After announcing a higher-than-normal $70 MSRP for NBA2K21 on the PS5 and Xbox Series X last month, publisher Take-Two is now suggesting that increased price point might not be the standard for its next-generation console games going forward.
“We’re definitely announcing pricing on a title by title basis,” CEO Strauss Zelnick said in an earnings call Monday evening. “I would just observe, there hasn’t been a frontline price increase for a very long time, although costs have increased significantly.”
That’s a fair point: the functional ceiling for high-end games last increased back in 2006 or so, when the standard rose went from $50 to $60 alongside the rollout of the Xbox 360 and PS3. When adjusted for inflation, the top asking price for big-budget games has never been lower, while development costs have never been higher.
Despite those pressures, though, Zelnick was unwilling on the call to set $70 as his company’s new de facto standard pricing. “We’re applying this price point in the case where we think the quality not only supports it, but demands it,” he said. “Production costs have gone up greatly. But most importantly, the consumer experience is more robust than ever before. And I’m utterly convinced that NBA 2K21 will be nothing short of extraordinary, so I don’t expect that there will be any concerns.”
Zelnick’s comments expand on a less specific, more anodyne statement from the company in July: “2K’s suggested retail prices for its games are meant to represent the value being offered,” a 2K rep said at the time. “With nearly endless replay value and many new additions and improvements only possible on next-generation consoles, we believe our updated suggested retail price fairly represents the value of NBA 2K21.”
An outlier or a harbinger?
While it’s still early in the console transition cycle, no other publisher has yet publicly followed Take-Two onto the $70 game pricing limb, even as a trial balloon. In contrast, Ubisoft CEO Yves Guillemot said explicitly in a recent earnings call that its “Christmas games” for 2020 would be sold at the current standard price of $60.
Microsoft’s Phil Spencer dodged the question of $70 game pricing a bit in a recent interview with The Washington Post, offering no comment on the company’s own first-party game pricing going forward.
“As an industry, we can price things whatever we want to price them, and the customer will decide what the right price is for them,” he told the Post. “I’m not negative on people setting a new price point for games because I know everybody’s going to drive their own decisions based on their own business needs. But gamers have more choice today than they ever have. In the end, I know the customer is in control of the price that they pay, and I trust that system.”
Despite the public silence from publishers, some industry watchers see the new, higher price point as almost inevitable at this point.
“IDG works with all major game publishers, and our channel checks indicate that other publishers are also exploring moving their next-gen pricing up on certain franchises,” Yoshio Osaki, CEO of analyst firm IDG, told GamesIndustry.biz last month. “While the cost of development and publishing have gone up, and pricing in other entertainment verticals has also gone up substantially, next-gen software pricing has not reflected these increases. $59.99 to $69.99 does not even cover these other cost increases completely but does move it more in the proper direction.”
In the end, it may be up to gamers to vote with their wallets to determine whether an extra $10 per game crosses some sort of spending break point. “The typical console gamer buys just a few full games per year, so while a $10 price hike may reduce demand at the margins, I also suspect that more gamers will instead just wait until the price drops either on packaged games or on the digital stores to $60 or $50.” IDC analyst Lewis Ward told Tom’s guide last month. “So the main effect may be to push out sales to a later date for a portion of gamers with limited spending power.”
“We’ll see if [$70 is] the standard price for full games on these consoles, but my gut says that unless there’s a big revolt by gamers, it will become the norm pretty quickly,” Ward continued.
Listing image by Hughes Johnson