After spending some time thinking about why there's been an uptick in press activity talking about how pricing for Xbox Live Arcade games has been rising of late, something clicked. At first, I thought it was weird that people were talking about it now, given that it's been a trend for well over a year now, as I posted here back in May of 2010. But then… it made sense to talk about how XBLA games are getting more expensive. Why?
Microsoft will be rolling out a new 1600 Microsoft Points cost level for XBLA games soon.
You could see it as soon as Microsoft's next Arcade promotion. At first, the new pricing level will be rolled out across a few hand-picked titles… but the new standard will spread and should be in wide use by Q3 2012, if not sooner. Publishers and developers will likely cite increased development costs as reasons for the increase—along with natural inflation—but it's worth wondering when or if enough is enough for consumers. How far is the industry willing to push its limits before the market is priced out of caring about these games, in general, or is that even a fear at this point?
The 1200-point plateau has had its share of winners (Bastion, Shadow Complex), but there have been some stinkers (0 Day Attack on Earth) and unexplained pricing decisions (RayStorm HD) that tended to make the plateau a questionable one. There are still some games that buck the 1200-point asking price, like Ms. 'Splosion Man for 800 points, but by and large most consumers expect new releases to sport the higher price tag. The expectation is that consumers will be conditioned to gradually accept the new price point, as well.
The problem with adopting this new price point will be for publishers and developers to prove the value of their games, especially when some new full retail titles can be purchased for the same amount of money. Games with this price point should and will be subject to tighter review standards and criticism. Expectations for graphics and sound, gameplay, and replay value all rise a little bit. This is why Microsoft will need to be selective with the games that are chosen and green-lighted to sport the new price tag. If games come out of the chute that don't impress as much as they should, reaction to the increase will be negative and could adversely affect sales moving forward.
Even if consumer conditioning takes longer than desired, don't expect this move to be reversed or for it to not happen. With the next generation of hardware on the horizon, games across the board will be more expensive in some way—whether it's directly at retail for $70, sporting fewer features in lieu of DLC down the road, or perhaps even renewable licenses. The standard for downloadable games will undoubtedly move to $20 each. The industry's path towards getting more revenue will continue unabated, and there's plenty of confidence that consumers are far too invested to move on to another form of entertainment at this juncture. It might be a bit of a gamble, but revenue continues to be strong despite rising prices and fewer features for software.
When 20 becomes 15
This is a tough argument. No one ever wants to pay more, consumers dislike price increases. Gamers are fairly unique in that they really like to talk about price, and there is some mental calculation of hours per dollar that takes place. An amazing game that is 2 hours can be $10, and a mediocre game that is 15 hours can be $10 and somehow that mediocre game is the better value. It's an odd way to think of entertainment, that one's time is much less valuable than one's money.
We have a finite amount of hours to game, and a finite amount of dollars to spend. There should be a balance where one seeks the maximum number of enjoyable gaming hours within our budget. Instead, many gamers seek more hours, independent of how enjoyable the game is. So developers have to focus on length often to the detriment of a game (as reviews on this site lament).
Anyway, I'm slowly responding to the original point, that if MS moves the stick to $20, gamers somehow lose. I disagree that that is necessarily true. Because the primary difference between downloadable games and disc-based games is length. This is arguable, but certainly on graphics, story, gameplay or sound downloadable games are often the equals of disc games. And in terms of enjoyment, they can be just as enjoyable to play and have an equal number of moments of happiness created in the gamer. If this happens at a $20 pricepoint vs a $50 or $60 pricepoint for a disc based game, that $20 seems like a great deal.
I think gamers today have much better deals available than 10 or 20 years ago. Your previous piece on the HD tax ignores the fact that in the 90s, there was no $10 or $15 game. It was full retail or nothing. I paid $50 for Rampage (nes). This was a huge amount of mowing money for me at the time, without even counting inflation. It ended up being a terrible purchase for many reasons, especially as my favorite character, the wolf wasn't even in the game. Though it was easy enough that I could convince my sister to play co-op and we had some pretty good memories (so maybe it wasn't a terrible purchase).
Today, aside from having a wealth of information on what games are good/bad, and a huge variety of outlets to compare prices at, a person also can purchase downloadable content at a discount, even when not on promotion. Points for Nintendo, Sony and MS all can be purchase for a 10-25% discount without much searching. 4000 MS pts routinely goes on sale for $40. Which means that the $20 xbla really only costs $15.