The end of the $60 game

38 Studios and Big Huge Games folded today and layed off all of their nearly 400 employees.  The game sold 1.2 million copies in the first 90 days, out performing EA's expectations.  According to this article, the company would have needed to sell 3 million just to break even.  Maybe it was just a poor business model and maybe it is that development costs have escalated to a point where $60 isn't enough to ensure profitability.  If development costs for new IPs are so outrageous that a game has to sell 3 million to break even, it won't be long until we see a $70 or $80 price point.

Kingdoms of Amalur was, in my humble opinion, a great game (the metacritic score is 80, generally favorable).  It was great to see a studio taking a risk on a new intellectual property and this is terrible news for those who can't stand the constant churning out of sequels.  I hope it doesn't scare away devs and publishers from exploring new ideas.

Here's the article.

 

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Last updated July 4, 2018 Views 4 Applies to:

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*Whispers* I wonder if it was all the used copies people bought [View:http://forums.xbox.com/emoticons/emotion-4.gif].

[quote user="voteDC"]

*Whispers* I wonder if it was all the used copies people bought [View:http://forums.xbox.com/emoticons/emotion-4.gif].

[/quote]Whisper to myself, it sure didn't help...

As I yell at Internet Land, keep doing to yourselves. Soon all that will be left is the new Sony Console, Electronic ArtsBox 9 that play exclusively Call of Duty: Black Warfare Ultimate Hardcore Platinum Edition 2.5.1

An article is in yahoo gaming section: This is paraphrased  -  'They received a 75 million dollar taxpayer-backed loan guarantee from Rhode Island in 2010, last week they had a 1.1 million payment' 

So, I'm going with : Bad business model

and I'll add:  Your tax dollars at work

Dammit, forums ate my post. Again.

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Ok, few problems here. Expecting $3 million sales for a brand new IP to break even is insane. I can't even imagine the bloated budget this game had. Not to mention the whole Rhode Island loan thing. Lot more going on here than meets the eye.

CD Projekt reached the 1m sales for Witcher 1 a year after the game came out, and they celebrated it.

They have only gone upwards as developers after that.

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Second, no way in hell can used games be blamed here in any way. That's insane and if anything, an easy scapegoat for future devs.

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Bumping prices won't do anything either. Oh sure, bump the prices up to $80 but you can't expect that same amount of people to go and buy your game. You might make more from each copy, but the amount of people who will buy a copy has now shrunk on you.

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If anything, dynamic pricing has to be looked at more often. You might sell the game at $60 at release and for a short time after, but we all know that after a few weeks, your sales are going to start taking a dive unless you game is the latest COD. You have to start slashing the price to pull in more consumers who wouldn't have paid that much. Sure, you're selling at a lower price point but your audience has just gone up.

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There's been a few examples where Steam but one that comes to mind is when they dropped Unreal Tournament 3s price by 40%

Now this game was out for a while now and sales had slowed to a near complete halt. But when Steam did this price drop, sales went up by over 2000% and stayed that way for a good while. You're not making as much from each copy but that makes little difference when those copies would have never sold unless you dropped that price anyway.

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And yeah, devs should explore new ideas, but don't start with a multi million dollar budgeted game that could mean the end of your whole studio if it doesn't succeed.

[quote user="Static Jak"]


If anything, dynamic pricing has to be looked at more often. You might sell the game at $60 at release and for a short time after, but we all know that after a few weeks, your sales are going to start taking a dive unless you game is the latest COD. You have to start slashing the price to pull in more consumers who wouldn't have paid that much. Sure, you're selling at a lower price point but your audience has just gone up.

[/quote]What stops those people buying it for the same price, earlier, second-hand? Perhaps the rise of single player content being locked out with an "online pass". 

The second-hand prices will drop quicker than new after all.

Sucks all those people lost their jobs.

[quote user="voteDC"]

[quote user="Static Jak"]


If anything, dynamic pricing has to be looked at more often. You might sell the game at $60 at release and for a short time after, but we all know that after a few weeks, your sales are going to start taking a dive unless you game is the latest COD. You have to start slashing the price to pull in more consumers who wouldn't have paid that much. Sure, you're selling at a lower price point but your audience has just gone up.

[/quote]What stops those people buying it for the same price, earlier, second-hand? Perhaps the rise of single player content being locked out with an "online pass". 

The second-hand prices will drop quicker than new after all.

[/quote]Same thing that stops them from waiting for the GOTY Editions with all the DLC or waiting for Steam sales of games that just came out. People who want the game will buy it as soon as they can nearly every time.

[quote user="Static Jak"]

[quote user="voteDC"]

[quote user="Static Jak"]


If anything, dynamic pricing has to be looked at more often. You might sell the game at $60 at release and for a short time after, but we all know that after a few weeks, your sales are going to start taking a dive unless you game is the latest COD. You have to start slashing the price to pull in more consumers who wouldn't have paid that much. Sure, you're selling at a lower price point but your audience has just gone up.

[/quote]What stops those people buying it for the same price, earlier, second-hand? Perhaps the rise of single player content being locked out with an "online pass". 

The second-hand prices will drop quicker than new after all.

[/quote]Same thing that stops them from waiting for the GOTY Editions with all the DLC or waiting for Steam sales of games that just came out. People who want the game will buy it as soon as they can nearly every time.

[/quote]So in short they will buy the second hand one as that will be in their price range before a new copy.

[quote user="Static Jak"]

[quote user="voteDC"]

[quote user="Static Jak"]


If anything, dynamic pricing has to be looked at more often. You might sell the game at $60 at release and for a short time after, but we all know that after a few weeks, your sales are going to start taking a dive unless you game is the latest COD. You have to start slashing the price to pull in more consumers who wouldn't have paid that much. Sure, you're selling at a lower price point but your audience has just gone up.

[/quote]What stops those people buying it for the same price, earlier, second-hand? Perhaps the rise of single player content being locked out with an "online pass". 

The second-hand prices will drop quicker than new after all.

[/quote]Same thing that stops them from waiting for the GOTY Editions with all the DLC or waiting for Steam sales of games that just came out. People who want the game will buy it as soon as they can nearly every time.

[/quote]Just to expand on that since it won't let me edit.

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Even then, that's based on the idea that the pricing for all games would be consistent and predictable. That's not what "dynamic" pricing is. COD can sell for a much, much longer time at a full $60 compared to something like Amular. The pricing will be dictated by the sales. When they start to see sales drop to an unhealthy level, it's time to look at a price drop that can keep those sales at a reasonable rate.

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Second hand isn't near as dangerous as some Publishers want to believe. They see a second hand game on a shelf and they think of it as a lost sale but what they don't see is the credit the customer got that has probably been put towards booking or buying a new game. But that's a whole other kettle of fish and deserving of its own topic.

[quote user="voteDC"]So in short they will buy the second hand one as that will be in their price range before a new copy.

[/quote]Based on the idea that enough copies of the game have been sold back to present a real danger to overall sales. To do that we're on about a huge amount of copies resold across the country or world at a fairly quick rate.

[quote user="Static Jak"]Second hand isn't near as dangerous as some Publishers want to believe.[/quote]No they are not as "dangerous" as some make it out to be but it's also not part of a solution. Overall, it's part of the problem.

I'm not saying it needs to be one way exclusive or another but moderation. If people, Gamers would just be a little more moderate in their spending habits we wouldn't be stuck with every Game turning into a CoD clone.

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