As you’ll have heard, there’s a game called Call Of Duty: Modern Warfare 2 coming out this Christmas. A game that’s expected to be so huge that other publishers are hiding their games in cupboards until it goes away. Even publisher Activision doesn’t want to launch its own games against it. But there’s one country where consumers might be a little surprised when it comes out in November. That’s the UK, where it’s been given an RRP for £40 on PC, and a whopping £55 on 360 and PS3.
It’s the fault of the weak pound, apparently. And it doesn’t look likely to stop at Activision. According to an MCV report, “retailers have been warned that other publishers are likely to follow suit.” They go on to quote THQ’s Ian Curran who explained that a combination of factors is leading to a hike in prices.
“Exchange rates between the Euro and the pound are making it very difficult for publishers to show an acceptable operating margin in the UK. You can’t continue to trade as normal when the biggest territory in Europe has seen cost of goods increase by 30 per cent due to the strengthening of the Euro… Also, development costs for next gen software has increased at a time when the take-up on these machines is slower than expected and therefore the opportunity to sell more units is limited. The increase in cost of goods due to the weak pound has added to this burden, and therefore something has to happen to ensure publishers’ return on their investment.”
(Read the full article on MCV to get the rest of the quotes.)
The consequences of this, especially if the increases spread across all games (and think about it – if one publisher is going to raise prices by a tenner, every publisher is going to try the same), will be very interesting. It would seem reasonable to expect that the proportion of people to spend £55 on a game (or £40 on the PC version, of course) is going to be significantly lower than those willing or able to spend ten pounds less. It really is a quite extraordinary amount of money.
Things get more confusing when you consider digital distribution. The point here isn’t that it’s expensive to distribute in the UK. It’s that the money that comes in for it isn’t worth enough once exchanged into Euro. So presumably online prices will be similarly high. But is the audience going to stump up? Clearly MW2 is a massively anticipated game across all three major formats, and a big mainstream audience is gagging to get at it. But pricing like this flies wildly in the face of everything that the trends are currently suggesting. As the iPhone rockets into the stratosphere, making people rich on their 79p games, and while Steam regularly demonstrates that halving the price of a game far more than doubles the sales, is launching a AAA game into a recession-hit market at a 25 to 35% higher price than the norm going to be effective?
Of course, there’s always the perspective that game prices have only ever come down. PC games cost less today than they did 15 years ago (mid-90s RRPs were around £40 to £50 for PC games), and have stayed at £30 to £35 while everything else has gradually become more expensive. This can be somewhat countered by the, “Bloody hell, £30 is a LOT of money for a game” position. Render this in capital letters for the £40 version.
Earlier purchasers will notice that retailers are selling the games at pre-order prices that match standard game shelf prices if you order now before they’re released.
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@Duoae: Sorry :)
@mrrobsa: I believe it’s because for consoles the developer (?) has to pay for a software licence to allow them to develop for the platform (360, PS3 etc). Thus this cost is then tagged on to the cost of the games RRP.
“complaining about MW2 experimenting with a price increase above the current standard”: Hmm, that’s a unique way of putting it!
In this comments thread, people defend the price rise by talking about free markets and the benefits of unadulterated capitalism.
Outside my window, my neighbour walks by on his way to the Job Center.
I’m definitely not trying to troll or upset anyone here, but the discussion has me interested, so turning the question around then:
Is there a good reason why the UK should have lower prices than the rest of Europe?
Also people avoid attempting half assed comparisons with house prices when talking about games, as a point of justification for price hikes. The reason uk house prices have consistently gone up higher than inflation is down to a combination of supply & demand and increasingly flexible buy to let options, nothing to do with the manufacturing costs. It’s all about desirability.
Also LOL at the guy asking for RPS to go over to putting prices in $. What next should we celebrate the 4th of July?
I don’t get why everyone thinks they’re just setting a higher price to screw people. They’re setting a price they think will make them the most money, period. If they think the demand is high for the product and their profit-maximizing price is higher than the standard game, that’s what they’ll price it as.
I don’t see why not. And the 5th, 6th, 7th and 8th. I’m all for celebrations, no matter the date!
