Economics of Game Prices

[Kenogu Labz]

Economics does not mean reduced prices.

Just like many people enjoy having physical copies of books over e-books, some would prefer to have a hard copy of a game they can install from. And for consoles, you really don't have much of a choice, especially when available memory is limited. You can only copy so many games to memory, and consoles are designed to run relatively quickly from discs. And if the publishers handle marketing strategies and project funding, then there's really no way to separate them from the market without killing it.

Basic C++ or Java would not be enough to create a fully-fledged game, even text-based. You would need to understand how to design a system that is properly modular, very efficient, stores its data in a highly-compressed manner, retrieves it and expands it quickly... not to mention having to make it flexible enough to accept a new DLC package with all its resources and have it seam flawlessly with the original game. Plus, you'd probably want some sort of system to search for and download said DLC. Overall, I'd say two years minimum.

[sephfire]

Anyway, so economics of game prices is the topic, huh? Ok. You want to reduce game prices?

All digital distribution. Cut out Gamestop, cut out the publishers like EA. Take the iTunes approach to game distribution; iTunes reduced the price of music by over 50% (average CDs used to be ~20$ for 10-12 songs; now, you can get a full album for ~9.99$, with .99$ songs). Cut out the bullshit middleman, and the price of games PLUMMET. You can have publishers for brick-and-mortar stores, but those stores will be used solely by people who don't have internet connections that can handle the DL speeds.

For the rest of us who ARE net connected, we get any game we want, without worrying about stores being closed, direct to our consoles / drives, at DRASTICALLY lowered prices. Win.

I think this is where the industry desperately wants things to be eventually, but it's going to be a gradual process to get there. Many game customers have never connected their console to the internet and many more have never even considered the option of digital game purchasing. Broadband access and adequate hard drive space still aren't available on a broad enough scale. That cuts out a huge chunk of your potential consumer base, a scary prospect. And sure, cutting out the retailers will allow for lower prices, but you've still spent multiple millions of dollars making the game, and now with a vastly smaller consumer base to sell to.

This model will eventually be much more viable, but it's definitely not a sure-fire route to success right now. There's a reason almost no one is doing it.

At this point, the industry and retailers have an uneasy truce going on. Gamestop is kinda screwing the industry with the secondhand market, but the industry needs them, so they put up with it. Undercutting Gamestop's prices on the digital distro side would be declaring all out war. Gamestop might stop carrying their products altogether, which would be devastating. Retailers have all the power right now, but hopefully that power will be shifting pretty soon.

[The Damned]

To the extent of my knowledge, you have to know first-year concepts to GET to the point that lets you make games, don't you?

I'm fairly confident that I could, with basic C++ or Java, program a Pokemon clone that was text based and had DLC. It's like a year one programming assignment. I made a game that did exactly that in my first year at DigiPen. We didn't know how many maps we'd have, we didn't know how many moves our protagonist or enemies would have for combat, we didn't know how many interactive items would be in the game... but we made the whole game engine modular so we could make an infinite number, and the game could handle it. I have the files on my hard drive, if you want them.

Seriously, it's not that hard.

I never said it couldn't be done. Your first year level shows that. I'm saying that they haven't before, and they most likely wouldn't in the future.

You know why? The very topic (now) being discussed here. Economics.

Why would any company produce that much new content, and then take the option to only give it away as DLC? They stand a much better chance of making more money by selling it with new aesthetic material as well, call it a new game, charging a full price for it. That's just good business sense.

[JackKieser]

And, it's "good business sense" that blatantly takes advantage of consumers, so we shouldn't support it with our money. Again, that's why I don't buy Pkmn games anymore: because I want to force the Pokemon Company to make and sell their games differently. Wasn't that a point in Sephfire's video? If you don't like it, don't pirate... just try to change the system?

I fundamentally disagree with Nintendo's business practices on Pokemon, and with the major publishers for almost ANY game. They screw the dev teams, they screw the consumer, they screw indy game devs. It's good business... that should be changed.

