Economics of Game Prices

[Imagist]

Why am I still up?

I'm not taking issue with you addressing religion as a topic. I'm taking issue with your implication that religion is somehow inherently right or wrong. And that implication, with no context or provocation, makes you out to be an asshole.

[The Phalanx]

Religion is not immune from criticism.

It also has nothing to do with the topic of game economics. Way to miss the point!

Posting legitimate counterargument =/= "I hate OCRemixers".

Insulting people =/= counter-argument.

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.

"I'm going to ignore everyone destroying my argument piecemeal and continue to rant on my soapbox and deluding myself into thinking I'm right!"

You can't have a proper discussion and debate on this if you keep yelling on like you do. Maybe it works in whatever circle you normally hang out in, but in REAL LIFE you are so horribly wrong it's hilarious. People have pointed this out, numerous times already, and yet you still don't get it. They're laughing at you because you're too dense and self-deluded to possibly see otherwise.

This topic has devolved so bad so quickly it may as well be locked at this point.

[Charlie's Angel]

I feel bad for laughing through this topic as i have. This man clearly has some very real problems and deficiencies and i find them hilarious.

[The Derrit]

strugglefest

[Brushfire]

Just buy the game already. Your crippling addiction to the game of videos demands it.

[Malaki-LEGEND.sys]

DLC's a sham, guys. We've been over this.

[The Author]

Just buy the game already. Your crippling addiction to the game of videos demands it.

No, you see, how it works out is this:

If I want money, I get a job and WORK for my money.

Then if I want to play videogames, I use the money I WORKED to get to purchase it.

So the developers and distributors get the money I WORKED FOR.

They don't work for the money, I do. What is this, some communist country?

If the developers want money, they should do exactly like I do and WORK for the money and not hope I pay for a game that is easily available online for free...

[The Author]

No, you see, how it works out is this:

If I want money, I get a job and WORK for my money.

Then if I want to play videogames, I use the money I WORKED to get to purchase it.

So the developers and distributors get the money I WORKED FOR.

They don't work for the money, I do. What is this, some communist country?

If the developers want money, they should do exactly like I do and WORK for the money and not hope I pay for a game that is easily available online for free...

By the way, this is how all pro-piracy people sound like in my mind.

[Brushfire]

(really Long Winded Explanation about being a thief)

Wow d00d, I wasn't even talking to anybody in general, but hey.

[big giant circles]

Is anyone out there in the mood to write up a TL:DR summary/gist of this entire thread? I've only had the energy to read bits and pieces. And that's not really got me anywhere b/c the debate seems to keep micro-morphing into other tangents. And I just don't have the desire to properly catch myself up and/or participate in it otherwise.

[Gario]

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.

Let's see... no, no that's not the definition. This is the definition.

Originally posted by The Freakin' Dictionary

A specific fundamental set of beliefs and practices generally agreed upon by a number of persons or sects: the Christian religion; the Buddhist religion.

Nowhere does it say they believe in something in spite of something else, by definition. Thus, another example of you providing incorrect information.

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".

lulz. No, you posted a legitimate argument (albeit an incorrect one) and followed up with personal attacks against OCR members when corrected. Generally, personal attacks against members is equal to 'I hate OCRemixers'.

[The Damned]

For Circles, because he asked for it:

Jack: Game companies are evil and mean because they offer their products at really high prices. They should drop the prices because lower price = more sales, and that totally realistic from what I learned at some school I haven't mentioned, but trust me, that's how it works.

Us: No, that is not how economics work.

Jack: WARRRRGHABBBGGGARRRLLLLEE Catholic church said capitalism is a sin, and those guys rape boys so it must be bad!

Us: That... that isn't even a reasonable argument. Why would you even say that?

Jack: Anyone that pays for Madden is stupid and paying for the same game over and over makes you stupid. It could have been done entirely as DLC! Frat-boy stupidheads!

Us: That argument could be used for any game, but it's not that simple a matter. Regardless, it's makes more sense for them to sell content as a new game, since they know it will generate more profit for them. You talk about knowing how businesses work, but you want them to hamstring themselves.

Jack: STUPID FRAT BOYS! YOU'RE ALL STUPID FRAT-BOYS! FOOLS AND IDIOTS, YOU, and you and you are. And you in the back. Personal insults towards members of the site.

Us: Jesus christ, young man, calm the fuck down.