@skalpadda: I don’t think it’s lower than “the rest of Europe”. Lower than Scandinavia, certainly, but everything is expensive in Scandinavia. It’s less to do with things being cheap in the UK, and more everything being overpriced in Scandinavia (and I believe typical wages are higher as well, so it all more or less evens out in the end). ;)
Apart from that, keep in mind that the pound has dropped something like 20% in value, so compared to other countries, everything in the UK suddenly seems much cheaper — but it isn’t for people who live there. They get paid the same amount of pounds, and everything they buy costs the same amount of pounds.
@Legionary:
Yeah, I’m sure nobody is every unemployed in non-capitalist countries. Not.
I remember spending $35 on Atari 2600 games in the early 80’s. That would be something like $78 in 2009 dollars.
A-Scale: You actually don´t really need a dollar price here. you see that it has gone from £30 to £40, an increase by 33%, which is quite a lot.
What do you need a dollar price for here, it could as well have been an increase from 100 potatoes to 133 potatoes, 33% is 33%.
Regarding the topic: That´s too bad and i hope that other publisher´s don´t follow Activision´s example here. I´m from Germany, but often order my games from the UK, because they used to be cheaper, and in some cases i can´t get an uncut version over here (recent example: Left 4 Dead).
You know, they could charge 150 pounds and package it with a rape kit and people would still buy MW2.
oh wait.
The free market is apparently always better for the consumer, even when the consumer is paying more for less content. I would be GREATLY surprised if mow2 represented a massive improvement in multiplayer, so the only game is the single player content. Thats fine by me, as I never played multiplayer on the first one anyway. I rarely buy brand new games, and price tags going up is only going to encourage me to do so.
Having said that, I don’t want to actively complain about this… it’s their money and they are free to charge as much as they like for their product. I suspect it is a foolish move, but I don’t know for sure.
just to jump in on a tangent:
“The price of music has come down partly because you can now buy for £100 in software the sort of recording studio capabilities that would be 6 or even 7 figrues back when I was a teenager.”
no, it’s happening because it’s better to make a dollar on a song than nothing on a song, since people are going to download it anyway. a lot of smaller labels are dying because they have just enough popularity to get downloaded but not enough added value to get people to pay for the music they’re already going to listen to.
recording costs on the high end are still pretty astronomical, even before you get to the mastering stage.
jalf:
I don’t think it’s lower than “the rest of Europe”. Lower than Scandinavia, certainly, but everything is expensive in Scandinavia. It’s less to do with things being cheap in the UK, and more everything being overpriced in Scandinavia (and I believe typical wages are higher as well, so it all more or less evens out in the end). ;)
Apart from that, keep in mind that the pound has dropped something like 20% in value, so compared to other countries, everything in the UK suddenly seems much cheaper — but it isn’t for people who live there. They get paid the same amount of pounds, and everything they buy costs the same amount of pounds.
I made a quick check online, comparing Sweden, Germany, France, Austria, Switzerland and Norway; the price point for new big budget games seems to hover around 45-55€ (roughly £39-£47 at current rates). We don’t use the Euro here, but we pay the same price as most other European countries over Steam, in Euros, which is good or bad depending on the current value of Swedish Crowns to Euros. Right now it’s bad.
I know about the Pound value, at the moment our currency has plummeted as well, primarily because we’re so dependant on export trade with the US, so we’re pretty much in the same boat. That’s how economics work though.
From my point of view it looks like Activision are trying to charge the people in the UK the same as the rest of Europe. I’m not saying it’s a good thing and certainly their objective is maximizing profits rather than some notion of fairness, but still, what’s all the fuss about? ;)
Quote fail, the second paragraph should be part of the quote as well. Edit function, gods of RPF? *puppy eyes*
Well, then logically prices should be raised by 30% in Sweden as well, to compensate for the publisher’s lower income per sale. ;)
See the problem? Just because the value of your currency has fallen doesn’t mean you, as a person living in the country, is willing or able to pay the equivalent price premium.