What's wrong with that?

[Pyrion]

I think this is where the industry desperately wants things to be eventually, but it's going to be a gradual process to get there.

Part of the problem is that in order for the digital distribution-only model to work, you either have to create the system itself or sign with an online publisher (Valve/Steam, Stardock/Impulse, IGN/D2D, etc) and tie your game to that particular service almost exclusively. It's more an antitrust concern than anything else, particularly in the case of Valve's "SteamWorks" API wherein all the functionality of handling things like DLC, game updates, achievements, etc., are provided to game developers for the low price of absolutely free but with the caveat that using it means the game absolutely has to use Steam.

So you end up with brick-and-mortars and Steam's direct competitors having to sell licenses and downloads for a game that would still require their competitor's service to install and use it anyway, which leads to the obvious implication that for each license sold in those alternative channels, the developer loses money equivalent to the difference they'd make if they just signed with Steam exclusively.

[JackKieser]

Wait, what? Why? Why can't I just buy a server, make a website, and distribute downloads myself? Why do I need Steam? I agree, for console games, you're screwed into using XBL or PSN for now, but on PC? You don't even need a publisher at ALL.

[Pyrion]

Wait, what? Why? Why can't I just buy a server, make a website, and distribute downloads myself? Why do I need Steam? I agree, for console games, you're screwed into using XBL or PSN for now, but on PC? You don't even need a publisher at ALL.

There's nothing stopping you from doing it, except of course that you likely will gain nowhere near the level of product exposure that you would via signing with a well-known and established online distribution system like Steam. You'd have to do all the advertising yourself, basically.

[The Author]

Wait, what? Why? Why can't I just buy a server, make a website, and distribute downloads myself? Why do I need Steam? I agree, for console games, you're screwed into using XBL or PSN for now, but on PC? You don't even need a publisher at ALL.

Because Steam works.

At this point, I am not afraid that in 2 years, Steam will shut down and make me lose my collection of PC games. Your home server is nice, but it lacks visibility.

And if you want another option for digital distribution, look at Newgrounds.

Ok, stop laughing and look at it again:

A website that distributed free gamin experiences on a massive scale. Sucks that the creators get the shaft on the financial reward side of things, but it'S another form of viable digital distribution.

Why does it work?

Because it's big enough to work.

A small scale digital distribution network is gonna have a hard time dealing with issues of bandwidth, controlling the download and accounts, managing the money. Frankly, when you have the choice to figure out how to distribute the games yourself or sign on with Steam, well, going with Steam is one way to make it less expensive.

[Pyrion]

Frankly, when you have the choice to figure out how to distribute the games yourself or sign on with Steam, well, going with Steam is one way to make it less expensive.

And once you recoup the production costs, everything past that point, regardless of Valve's cut, is pure profit, and you stand to make more of it per sale than you would if each sale is divided up amongst multiple middlemen.

Plus you don't have to administer the distribution system, Valve (and their many hosting partners) does that for you as part of the deal.

[Imagist]

And, it's "good business sense" that blatantly takes advantage of consumers, so we shouldn't support it with our money. Again, that's why I don't buy Pkmn games anymore: because I want to force the Pokemon Company to make and sell their games differently. Wasn't that a point in Sephfire's video? If you don't like it, don't pirate... just try to change the system?

I fundamentally disagree with Nintendo's business practices on Pokemon, and with the major publishers for almost ANY game. They screw the dev teams, they screw the consumer, they screw indy game devs. It's good business... that should be changed.

What's wrong with that?

Here's where your logic falls through: new costumers. Sure, you may think we're getting "screwed over" because we're being "forced" to buy a new game every time they add some new Pokemon, but what about people that haven't been introduced to the series before? What about kids who are just getting old enough to play these games? You want to make them buy a game that's several years old and then purchase extra content packs just to be talking about the same monsters their older friends are at the moment? Add-on DLC is not the best option from the corporate viewpoint, because it assumes all customers are long-standing ones, basically shutting off all potential for a growing audience.