Jack: Most games could have been done as DLC for existing games, like pokemon, I made a game in my first year computer course of some kind that would have been exactly like it, except it had no characters, plot, battle system, weapons inventory or anything like a game,but since it was sooooo modular,it would have taken anything we gave it. Damned will back me up, because I'm sure I've convinced him that I am right and he likes something I'm using as an example!

Me: The fuck I will.

Us (specifically those with actual programming experience): No. That's not how it works. You can't just throw stuff in. Also, why would anyone not sale a new game and make more money when they have that much more to offer? You would make games more stagnant by having no new games and just sticking more data onto older games.

Jack: YOU DON'T KNOW HOW GAMES AND MONIES WORK, OK? Shut up, you tools and then something about how religion is wrong.

Us: ok, you know what? Just shut up now.

Darkesword: Oh god, this is fucking stupid, time to move it to its own thread and let it burn itself out. STOP RUINING SEPHFIRE'S THREAD.

Jack: WARRRGGLELBBBALALLE! I'm just trying to convince one person out there of my views, and even if I have everyone else prove me wrong over and over, if I can get just one person to BELIEVE IT, it's all worth it!

Us: The only thing you've done is make your entire position look worse.

Jack: I'm too busy to reply right now, I'm not butthurt at all. Got to attend something or other... Be back later!

Us:

[Gario]

Well dammit, that would've been real awesome yesterday when I read through the whole thread to see what was going on. Would've saved me about half an hour, that's for sure.

[The Damned]

Sorry Gario... no one asked for it until now. I would ask Jack to use his wisdom to accurately predict when someone would ask for a condensed version, but he's busy fighting the good fight that is... is... that thing he's against. Or for. I can't tell anymore.

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...

Don't you have to begin doing something before you can continue doing it later?

[Kenogu Labz]

We could take care of this whole thing by renaming the topic "Trolling OCR" and closing it. I get the feeling this has dissolved into meta-debate.

[Arcana]

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.

This thread is huge and messy and has tons of terrible facts, and maybe someone pointed this out already, but I'd just like to point out that in digital distribution, Apple (iTunes) basically plays the role of the publisher. They take 30% of the profits if you release an application on the Apple Mac Store, just like EA would take whatever cut of publishing the game for you, and like how Gamestop takes 20% of the retail sale.

Blizzard runs its own online game store, and they love it, because they get to keep their 20% cut.

I will also take a moment here to describe a number of factors that you have not taken into account, either.

First, many development studios don't have a lot of money because they're making their first few games. If they want to release a AAA title, then they need to bring in money, and this is where the publisher comes in. They say, "We'll give you $3 million dollars, which is currently $2.8 million more than you have, to make this game, as long as we get a 20% cut of your revenues."

The publisher, in addition to providing the studio a way to sell, market, and promote the game (without the studio having to hire that talent themselves), also has the supply connections to efficiently distribute the game to every Best Buy, Gamestop, Wal-Mart, and Target in the United States and Canada. They also have the expertise to sell that same game in Europe and Latin America. This is the publisher's end of the deal. This makes it such that the studio doesn't have to deal with things like localization, sales, and all of that stuff that they don't like to do. They can just concentrate on building the game.

Second, it takes a lot of money to build an online store, and the existing ones take your money in big ways. I mentioned iTunes already. 30% goes to Apple from the App store. Sure, you could try to build your own, it'll cost a few hundred dollars just for the signed certificate to ensure that transactions are secure, not to mention potential liability if credit cards are leaked, or what-not. You also don't have the business analysis tools to examine the records in a knowledgable fashion. Why not just get that all from the publisher? They're going to provide that to you if you sign away whatever percent of your revenues.

Publishers have traditionally served a purpose and they are virtually necessary for large-scale distribution. While you might not believe it, brick-and-mortar distribution is still a large part of game sales.

[JackKieser]

Ok, the tangential stuff first:

1 ) Never said anyone was "evil". Just that publishers extort... which is a prime tenant of capitalism, so it's not surprising.

2 ) The religion comment was an anecdote to compare how fanatically the people in this thread cling to capitalism and its economic principles, even in the face of counterargument: you guys protect selling an mp3 for 100$ or a publisher screwing over a dev team the same way religious devotees get pissed at Ricky Gervais for making a comment about God. And the comparison to Catholics was an anecdotal argument to how bad capitalism (and thus, the current business practices in game publishing) must be if a group of people that defends something that is provably wrong (raping kids) says that capitalism is bad... capitalism must be REALLY bad. Like I said, it was an anecdotal inductive argument; if you'd like, I can restructure it in a way that will make it easier for those without formal logic training to read.

