The new generation of consoles brought with it a pretty big change for some major titles from various publisher; a video game price increase from the previous standard of $59.99 to $69.99. Take-Two CEO Strauss Zelnick thinks that players are ready to see a price increase on games, citing the last major game price increase as back in 2005 when the standard went from $49.99 to $59.99.
At the Morgan Stanley Technology, Media, & Telecom Conference this week, VGC noted that Zelnick was asked about the reaction to NBA 2K21’s $70 price point. “We announced a $70 price point for NBA 2K21, our view was that we’re offering an array of extraordinary experiences, lots of replayability,” He said. “And the last time there was a frontline price increase in the US was 2005, 2006, so we think consumers were ready for it.”
But this doesn’t mean all games are about to jump up. Zelnick isn’t saying game prices need to increase for the sake of increasing, but rather that the value of the content of the game should reflect or exceed what is being charged. “We haven’t said anything about pricing other titles so far, and we tend to make announcements on a title-by-title basis, but I think our view is [that we want to] always deliver more value than what we charge, make sure the consumer has the experience and[…] the experience of paying for it, both are positive experiences.”
“We all know anecdotally that even if you love a consumer experience, if you feel you were overcharged for it, it ruins the experience, you don’t want to have it again,” Zelnick compares game pricing to going to a fancy restaurant. “[If you] go to a great restaurant, a really really fine restaurant, have a great meal and great service, then you get a check that’s double what you think it should be, you’re never going back.”
He clarified further that monetization follows captivating and engaging consumers, not the other way around. “So we always want to make sure that consumers feel like we deliver much more than we ask in return, and that’s true for our current consumer spending as well. We’re an entertainment company, we’re here to captivate and engage consumers, and if we do that then monetization follows.”
While many developers like Sony and Activision has also been increasing pricing on premium next-gen titles to $70, still others are unsure of the increase, seeing how the beginning of the new generation plays out. Ubisoft won’t be increasing any games to $70 this year, and even Activision has been releasing a number of games at lower price points as well, based on varying factors. An executive from Microsoft believes $70 will be an exception, not a rule. We’re likely to see a lot of variable price points across the board, with $70 being a maximum, rather than a baseline. Analysts also believe that $70 games will sell well regardless. Indeed, Call of Duty: Black Ops Cold War launched at $70 and is breaking industry records already.