I think games can be cheaper and make more profit. Yes, I’m crazy, but hear me out…
Games Industry, you have a problem.
I’ve detailed it enough of late, but the gist of it is – you’re not selling enough. Not enough consoles. Not enough games. Not enough season passes and DLC skin packs to justify the expense you already splashed out. Be this Battleborn, Titanfall 2, Watch_Dogs 2 or a host of other games released this year, turns out quite a lot of them simply aren’t shifting the kind of units you need to justify the initial outlay.
The solution, logically speaking, is simple; slash prices.
Indeed, this is what is already happening in most cases; Watch_Dogs 2 has already had an RRP cut across most retailers. Battleborn is so close to Free-To-Play now it’s hard to recall a time it was a full-priced offering. Titanfall 2, regardless of its predecessors success, has frankly fallen on its face and also seen its cost slashed. The same has happened to Rise of the Tomb Raider, Street Fighter 5 and many other games. These are franchises one would assume could and would fly off the shelves, but to shift more units, they’re having to slash the price to expedite consumer interest. It makes sense, after all – we all like a bargain.
The thing is, I don’t know about most people, but when a game which isn’t more than a month or four old is getting aggressive price cuts, I am suspicious of it. Because that’s a red flag to me – it suggests that this was considered a Top-Tier “Triple-A” Game at some point and… well… the game was clearly flawed in some way that drove consumer interest out of the pool to the point that it ended up face-down in the middle of it. When a retailer is aggressively cutting the cost of a game, it tells me they badly need to shift that stock. Dead stock is bad stock. It hangs around because no-one really wants it. It tells me – in a sense – that they badly need to get rid of these games, and they cannot do it any other way than to cut prices to grab the unwary and unknowing. It’s not always true, of course – but it’s just how it feels, because in a large number of instances, this is the reality. Tropes exist for a reason; they’re true more often than they’re not, hence why they get used to much.
My suggestion here is simple; why not, you know… just start out at a lower price point?
Many places have been lamenting the state of the Top-Tier “Triple-A” Games Market. Personally, I’m always of the opinion that no game is as safe as “Triple-A” intends to suggest, but it’s true enough that a lot of big-name releases haven’t really been of stellar quality in recent years. Even if the game is good, the big-name success story has become alarmingly rare in the industry to the point that it could be suggested that it is an endangered species; the likes of Overwatch come along fleetingly and sparingly (and let’s not forget to balance out Overwatch, Blizzard had Diablo 3 and World of Warcraft: Warlords of Draenor…). It’s just not as common as the industry wants to believe it is, and chasing the exception rather than the rule can cause a host of problems – if you’re convinced you’re going to get 2-3 million sales and only end up with half of that… well, that’s a lot of lost money.
On the other hand, you have Nintendo – always an interesting company, for better and for worse. In this category, we’ve got the likes of Splatoon and Hyrule Warriors – both interesting diversions from the Nintendo norm, and both launching at a £30 price point. In Splatoon’s case, it saw four million unit sales in its first year – not at all shabby, and it has become one of the companies biggest new properties. Nintendo dropped the game at an affordable price, and almost a third of the Wii U’s install base bought into it.
Some can and will argue Splatoon was more a middle-market game, however it’s a game with as much polish and interesting stuff as any Top-Tier game. So the distinction is quite difficult to make; who is to say Splatoon isn’t a Top-Tier game? It was certainly one of 2015’s highlights, surpassing a huge number of games £20 more expensive than itself. And it continues to have a large audience playing online, long past the point that many more expensive games would be haemorrhaging user numbers. If the cost is the only thing that denotes it as middle-market, then why is the middle-market treated by the industry with such absolute disdain?
It’s asking myself why a game at £40 seems like a safer gamble than one at £50. Perhaps this is just a by-product of a generation where so many games at the £50 price tag haven’t been that good, and the resulting hangover from buying games like The Order: 1886 and Thief is starting to chafe somewhat, making me more wary and less inclined to buy into them on launch. Indeed, with the industries habitual reliance on bundling games months down the line with the DLC and Season Pass stuff in it for a lesser sum (under the guise of “Game of the Year” or “Complete Edition”), it might be fair to argue that buying early on for video games is a fools game – why pay the extra when in a relatively short space of time, that game and all the additional content will be released again in a cheaper, more complete (and often far less broken and buggy) state?