This is actually where some companies, I think, do exceedingly well. Rock Band, anyone? You can buy pretty much any game in that series, and while you're locked into whatever feature set it has (because, as you, Jack, have illustrated with your Mass Effect example, changing the core mechanics of the game rules out add-on DLC), you can pretty much purchase and play any song from any other game in the series as you wish. Now that's and interesting system worth analyzing.

I do think one argument you're making has merit, though. Games don't need to be distributed by physical copy alone. But they aren't. Look at Wii/DSiWare, X-Box Live Marketplace, PlayStation Network. Look at Steam. It's not that the industry is ignoring this method. It'll just take some more time before everyone opts in.

EDIT: Just in case it wasn't clear, if entirely new games were to be included as DLC, most companies would have to charge you for that content. These things take creative and developmental manpower. Some interesting twists on this, though, are Guild Wars and EVE Online. One blends its separate content releases, all of which you pay for separately, into a single game world that changes depending on what you've purchased, while the other releases full-size content patches while simply charging a monthly pay-to-play fee. While Guild Wars would be an interesting role model for the Pokemon series (think Gold/Silver, where you could go back to Kanto, but with every region playable with just one cart), I don't think people would be too happy about a pay-to-play Pokemon.

[The Damned]

And, it's "good business sense" that blatantly takes advantage of consumers, so we shouldn't support it with our money. Again, that's why I don't buy Pkmn games anymore: because I want to force the Pokemon Company to make and sell their games differently.

Good luck with that. The hundred million other people around that world that buy the games won't participate with you, but hey, they will be busy playing what is being touted as the best of the series to date. Hell, it was the first Pokémon game that got a 40.40 from Famitsu. Yes, yes, "Famitsu scores don't mean anything anymore" and all that. That doesn't change the fact taht it has, on average, scored very high, and some reviews rank it higher than any of the other generations.

I fundamentally disagree with Nintendo's business practices on Pokemon, and with the major publishers for almost ANY game. They screw the dev teams, they screw the consumer, they screw indy game devs. It's good business... that should be changed.

Not every company screws their people. Bioware is actually a nice place to work at. They have nice offices, great break rooms, and are flexible with family issues and timetables for projects. Before you ask, yes, I do know some of them, and I have been to their offices before, on several occasions. My cousin Tracy is married to one of the writers, I went to school with a few of the current staff, and I have a friend that went to school with others of the staff. I've met both Ray Muzyka and Greg Zeschuk personally, I even interviewed them for a pre-entry requirement at another school. Trust, me, Bioware aren't like EA is supposed to be.

Nintendo, MS and Blizzard, all big names, offer all kinds of support for their workers. They don't shit on them, they don't treat them like shit,and they aren't like EA.

In fact, I'd say that there more "nice" companies than there are shitty ones.

As for screwing the customer... how are they doing that? You want to make these broad claims, start backing them up with some examples. Otherwise you're just painting everything as being bad "just because".

[Pyrion]

Also, this makes for a good read on the subject of Steam and indie developers.

[JackKieser]

Good luck with that. The hundred million other people around that world that buy the games won't participate with you, but hey, they will be busy playing what is being touted as the best of the series to date. Hell, it was the first Pokémon game that got a 40.40 from Famitsu. Yes, yes, "Famitsu scores don't mean anything anymore" and all that. That doesn't change the fact taht it has, on average, scored very high, and some reviews rank it higher than any of the other generations.

So, basically, "You'll never change anything, so don't try." Yeah, no.

Not every company screws their people. Bioware is actually a nice place to work at. They have nice offices, great break rooms, and are flexible with family issues and timetables for projects.

Bioware is a dev firm, not a publisher. I'm not asserting that dev companies are dicks (although I'm sure some are quite draconian), I'm asserting that PUBLISHERS are. You're missing the point.