Also, the definition that you gave for "religion" is "accurate", but meaningless, since that definition can include, literally, anything; that makes it a bad definition. Mine is not only the one taught in Major World Religion classes (ones I've also taken), but it is more useful because it describes how religions operate, instead of what they are (everything, ultimately).

3 ) I haven't ignored any "argument" passed to me once so far; meanwhile, I can't count the number of times I've heard "(economic principle A) is true because economists say it is / that's how economics works"; I've given concrete examples as to why digital media breaks supply / demand models, and no one has given me a legitimate counterpoint yet. So, who is "ignoring" whom?

4 ) If you'd like me to prove I was at Video Games Live, I can show you a pic of my Tallarico/O'Donnell/Salvatore-signed DSi, for the "pics or it didn't happen" crowd.

Now, onto the substance.

This thread is huge and messy and has tons of terrible facts, and maybe someone pointed this out already, but I'd just like to point out that in digital distribution, Apple (iTunes) basically plays the role of the publisher. They take 30% of the profits if you release an application on the Apple Mac Store, just like EA would take whatever cut of publishing the game for you, and like how Gamestop takes 20% of the retail sale.

Yet, songs are still .99$, and THAT'S what's important. You know why? Because even though Apple takes a cut (still) of song sales, the fact that they don't have to print a physical disc reduces cost DRAMATICALLY, which is all I'm arguing. Furthermore, artists like Girl Talk make an obscene amount of money, even without iTunes. Digital distribution IS the future of digital content distribution; anyone who thinks otherwise is delusional / stuck in the past.

Blizzard runs its own online game store, and they love it, because they get to keep their 20% cut.

First of all, Blizzard is a dev studio, not a publisher; if they're running their own digital content store, they should be getting MORE than a 20% cut for THEIR OWN WORK. If Activision is really taking an 80% cut from BLIZZARD'S store, there's a problem.

I will also take a moment here to describe a number of factors that you have not taken into account, either.

First, many development studios don't have a lot of money because they're making their first few games. If they want to release a AAA title, then they need to bring in money, and this is where the publisher comes in. They say, "We'll give you $3 million dollars, which is currently $2.8 million more than you have, to make this game, as long as we get a 20% cut of your revenues."

The publisher, in addition to providing the studio a way to sell, market, and promote the game (without the studio having to hire that talent themselves), also has the supply connections to efficiently distribute the game to every Best Buy, Gamestop, Wal-Mart, and Target in the United States and Canada. They also have the expertise to sell that same game in Europe and Latin America. This is the publisher's end of the deal. This makes it such that the studio doesn't have to deal with things like localization, sales, and all of that stuff that they don't like to do. They can just concentrate on building the game.

That is all technically correct, but, again, without the dev team, there is no game to sell at all. Meanwhile, without the publisher, the dev team COULD still produce a quality, well designed title, complete with high-end production values and a WELL-DESIGNED system of gameplay, AND they'd be able to sell it... it'd just take longer, probably wouldn't have high-end, PS3-straining graphics, and wouldn't sell as well.

...but it could still be done.

That means, by default, that the dev team is a necessary resource, while the publisher is simply a resource of convenience (a TON of convenience, but convenience none the less). As such, it logically follows that, the NECESSARY resource gets a higher cut than the resource of CONVENIENCE; if the game sells well, the publisher will make back investment AFTER the dev team gets paid their cut.

How does that NOT make sense?

Second, it takes a lot of money to build an online store, and the existing ones take your money in big ways. I mentioned iTunes already. 30% goes to Apple from the App store. Sure, you could try to build your own, it'll cost a few hundred dollars just for the signed certificate to ensure that transactions are secure, not to mention potential liability if credit cards are leaked, or what-not. You also don't have the business analysis tools to examine the records in a knowledgable fashion. Why not just get that all from the publisher? They're going to provide that to you if you sign away whatever percent of your revenues.

Again, tell that to the guys who made the Humble Indie Bundle. Over a million dollars in sales. In less than a month. They didn't have Steam. What you're missing is that, while you are TECHNICALLY accurate, again, what you're saying isn't NECESSARY to do to make sales in the 21st century, by evidence of other people doing just that. I wonder what the publisher's cut of Minecraft is, for instance?

Publishers have traditionally served a purpose and they are virtually necessary for large-scale distribution.

They WERE virtually necessary. Not anymore. They are still so, but that's because, like Sephfire said earlier, the infrastructure still needs to grow over time. We will continue to have publishers for the next few years, but if the industry grows PROPERLY, in 5-10 years, we won't have publishers anymore. Investors will invest DIRECTLY in dev studios (like Bioware), and dev teams will sell their own product online at no additional cost, AND take their cut first. The ONLY people who don't benefit from this are the publishers, who lose their job.

