatedly not been able to understand, instead opting for "1 million is a lot! Any game that sells 1 million should be profitable".


If the cost of AAA tiles are climbing that's not the developers fault, it's more of the case that consoles are more expensive to develop for particularity on the PS3 and 360. If a company needs to sell millions of copies at $70 just to cover development and other costs, there is something wrong there. Because in order to sell copies of video games, they have to sell them at a reasonable price point so consumers would buy them (that's what you seem to be forgetting). Some of it has to do with publishers pushing for much larger budgets. In a terrible economy $70 is a lot of money, $60 is a lot of money.

http://vgsales.wikia.com/wiki/Video_game_costs


The $60 price point was simply too low to keep the middle tier AAA publisher profitable


I'm aware of the costs, I read the link, but raising the price would most mean less sales thus even lesser profits. During 7th gen I think Americans were tolerant towards the $10 increase I don't know about this time. You say it's inflation, but there are plenty of films still being made, are film producers effected by inflation too? In my previous post, I blame the IP laws (copyright and patents) for indirectly inflating the cost of hardware components, I bet some of it has to do with that too. Console makers can take the Ouya approach and get rid of the licensing fees and have a more open platform.

EDIT: Read this link
http://www.gamasutra.com/view/news/108902/Ask_the_Experts_Console_vs_PC_Development.php

It compares cost development for PCs vs Consoles. Developers say that PCs are cheaper to developer for. Although PCs are not perfect by any means because of the monopolies that exist within that industry (Microsoft, Intel, and Nvidia particularly).
#64NnamzPosted 1/23/2014 3:02:43 PM
It's not about the market "surviving", you just said it yourself people would rather pay less for things.


Everyone would rather pay less for things. That doesn't somehow translate into the market imploding if prices go up. Especially given that just 8-9 years ago we had a larger increase and it had no adverse effect on the industry.

My point is how long can consumers can tolerate an increase in the cost of gaming?


The same amount of time that they have been tolerating an increase in the cost of any other superflous entertainment hobby. We are nowhere near critical mass given that gaming is actually cheaper than it was in the early 90's, and it survived back then.

If games retail at $65 and video game sales are still high "or thriving", that's bad because consumers are wasting their money and that gives publishers an incentive to keep the retail price at $65.


If consumers are fine with a $5 increase (which they will be, given that they were fine when games were $69.99 a few years ago), it will allow publishers a bit more leeway to strive to profitability. You need to stop assuming this is nickle and diming consumers and open your eyes to the reality that the VAST majority of AAA games are not profitable at $60. Consumer expectations are not dropping so lower budgets is out of the question for most games. Therefore this is necessary.

Heck, a $5 increase is likely not even enough given inflation and the sagging Canadian dollar, but it's a start for them.

I wouldn't pin everything on inflation


And I am not pinning everything on inflation either. Glad we have that established. Moving on.

It doesn't matter if it doesn't destroy the industry, an increase in cost is bad for everyone...


No, it isn't.

If an increase in MMRP allows publishers be profitable in an otherwise unprofitable venture, it means less studio closures and more games to consumers.

I don't want a future where the middle tier publisher is fully a thing of the past, and if the price of games stays stagnant forever, that's exactly what will happen.
#65NnamzPosted 1/23/2014 3:02:55 PM
If a company needs to sell millions of copies at $70 just to cover development and other costs, there is something wrong there.


Then you're literally saying there is something wrong with virtually every AAA title.

Consumer expectations are high. To meet them, you need a big budget. You also need to spend millions marketing. That's the world publishers live in when making AAA titles.

If something is "wrong", it's consumer expectations. You can't make an console AAA game and not be forced to sell hundreds of thousands to MILLIONS of copies to be profitable.

Because in order to sell copies of video games, they have to sell them at a reasonable price point


And consumers have largely voted with their wallets before and said that $69.99 is reasonable, when they made less money. They make more money now.

You're completely out of touch if you think selling games at $5 cheaper than they were 8 years ago will cause the Canadian market to implode.

I'm aware of the costs, I read the link, but raising the price would most mean less sales thus even lesser profits.


Nope. Higher price would offset the lower sales, keeping profits the same or higher. Moreover once the MMRP drops, who didn't buy it will jump on board, increasing the legs of the games.
#66darkstar4221Posted 1/23/2014 5:12:38 PM(edited)
Nnamz posted...
And consumers have largely voted with their wallets before and said that $69.99 is reasonable, when they made less money. They make more money now.