Before you ask, yes, I do know some of them, and I have been to their offices before, on several occasions. My cousin Tracy is married to one of the writers, I went to school with a few of the current staff, and I have a friend that went to school with others of the staff. I've met both Ray Muzyka and Greg Zeschuk personally, I even interviewed them for a pre-entry requirement at another school.

Awesome. Also, totally irrelevant.

Trust, me, Bioware aren't like EA is supposed to be.

Like I said, not a publisher. So, it's not a valid comparison. You might have a point if you compared Activision to EA, but both companies use business practices that are corrupted at their core. So... yeah.

Nintendo, MS and Blizzard, all big names, offer all kinds of support for their workers. They don't shit on them, they don't treat them like shit,and they aren't like EA.

Nintendo treats most of their teams well, but I'm sure has their faults, and as a publisher, they act just like EA or Activision (see: the problem with Pokemon). MS is MS; they treat indy devs badly, and lock their system out just like everyone else. Blizzard also ISN'T A PUBLISHER (Activision publishes their games), so moot comparison.

In fact, I'd say that there more "nice" companies than there are shitty ones.

I'm sure there are. Are they the big ones that shape the industry, though? If not, it still doesn't help all that much. Valve is a great place to work; ALL companies need to be like Valve, and if they aren't, they should strive to be and WE, as consumers, should strive to make them be like Valve.

As for screwing the customer... how are they doing that?

By purposefully ignoring tech like DLC in favor of selling a full price retail product just because it will make them more money. Again, it's their "right"(?), but that just means we need better market regulations.

You want to make these broad claims, start backing them up with some examples. Otherwise you're just painting everything as being bad "just because".

I have. You ignore all my examples (like the Pokemon-as-DLC argument) because you don't like them, yet can't actually provide counter-points beyond "well, there's no point to changing it because we aren't powerful enough to".

[eilios]

Jack, he's not saying "you'll never change anything, so don't try", he's saying that NOBODY ELSE CARES.

[JackKieser]

So what? No one else cares? That doesn't mean that the business practice is right. That's the thing about argumentum ad popululm: it doesn't matter how many people agree on a conclusion, the conclusion can still be wrong. Example: religion.

I don't care if 1 million people buy Pkmn B&W. I don't care if 2 million people do. I don't care if 15 million do. If Nintendo is engaging in exploitative business practices (and I have argued that they are), if EA is (like they are with the Madden franchise), if publishers do (by not embracing digital distribution and by hiking prices and shorting developers), then they are wrong and should change.

([tangent]The great thing about me is that I'm not trying to convince the Damned of anything. He's just (and I'm going to be blunt here) a tool to be used, a guy to argue against. My GF asks me all the time, "why do you argue with these people? They won't change." Well, because I'm not trying to convince HIM. I'm trying to convince at least one of the people lurking or reading the tread, who potentially will change his mind and give that idea to someone HE knows, who will spread that idea to a few friends... and so on. I am more interested in gradual social change through education than changing one stubborn dude's mind over the internet.

So, post away. But, I've been arguing about this topic for far longer than I'm sure you think I have. Copyright law, pricing structures, exploitative business practices... these have been philosophical passions for at least a decade now. So, give me counter arguments. I want them. I want to see other viewpoints because it just gives me more data I can use to make better arguments.

...besides, excluding random outbursts, I don't get trolled easily (the EC thread was, I admit, a low point, and I do apologize for that post). The Damned, though, gets salty pretty easily, and it makes his arguments weaker. I don't want that. I want strong counterpoints, something I can work with.[/tangent])

[Imagist]

So what? No one else cares? That doesn't mean that the business practice is right. That's the thing about argumentum ad popululm: it doesn't matter how many people agree on a conclusion, the conclusion can still be wrong. Example: religion.