Well, you pretty much cherry-picked some of the most expensive countries then. How about the prices in Romania, Greece or Prague?
The fuss is about the fact that britons do not live in the rest of Europe. They live in the UK, they have UK economies, are paid UK wages and pay UK prices for anything they buy. There are countless reasons why they might have a slightly lower disposable income than other parts of Europe. Lower wages, higher costs of living, different tax system, fewer benefits for those taxes, higher costs on health care or education there are a lot of factors that could cause it. Ultimately, you can’t charge people in one country based on the price in another. That’s why they don’t charge €50 for a game in China. They know it wouldn’t sell. That’s why everything is sold for peanuts in Eastern Europe. They know that selling at western European prices would just make the product unaffordable. It doesn’t work.
They have to set the price in each country based on how much that country is likely to pay. The amount you or I, who live in other countries, pay is irrelevant. Just like it’s irrelevant to US prices that we pay ~40% more than them.
It doesn’t matter to a British gamer that his game is cheaper than it’d be if he bought it in Denmark. If it is 30% more than he used to play, he is likely to buy 30% fewer games.
Apart from that, it still baffles me that you accept those €50+ prices. I haven’t bought a game from local stores for something like 5 years (HL2 might have been the last one, actually). I’d much rather pay half that and order it from a UK shop. I’d assumed people did the same in most of the rest of Europe.
The biggest complaint is that MW2 will have a short single player campaign so it should cost $35 instead of $70. What if they spent the extra money required to make a or 20, 30 hour single player campaign that maintains the same production values and quality as COD4 single player? Would that justify an increase in price?
@Owen:
Thanks for input on pricing, nice Gravatar too!
No worries mrrobsa, thanks.
I would like to try selling the single player separately and charge per hour for the multiplayer. I’m sure everybody here hates this idea, but let’s think about it for a moment:
What makes a “pay as you play” model good or bad is the price of the subscription, not the fact that you have to pay regularly.
Currently, (most?) people who bought CoD4 are only interested in the single player. Many of them think that that $70 is too much money for this.
Then there are people who play only the multiplayer player, or both modes, but they never get into the game so much that they play much.
And finally we have people like cliffski who say they put played “200+ hours”.
If think the whole experience is worth $70, it would be reasonable to charge $20 for the single player, and $0.25 per hour for playing the multiplayer. That way everybody pays for what he consumes. And you could still sell the whole package with a lifetime subscription for the people who want it all.
And the reason why this does not work is
1.) because most people who buy a game only use a fraction of the content,so they would never reach $70, and
2.) because Activision would never make prices like that. They would probably let you pay $50 first and then $10 per month or so.
but I also believe that 1) is the reason most potential customers do not buy the product and 2) is something companies can learn by failure.
sorry for all the spelling errors… I need the edit button more than you do!
Jalf:
The prices of imported goods do fluctuate quite a lot here, depending on the current value of our currency. Furthermore, if we want to buy digitally distributed games on Steam for example, we pay in Euros or Dollars (which of course get converted by your bank later) so in that regard we pay exactly what the value of our currency dictates. That goes for things like MMO subscriptions as well of course.
About the countries comparison, it was simply ones which were easy for me to check online. We already had one poster here from Greece saying the prices there are similar to the rest of Europe and I searched around a bit on Google trying to find retailers in other countries (surprisingly hard when you don’t understand much of the languages).
I couldn’t find much info on general prices, but two online stores I found in Poland had recommended market prices for new games (I looked for The Sims 3, Prototype and a few others) at around 120-160 zloty, which would be 28-37€ or £24-32.
Flipping that around, a quick Wikipedia search for the GDP per capita gives:
Sweden: $37,383
United Kingdom: $35,445
Poland: $17,625
(World Bank 2008)
Of course GDP isn’t a direct measure of your disposable income, but it should serve fairly well as an indication, and the differences between the UK and Poland are quite striking, yet the prices of PC games seem similar to the current UK prices.