Whilst I do understand that companies need to make their money back – games development is a business, after all – it’s time the industry as a whole began asking itself how it drives growth. Right now, it’s trying to make peanuts back on software in the hope that people will then buy into the additional content. The thing is, more and more games aren’t shifting nearly enough units out of the gate – which means you have less people to buy into the additional content. It’s one thing to rely on DLC and Season Passes to make up the fiscal shortfall, but you still need to get those people through the doors before you raid their wallets. Today, we’re finding more reasons to wait – we’re finding more excuses to hold off, to finish what we have and arguably to start whatever free stuff is being offered that month.
And it’s telling that games getting their costs slashed for poor initial sales figures are often those with additional costs – so, it can be okay to slash the asking price AFTER realising no-one wants to buy a £50 with £50+ of additional purchases, but it’s weird to consider a lower price and make more back from the additional content?
Let’s run through a scenario.
Game A retails for £49.99. The Season Pass costs £24.99. And let’s throw in an additional content pack at £24.99 – total cost for one game; £99.97.
Game B retails for £29.99. Additional content packs cost £9.99 – and there are, say, seven of them. Total cost for all of this – £99.92
The games make, more or less, the same kind of money in the long-term. However, Game B is cheaper to buy. And the additional content packs look more affordable – even if overall the actual expenditure isn’t much different from the usual top-tier game.
And it’s this that I’m getting at for the games industry – frontloading your profit margins doesn’t look great, even though there’s little to no difference to a cheaper game with more content for sale. Hyrule Warriors showcased this perfectly; it had substantial content updates moderately priced. It also interacted with Amiibo, another cost. Overall, Hyrule Warriors probably costs more than most games on the market. But it’s not front-loaded, and people can buy in, enjoy what is there (and there’s plenty of base content there) and download additional characters and maps at a more gradual pace. They still spend the money – heck knows I did – it’s just trusting us to eventually wind up wanting it all. Nintendo also did this with Mario Kart 8; two DLC packs were offered at £7 each, or you could by both at £11. Again, moderately priced content – but staggered, interesting and angled at being a compulsive purchase, rather than leaving people torn about whether or not they wanted to buy this stuff.
I suspect we’re going to see a lot more of this with the Nintendo Switch, mostly because I think Nintendo has realised that this is better business practice. It has already demonstrated a knack for monetising its limited Wii U audience without pissing them off – with the hardware also being modestly priced, Nintendo is making a calculated gamble that it could expand this to bigger profit margins if it has more console owners. And it would be a sound plan.
My question is – could the games industry do this on a larger scale?
As much as I hate to say it – season passes and DLC Packs aren’t going to go away. And as such, it’s time to ask if we’ve all got this whole pricing model wrong. If we’ve had years of games at £50 that haven’t been much cop – which we have, sadly – then why not, say, drop that to £40? From there, offer more reasonable DLC content. Think about it. Look at what you can offer, and then price accordingly. If the aim is still to get consumers to spend £100 a game, then ask yourself if you can get there from a lesser pricing point; learn lessons from the Smartphone world, and what’s happening on the likes of Steam.
More interestingly, maybe the industry can ask if it can make more this way; if you have a million buying a £25 season pass, making say, £10 profit a pass – £10 million. If you have two million, buying a £15 season pass that makes £7.50 profit – £15 million. The difference between the one million buyers and two million buyers may simply be about encouraging more people in, and one of the easiest ways of doing this – quelle surprise – is to lower the cost of entry. You charge less per unit, with the intention of making more money overall by sheer volume of sales.
Of course, there are other considerations at play here (and hidden costs to factor in) – but the point is simple. If the point is simply to get more of us to buy digital content because new game releases aren’t having huge success, then you want more people available to buy that digital content. And right now, for so many games, the audience just isn’t big enough to make that kind of thing as viable as it could be. And of course, there’ll always be failures. That’s business for you. It’s a cruel world, and success is not a guarantee.
It’s getting more people in, and then asking them to buy into your extra content. If you front-load everything; here’s a £50 game, here’s a £30 season pass, here’s a £20 day-one DLC pack… people are starting to wake up and realise, wait, that’s actually £100 total I’m going to have to find to play this brand new game I want! Whereas a £30 game, with just additional content packs at £10 a pop or so, just looks more reasonable. The first scenario is, “I can’t afford that!” – whereas the second scenario is more, “That looks affordable… I can get an extra pack every week/two weeks/month…”
The end goal is the same. It’s just a matter of the Tortoise and the Hare. Right now, the games industry wants everything up-front; it wants money in the bank. But it might be more prudent in the long-term to slow down, space things down a bit and lower the initial financial burden. More for less. Still ending up at the same place; just without the bad press, angry customers and signs of exasperation from writers across the Internet.
It’s worth thinking about, is all I’m saying…