But, that's ok! We won't need them anymore, so why have them? Ok, we'll have a few big ones for the few remaining brick-and-mortar stores, catering to those unfortunate few who live in rural Kansas and don't have a constant broadband connection, but for the rest of us living in the future? We won't need publishers, so the cost of our games will go down. I'm surprised at how many people seemingly argue against the lowering of prices...

While you might not believe it, brick-and-mortar distribution is still a large part of game sales.

For now. What I'm arguing is that this is a concept that is changing, and furthermore, as consumers, it is in our best interest to facilitate that change through our purchasing decisions. We only get benefits from this.

[sephfire]

For Circles, because he asked for it:

[Thread summary.]

Or, a slightly more succinct alternative:

[Kenogu Labz]

Let's ask zircon. His recently released game, 'Return All Robots!', has received very little attention. Even as an indie developer, Space Whale Studios didn't receive any attention from known indie sites. Even releasing the game through XBox Live didn't have the desired results, if I'm not mistaken.

The question I have is this: if they had been able to release through a publisher, would that have improved their chances for exposure to a much wider audience? Would the people making the game receive a greater profit from going through a publisher than they would releasing it by themselves?

Occasionally, games have enough of their own merit to garner attention from standard media outlets. However, many times, even the best new developers end up buried under a massive pile of other mediocre games. Why? Lack of proper marketing can be a huge contributor, as was the case with the well-rated, yet relatively unknown Spirit Engine 2, which made far less money than the writer had hoped for and deserved. Publishers aren't just responsible for printing and shipping games; they have to work with presentation of the game (packaging and related materials), marketing (advertisements on a wide variety of platforms), networking (contacting media sources to plug the game and offer info), and funding (providing resources that the development team wouldn't otherwise have). In return, they receive payment.

In the capitalist world, this is called a service, and it makes sense. The publisher is making an investment in the developer's game, and hopes to gain returns from it. Similarly, the developers hope that the publisher will provide the end benefits of greater sales than they could accomplish alone. It's a symbiotic relationship, not a destructive one.

Now, I will give you that the publishers likely try to take advantage of their vital position by overcharging, or collecting more than their due from the sales. But the idea is a sound one, when used honorably. It's also the case that many developers can release without a publisher; however, this often relies on reputation, which often can not be built without having released previous material. While capitalism ruled by selfishness leads to horrifying and truly evil results and decisions, capitalism with a mindset focused on integrity and mutual profit works incredibly well, and leads to the increased happiness of all involved.

[JackKieser]

Let's ask zircon. His recently released game, 'Return All Robots!', has received very little attention. Even as an indie developer, Space Whale Studios didn't receive any attention from known indie sites. Even releasing the game through XBox Live didn't have the desired results, if I'm not mistaken.

The question I have is this: if they had been able to release through a publisher, would that have improved their chances for exposure to a much wider audience? Would the people making the game receive a greater profit from going through a publisher than they would releasing it by themselves?

Those are two separate questions. To the first question: sure, they would have reached a greater audience, or rather, the marketing would have. There are no guarantees that it would have sold better.

To the second: Zircon's people might have gotten a greater profit. Or, they might have gotten the SAME profit, and the PUBLISHER would have gotten a greater profit. Because, what you're not realizing is that, as part of the contract publisher's MAKE dev teams sign before getting capital, the dev team agrees to a pre-set amount of payment BEFORE the game ships. And, many times, they get paid on a milestone schedule, which means that greater sales can NEVER equal greater profit for the dev team. Which, I guarantee you, would have happened to Zircon's guys.

Occasionally, games have enough of their own merit to garner attention from standard media outlets. However, many times, even the best new developers end up buried under a massive pile of other mediocre games. Why? Lack of proper marketing can be a huge contributor, as was the case with the well-rated, yet relatively unknown Spirit Engine 2, which made far less money than the writer had hoped for and deserved.

Let me ask you a question: is it possible that you have this backwards? Could it be that good games get overlooked not because they don't have ENOUGH marketing, but because poorly made games backed by publishers get TOO MUCH marketing? It's akin to the hyperbolic rhetoric in politics: everyone is made out to be evil, so when REAL evil happens, it gets overlooked. Well, EVERYTHING is hyped as the best game ever, so when a TRULY GOOD game comes out, it gets overlooked.