You're completely out of touch if you think selling games at $5 cheaper than they were 8 years ago will cause the Canadian market to implode.


I thought we were talking about the US market as well, lol. Well I don't live in Canada it's not an issue for me. I heard about some good things and bad things about the Canadian economy. Odd that PS2 games were $69.99 in Canada. In the US they were $49.99 and I know plenty of people who had mod-chips and pirated the hell out of PS2 games. It was the only way you can play the translated version of Front Mission 5.

I don't know what the copyright laws like are in Canada, I heard they were pretty draconian just like in most countries. I don't what the job market is like in Canada, in the US particularity in states like Cali (where I live) unemployment is very high, as well as the taxes, and job opportunities are very low. If the majority of Canadians are employed they can deal with rising video game costs, that's not the case in the US where the job market is abysmal.
#67drags_Posted 1/23/2014 6:46:28 PM
Wow I never realized how whiny Canadians are over $10. The minimum wage is around $10 in every province/territory, is it really going to kill you to work an extra hour to play that game you have been waiting to play for years? If so then wait a few months or buy it used, problem solved.

There is nothing we can do about this except wait it out like last time, hopefully will return to normal in a few months then we can forget about it until next time then repeat the freak out. I have no problem with paying the price to get the games I want on the day of release.
#68darkstar4221Posted 1/23/2014 7:10:12 PM(edited)
I don't want a future where the middle tier publisher is fully a thing of the past, and if the price of games stays stagnant forever, that's exactly what will happen.


I want a future where the copyright and patents laws are abolished or at least government not regulating the tech industry too much. That way publishers wouldn't be so big, the cost of hardware would be much cheaper thus development cost would be cheaper, and there would be more voluntary payment to the developers. I think everyone would win that way the rich, the poor, the developers, and the publishers. I don't know if the government would ever do that, eventually I think the government overtime would realize many of the copyright and patent laws don't make sense. It's being abused by giant tech firms (Sony, MS, Intel, nVidia, IBM, and the like) which allows them to inflate the cost of their products. The US economy is in the verge of implosion anyway eventually the IP laws will be reformed. The US has to keep interest rates at 0% just to continue the "recovery", any higher the US economy would implode, that's how bad it is.

The transition from 6th to 7th gen I saw a dramatic increase in the cost of gaming, it was shocking. The cost of the hardware, the accessories, almost everything doubled in price, no one wants to see that again. When I talk about consumers being vulnerable to high prices I speak from the US side of things. I don't know what Canada is like.
#69NnamzPosted 1/23/2014 7:32:43 PM
I want a future where the copyright and patents laws are abolished or at least government not regulating the tech industry too much. That way publishers wouldn't be so big, the cost of hardware would be much cheaper thus development cost would be cheaper, and there would be more voluntary payment to the developers.


I'm not sure how much of an impact that will have on development costs. I can't look right now, but I was recently shown a couple of articles about the breakdown of development costs. The massive lions share of costs come from paying development teams, which have gotten exponentially bigger over the past years.
#70darkstar4221Posted 1/24/2014 1:46:14 AM(edited)
Nnamz posted...
I want a future where the copyright and patents laws are abolished or at least government not regulating the tech industry too much. That way publishers wouldn't be so big, the cost of hardware would be much cheaper thus development cost would be cheaper, and there would be more voluntary payment to the developers.


I'm not sure how much of an impact that will have on development costs. I can't look right now, but I was recently shown a couple of articles about the breakdown of development costs. The massive lions share of costs come from paying development teams, which have gotten exponentially bigger over the past years.


Since piracy would be legal studio teams would have to find ways to control cost. Studio teams just can't spend $30 million on a Triple A title and expect the game to sell two million copies on a $60 or $70 price tag (ridiculous expectations). Consumers would either pirate the game or pay less for it.

Or developers can be funded through crowdfunding projects like kickstarter, that's another way for Triple A titles to be funded. Without ip laws there would be an incentive for tech companies to adapt to open standards since source code would no longer be protected by ip laws, thus more interoperability with electronic devices. There would be more consoles like the ouya that charge no licensing fees to use their development kits.

There would be less licensing, thus less licensing fees since you can no longer patent an idea. Hardware costs would drastically go down because of that just like you are seeing with televisions, but instead console systems are actually increasing in cost compared to previous generations, I find that strange. So that's what would bring development costs down. Cheaper hardware thus cheaper to develop on those consoles, and more of an adaption to open standards. No more complicated cpu architectures like the cell cpu, anyone can manufacturer the x86 processor without paying Intel a licensing fee. You know things like that.