Today I just started reading the new Chris Anderson book, Free: The Future of a Radical Price. Expectations after the Long Tail is sky-high, but I have read more before reading this new book and have some good understanding of the concept. I’m looking forward to be somewhat convinced of this new changing model or if we should call the future digital market. A review of the book will come sooner.
Despise the shaky economic in the world today, the game industry have held up high sales numbers and total revenue stream. Even though some big studios and and famous name have had to close. We see more games than before today. I see it everyday in my work, and the increase of Free-2-Play games (many MMO). How more and more game are based on In-Game Advertising and In-game items (transactions). But for this model to be successful the number one basic thing must be in place, a huge audience (or potential customers). And the possibility to sell directly to your potential consumer is huge today for smaller developers.
You think that prices on games should decrease according to the three parameters Chris talk about in his book, Processorpower, bandwidth and storage. But the cost of the biggest titles have just increased anyway. One big news on the web in recent times is the price point of Modern Warfare 2, one of this years biggest game. They when in the opposite way and increased it above the highest price point when it will be released. They will do the same on DJ Hero and the new Tony Hawk game. And they will probably still sell millions of units. I know I will get my copy anyway.
The Activision CEO have said that he would like to increase the general price point even more than it is today. When every trend is pointing in the other direction, its a bold statement to want to increase prices. And the economy still haven’t recovered, so potential consumer will have to re-think their game spending money, and people will buy fewer games. I think it would be smarter, specially as a smaller company to lower price even more to sell more units.
Also a interesting even increasing trend is DLC to increase the life time as well as value of a game. But for DLC to be successful, the game have to be good to begin with. As with everything, the most important thing is the quality of the initial product! Any time, anywhere.