If you hadn't already discredited yourself by ignoring the completely valid arguments I presented earlier, you did just now. I'm agnostic and this statement makes you look like an imbecilic jackass to me.

I'd cry "troll," but even the sleaziest of trolls usually don't dedicate as much time to generating text walls as you have.

[Gario]

A strong counterpoint to your claim that profit = extortion, for example?

I have a one hundred dollar bill in my hand, and I offer to sell it to you for one hundred dollars. Will you buy it or not?

A car company can only break even on a vehicle because a customer demands that they don't charge any more than that. Would they make the car?

A company has a game they could produce that will only sell as much as it cost them to make the game because people demand that their prices go down to that much. Would they make the game?

Save for the first question (I don't know what choice you'd make there - it's arbitrary) the answer will always be 'no'. There are always better things that people can do with their time than absolutely nothing.

Another counterargument (if that one is too hypothetical for you):

Extortion, by definition, cannot be applied to profit because it is the abuse of one's position of power over another that the money is gained from. This is never possible with vanity products, since it's always your choice whether or not to buy them.

You're turn - I haven't had any sort of argument in weeks, and it's beginning to bug me.

[The Damned]

So, I'm salty(?), a tool, weak, being used, ignorant and in need of education by yourself because I'm wrong, I ignore the wonderful facts you espouse, and... let me check... no, that's about it. The religion comment doesn't apply to me, but it obviously does to some here.

You go on with that. I hope the replies you get are at least as courteous as the ones you give.

Protip: personal attacks do not make you look rational or informed. They weaken your position and only make your position look worse. If you really, truly wanted to give people new ideas or outlooks on this matter, you're done nothing but the opposite.

[RDX]

I think the reason why your girlfriend said that is because she doesn't particularly care and wants you to stop pursuing pointless endeavours that don't accomplish anything.

[The Phalanx]

Protip: personal attacks do not make you look rational or informed. They weaken your position and only make your position look worse. If you really, truly wanted to give people new ideas or outlooks on this matter, you're done nothing but the opposite.

THANK you.

[The Derrit]

can someone change this thread title to jackkeiser vs ocremix

[The Damned]

No, that would be intentionally mean, and not the sort of things that inspires true discussion. We must act accordingly, and be above such behavior.

Also, that would result in many lulz and we would have to start breaking out the popcorn gifs, like this one.

But that wouldn't be very nice, so let's not do that, shall we?

[Imagist]

Besides, the more appropriate title would by "jackkeiser vs. himself," because his posts here are basically the forum equivalent of Jim Carrey's courthouse bathroom scene in "Liar, Liar."

oh god when did I become this kind of poster

[Schwaltzvald]

Geez I don't even see that much bullshit spewed by the likes of Jackkeiser even on the /v/ boards and that's pathetically amazing Do keep it up Jack as it actually makes me laugh; I'm loving that self-righteous indignation you have going there.

[JackKieser]

Just got back from Video Games Live, so I'm about to crash and will put off posting a proper response until tomorrow. Until then, I'll say this:

1 ) being "salty" essentially means being bitter; it's a term I picked up from posting on Smashboards. Sorry if you didn't know what that meant.

2 ) Religion is not an off-topic... topic. Religion can be criticized, and is, BY DEFINITION, belief in something despite, or sometimes in spite of, the evidence. That's why it's a "belief" and not a "fact" or a "thought". Me criticizing religion does not make me a bad person... it makes me someone who is treating people equally; I'm not going to put those who believe on a pedestal, higher than those who don't. Religion is not immune from criticism.

3 ) Glad you're getting lulz. I've grown accustomed to having people take "discourse" and make it "personal vendetta", so it doesn't affect me anymore. Posting legitimate counterargument =/= "I hate OCRemixers". So, think what you want; I don't care what you think. I'm going to continue to post what I think to be the most accurate statements about the real world, backed up by legitimate fact and observation, as long as I feel the topic at hand has discussion value.

See you guys tomorrow.