By John Walker on July 16th, 2009 at 6:50 pm.
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.