Thursday, March 17, 2005

Activision mulling game price hike

According to Chief Executive Officer Robert Kotick, Activision is mulling price increase for next generation console games. Kotick used movie industry analogy to make his point in interview with Investor’s Business Daily. Matt Saunderson was kind enough to post this news at Advancedmn. Movies still run the standard two hours but ticket prices have been increasing steadily, while the game industry has seen game budgets double while offering more content for players, despite these developments, game prices have remained steady.

I would say that until now game industry has managed to maintain this price level, because sales have more than doubled, therefore bringing in more revenue – Elementary, my dear Watson. It has been good time for players, better games at the same (high) price. With this evident development of increasing production costs and new generation consoles, well, I am not so certain that market would react to price hike positively. I could be wrong, but I think that raising prices will cut the amount of games that players are buying. This would further drive up sales of those popular and well-marketed games that are in the hands of major publishers. I see a spiralling vicious circle that creates mega franchises, which come out to the markets year after year and monopolize or at least oligopolize that specific genre.
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