I personally consider (the equivalent of) 50€ to be a lot of money, it’s not something I’ll toss away on an impulse buy and I’ll only buy new games at full price if I’m very certain I’ll have a great time playing them. For a good game it amounts to cheap entertainment, for a bad one it’s a terrible waste. I’m perfectly happy with waiting for price drops and there’s still plenty of opportunities for buying at sales, older games and cheap indie stuff, which is great.
Of course it doesn’t help that our retail of PC games is virtually dead.
Again, I’m absolutely not trying to annoy or anger anyone, I’m really curious of the motivations for all this :)
(Also, RPF? I should have my keyboard confiscated by the typo police)
40 quid? Fuck. That. Shit.
@Kieron
And that’s charm that I love. I thought the Peggles unit readout was brilliant, if only because it gave people an idea of just how long they would have to spend downloading a demo/game before they could play it. It’s a minor service that you provide(d) to your audience, and I loved it. I think that providing prices in USD as well as GBP is another minor service that the majority of your readers would find handy. But like I said, it’s your site, so feel free to report prices in Pounds, Battlefield Heroes points, or any other denomination you choose. I was simply making a suggestion.
I simply can’t afford games at £40. I would pay that for huge releases like Half Life 3 or similar but that’s about it. It’s rare enough that I pay £35 these days, one of the reasons I’m a PC gamer is because on the whole it’s the cheapest platform, the average price I pay must be £25 for a relativley new game.
Thank goodness for great multiplayer games like TF2 that will last me years.
Way to encourage piracy, make people wait for price drops, or Steam specials, buy second hand and generally hurt sales. Nice that they are subsidising the PC version by hiking the Console price though.
If any retailers actually sell it at that price I’ll be pretty surprised… Particularly good retailers like amazon. £25 is my bet from there, maybe 30.
£40 for a game? No way in hell am I ever gonna buy a game at that price.
“The free market is apparently always better for the consumer, even when the consumer is paying more for less content.”
Oh yes the free market has really assraped us poor gamers over the years!. Back in my day, a game cost at least as much as now (if not more) in inflation-adjusted terms, and yet the game shipped on a single 1.44MB floppy disk (or a ZX spectrum cassette) and contained less artwork than a modern-day banner advert.
And now games have maybe 30 hours of voiceovers, full screen video, interactive tutorials, 32 bit color in 1900×1200 res with online multiplayer and integrated voice chat…
We are so fucking ripped off. The amount of effort in making games, and their quality has not changed since 1981.
/sarcasm
Anyone who thinks there is not a free market in making and selling games probably should try running a games company before asserting that.
I’m as ‘fuck the big companies’ as anyone else, but the truth is, there *is* a free market to make and sell games now.
Do all you people get so foaming-at-the-mouth if your local coffee shop sells its coffee for more than you want to buy? Just move on and spend your cash at another coffee store guys.
@cliffski:
“And now games have…”
Seriously, I wish producers would stop trying to justify product prices by listing production costs. I as a consumer decide what I am willing to invest in a game. A producer needs to make games so he can make a profit by selling them at prices that are within my budget.
It is not important how many hours a game can be played, only how many hours are actually played by the person who makes the buying decision. It is not important how much money it costs to make a game, it is only important how much money and time consumers are willing to spend on computer games.
As an individual consumer I can tell you that it is extremely difficult to sell me a game for $70. Interestingly, it is far easier to make me buy 4 games for 20,-. A company like Activision/Blizzard should consider this type of consumer feedback when they plan projects.
“Anyone who thinks there is not a free market in making and selling games”
The PC is of course a free market. Console markets less so, since they are regulated. I think that’s interesting to point out, since for cross platform games, the two worlds clash.
“Back in my day…”
I remember these days, and there was not even close to that much competition as there is today. Think about it: The games from back then are still part of todays game pool. I can get some awesome 200+ hour game for 20,-, even for 3,-. Surly this has an impact on prices of new ‘AAA’ releases?
How many retailers actually charge the full RRP anyway? Most of the PC or 360 games I buy are supposed to be about £10 more than I pay for them. I rarely pay more than £25 for a PC game and about £35 for a 360 game. In fact most of the PC games I’ve bought in recent times have been about £17.99.
