SteamSaleScreenshot20121127

Rethinking Digital Triple A Pricing

Triple A pricing is facing a problem of credibility. First, Free-To-Play (F2P) titles’ visual quality is more often on par with that of high-budget paid titles.

However, although AAA retail games need to be priced between 50 and 70 dollars to turn decent profits, their F2P (digital-only) counterparts manage to make a lot of cash while being free to download.
This is because when a game is freemium, it gives its users chances to pay money as they play, to their convenience. Of course, not everybody likes the freemium model, from developers to gamers, often with good reasons that might be the object of another article.

But the real issue is that in an industry where the share of digital downloads is ever increasing, triple A titles sell online for the same price as their boxed version, with no clear advantage for customers.

Some developers have reported that going digital made it possible to turn a profit similar at $10 as a they would from a boxed $60 game. This is well explained by Stewart Gilray from Just Add Water in a great article on Games Industry International:

When we released box product we would get 20 per cent of the revenue. After that 20 per cent paid back the entire development budget, if it was still selling at $60 we would start seeing $7 a unit. Because of the bricks and mortar, the plastic, the manufacturing, the gas involved in taking games to the store, the store itself and all those extra costs [...]

Then he adds:

Now we’re on a digitally distributed landscape, instead of a $60 price point we can offer a $9.99 price point. At $9.99 we get $7 per unit.

To sum up, a $9.99 downloadable game earns its developer the same amount of cash as a $60 retail game.

This means triple A games you download on platforms such as Steam or Origins for close to sixty dollars are making their publishers way bigger profits than when you buy them in a store.
It’s quite amazing (and somewhat shameful) that players get to pay the same for games that cost so different amounts to bring to market — with the digital versions preventing any resale.

Put in this perspective, the often criticized aggressive sales on Steam –say, for example $29 instead of $59– still earn their publishers greater amounts of cash than what they make on the full-priced retail versions.

So basically, the next time you see a game on sale on a digital download store, keep in mind you are not the only one who benefits from it.

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Screenshot of Valve’s Steam online store. Don’t worry, they still make money!

And no matter how certain people might want you to think that Steam sales “cheapen intellectual property”, be aware that these sales actually do contribute to your favorite developers’ well-being.

Some established publishers don’t want you to know that, of course, as they are eager to make all the money they can while trying to convince you that it’s normal to pay $60 for your digital version of Call of Duty or Battlefield –which you will never be able to resell.

I guess it’s up to gamers to spread the word, hold publishers accountable for their practices and ask either for either significantly lower prices on digital downloads or something in exchange.

And if this is the industry’s new way of making up for the overall decrease in video games hardware and software prices, then they should be clear about it.

 

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