Maybe... maybe we just need LESS game marketing in general.

Publishers aren't just responsible for printing and shipping games; they have to work with presentation of the game (packaging and related materials), marketing (advertisements on a wide variety of platforms), networking (contacting media sources to plug the game and offer info), and funding (providing resources that the development team wouldn't otherwise have). In return, they receive payment.

In the capitalist world, this is called a service, and it makes sense. The publisher is making an investment in the developer's game, and hopes to gain returns from it.

HOPES to. Not is guaranteed to. Which is how it is now. Publishers get first cut of sales, remember? They make back their investment first, not the dev team. There's nothing wrong with getting paid for a service, but there IS something wrong with a system designed to take advantage of the perceived "necessity" of having a publisher.

Similarly, the developers hope that the publisher will provide the end benefits of greater sales than they could accomplish alone. It's a symbiotic relationship, not a destructive one.

Tell that to the closing game studios. Publishers rarely fail, even when making bad decision after bad decision. ONE bad game can close a dev studio.

Now, I will give you that the publishers likely try to take advantage of their vital position by overcharging, or collecting more than their due from the sales. But the idea is a sound one, when used honorably. It's also the case that many developers can release without a publisher; however, this often relies on reputation, which often can not be built without having released previous material.

Well, sales SHOULD come with reputation, but it shouldn't be impossible to make sales from your first game, IF THAT GAME IS AWESOME. You said in the beginning of your post that Zircon's game didn't sell well. Well, Braid DID. Minecraft DID. This is going to piss people off (especially those who like Zircon's game), but is it just possible that his game isn't good? Or that it's good, but not GREAT? I haven't played it, but if I did, would I consider it revolutionary? Game changing (if you'll pardon the pun)? Is Return All Robots so new, fresh, inventive, and well-designed that there is no other game like it? Because there ISN'T another game like Braid, and there ISN'T another game like Minecraft.

Maybe... Zircon's game didn't sell well because it's just not that amazing. It would have sold better if a publisher was TELLING us that it was a good game, though. I think that might be an argument AGAINST publishers, not FOR them.

[RDX]

as a very impressionable theist i always thought atheists were supposed to be extremely intelligent and logically sound, hence why they always put themselves far above the silly god-worshipping crowd

what happened jack

[Dhsu]

Well then there's the atheists who are just atheists to STICK IT TO THE MAN, parroting humanist rhetoric just as blindly as any fundamentalist.

[Nekofrog]

That there are still pirates on the PC when Steam is available and makes most games dirt cheap at one point or another proves any argument that "PIRACY EXISTS BECOZ HIGH PRICEZ" to be total bullshit.

Piracy exists because people are self entitled assholes who, when presented with the option of "free" versus "WHAT YOU WANT TO ACTUALLY MAKE MONEY OFF OF YOUR PRODUCT AND EXPECT ME TO PAY FOR MY ENJOYMENT THAT I DERIVE FROM YOUR HARD WORK ARE YOU CRAZY", they go with the obvious choice.

Pirates = dicks.

But I pirate in a lot of cases so who am I to talk.

[JackKieser]

as a very impressionable theist i always thought atheists were supposed to be extremely intelligent and logically sound, hence why they always put themselves far above the silly god-worshipping crowd

what happened jack

Well then there's the atheists who are just atheists to STICK IT TO THE MAN, parroting humanist rhetoric just as blindly as any fundamentalist.

I'm an atheist, simply, because atheism is the default position in the universe. You don't DISPROVE something, you PROVE it, and theists of any kind haven't presented sufficient empirical evidence to prove the existence of a god of any kind. Just wanted to point that out, since apparently all it takes is someone saying, "You're not logically sound" for it to be true on the internet, as opposed to illustrating WHY with valid deductions.

Tangential, I know, but I wanted to clarify that.

@Neko: Piracy doesn't exist because of high prices, and if you'd have READ my posts in their entirity, you'd know that. Why? Because piracy exists due to the nature of digital media. It is only EXACERBATED by high prices. High prices take the problem of piracy and AMPLIFY it by giving otherwise decent people a reason to want to pirate. Otherwise average people don't want to steal; they know its wrong and goes against their moral compass... but its hard to care when you see publishers posting record profits.

If game prices weren't so high, the problem wouldn't be as bad. It'd still exist, but you'd be hard pressed to prove that high prices don't affect piracy rates. After all, how many people claim to pirate movies because theater tickets are 12-15$ a show?

[The Damned]

Or, a slightly more succinct alternative:

Nah, more like this.

But with slapping.