I think MW2 will still sell by the truck load even at the ridiculous price of £55 due to the huge fan base, but I can’t see many other titles being able to pull that off.
We’re in the middle of a recesion, unemployment is rising. All that will happen if they put prices up by a tenner are that the overall sales of games will go down as people can afford to buy less of them. Seems like a no brainer to me.
Price is certainly a major factor in my games purchasing. On the 360 for instance I’ll wait for new releases to drop to around the £30 mark before I’ll buy them. For instance I’d like a copy of “Call of Juarez 2″ for my 360, but not whilst the cheapest I can buy it for is £37. Games publishers might say that the high price of games reflects the costs of production etc, but my wallet says otherwise.
Sorry cliffski but I’ve gotta intervene on one small point a hot chocolate from starbucks would cost me about £3.20 (Umm I think, it’s been a few weeks since I last bought one), which isn’t quite the same as buying a game which is a much larger one time outlay. Is the hot choco a tad overpriced, I think so, but I feel more comfortable absorbing a near impulse price purchase than I do a full game purchase. That said, remember what happened to the music industry? Turns out 70p per track on ITunes is easier to absorb than £1.10-£1.50 per track when the music industry was massively overcharging on albums and the consumer revolt eventually came back to bite them on the ass in a pretty big way. Not that I use ITunes, I still feel that service is a rip-off, but that’s just me I guess.
Personally, my whole frothing at the mouth problem is that a typical game is already quite significantly far from impulse purchase levels (AAA titles anyway) that I am much more likely to pick and choose only a small selection of games.
Oh, and you can now pick and choose music tracks, instead of being forced to pay for a whole album only to find only 3 of the 10-15 tracks was actually any good. Grrr.
If the prices go up I will rethink even bothering to buy another gaming pc, and really I will just flog my consoles on ebay and take up crack or something, will end up cheaper.
Anyone want, 360 elite, ps3, wii psp and a dslite … going cheap.
if game developers split their games up and allow you to pick and choose what bits you want, they get accused of charging for stuff ‘that should be free’ and ‘price gouging’ and ‘greed’.
Nobody HAD to buy horse armour in oblivion, but apparently giving people the option was evil.
Developers get slagged off regardless what they do, price wise.
@MC
If you don’t then wait for it to come down in price and reach a price point where it does provide you with value for money. Duh. The way game prices decrease with age means games sell at a variety of price points lower but not higher that the initial one. The way the games market works is such that all you need to do is wait for it to reach a price point you like. What’s to complain about?
Gee! Thanks, mister. I never wouldn’t had thought ‘uh nothing like that.
Seriously though… the whole point of your little aside there is completely at odds with how game developers and publishers want the game industry to work. The prices shouldn’t fall that fast…. there’s no need for them to. Imagine if you turned around to Cliffski and told him that you expected to pick up his games for £2, 6 months after release. What do you think he thinks about that? I certainly believe that game prices fall off too quickly at retail and relying on that system to get what you want actually puts developers out of pocket instead of rewarding them for the game you want – whether that be SP, SP+MP or MP.
The rest of that post is just confused. Like you give an example of supposed market failure in which it is clear the market response works and forces the company to lift their game! Or you get confused talking about DRM analogies when the point is one of simple inflation. Or get confused about whether the developers get pay rises when the simple point is that if that investors just got rich off of a polished AAA game we will see more investment in attempts to make polished AAA games. Or complain about the games industry having a standard price while complaining about MW2 experimenting with a price increase above the current standard. Or try to pretend that you can decide what the proper pricing should be by waving your hands about console sales as if that were the only factor. No, no, no.
It’s not my fault you can’t follow reasoning. If it’s confused then it’s because the initial points i was responding to make no sense either…. hence the point of my response. I could respond to each and every one of your complaints about my points and clarify them for you but since you’re clearly not interested in debate, more in dismissal (and it seems no one else is either) then i guess i won’t.
If you want to continue i’m happy to do so… but less of the under-handed insults because i don’t follow your exact viewpoint or am a fan boy of “whatever point of view” please…
Could do with editing, lol. The missing bit of the first part of the response would be:
That part of the ‘free market’ seems to work quite well but it’s based mainly on self space, used games and not so much on the quality of a game title (which would be a better reason for reducing the price of a game so quickly after launch). The reason to complain is that because of the way the games industry works (i.e. discrete price points) then what we’ll see is many new games just setting their prices at the new ‘normal’ regardless of quality, content or perceived worth – same as it’s ever been….
Man, how much will the collector’s edition (the one that includes NVG) cost!?
For £55 I could buy *all* of the following (new/boxed):
The Witcher, Mass Effect, World of Goo, GTA IV, Tomb Raider Underworld and Bioshock.
Games I buy now are typically between £5 and £15, (eg last month: Dead Space £7.99 released 9 months ago) and I might stretch to £25 for a newly released game if it was something special, but that’s about it.
It doesn’t bother me that much if a games company wants to try and ‘over-price’ its games. It is very rare that the price remains very high for very long (even very strong sellers seem to eventually drop at least to under £20) and there are a lot of other games out there for me to spend my time and money on while I wait for the price to fall.
@cliffski
If publishers would actually sell significant amounts of content for a reasonable price, then I don’t think anyone would care too much (I haven’t seen much in the way of complaints regarding the Fallout 3 DLC pricing)
The horse armor DLC was your coffee shop example of offering to sprinkle some cinnamon on the $3 coffee for an extra dollar. You can argue all you like about how only people who want to pay for it need pay for it, but everyone else will be over here condemning them for, at best, not understanding their market; or more likely, preying on the ignorant to make a quick buck.
Do you honestly think that if MW2 was offered as either the single player component, or the multiplayer component, for 2/3rds the price of a normal game, or both for full price, it wouldn’t be hailed by gamers everywhere as the best deal since sliced bread?
No it wouldn’t. I’ve read enough threads when abuse gets hurled around for people trying to separate games into different parts to know that it would just result in the same.
The only answer the majority of gamers will give to any discussion of game pricing is “we want everything we have right now, but much cheaper”.
There is a free market. Anyone who doesn’t want to buy COD6, just don’t buy it, then get on with your lives.
if you want to be annoyed about prices, get annoyed about energy or water prices, something where you *have* to consume it.
I’m not sure it’ll come to much. I seem to recall Half Life 2 costing more than anything else on PC at retail when it was first released, purely because Valve / whoever the publisher was knew they could get away with it. Everything else just stayed the same.
Cod6 is expensive, no doubt, maybe too expensive, but it’ll sell by the bucket load. I don’t think every other publisher will automatically follow suit though. Regardless of personal opinion, Modern Warfare 2 is probably 2009’s biggest gaming release, by a distance. You can realistically sell it at £40 for the pc version – but the same doesn’t necessarily apply to Mirror’s Edge 2, Dragon Age, Diablo 3, or whatever.
Sadly, I will almost certainly pay over the odds to have Cod6 in my hands on the day of release, as I belong to a Cod4 clan, and our masterplan (I use both ‘master’ and ‘plan’ in the loosest possible sense) is to get a couple of UK servers up tout suite (sp?). It’s all about bums on seats, apparently. I won’t be paying £40 mind, but it’ll still be more than I’m used to (according to shopto.net, the RRP for Cod6 PC is actually £45).
As an aside, my clan has somewhere between fifteen and twenty members who play Cod4, but only two or maybe three of us (including myself) have ever actually played the single player.
Basically I might pay extra for this, but everything else can wait for the sales. Apologies for over-long rambling.
Well, this is an interesting turn of events. Wonder if ActiBlizz are thinking twice now…
Interesting to see this story is The Times frontpage news (at least online);
http://technology.timesonline.co.uk/tol/news/tech_and_web/gadgets_and_gaming/article6728189.ece
Huzzah!
http://savygamer.co.uk/2009/08/call-of-duty-modern-warfare-2-pc-2799.html
£27.99 preorder.
66,6£ for this in Norway, you get thing too cheap :p
If the price stays that high, I’ll just buy a CD-Key in some Korean Online store and get the CD somewhere else. No way I’m spending that amount of money on a game.