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business newsIn Video-Game Prices, More Is Definitely More
By
Michael Comeau
Jul 23, 2009 10:20 am
Activision's premium pricing blows EA's bargains out of the water.
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Battlefield 1943 has sold over 600,000 copies since July 8, and EA seems especially excited about the fact that their fan base has reached 43 million kills.
So, 600,000 units in 2 weeks. That’s big, right? Wrong.
As with Apple’s (AAPL) app store for the iPhone, EA’s selling a lot of units, but at a very low price. Battlefield 1943 is only $15, and if we multiply that by 600,000, we end up with $9 million. And that’s before Microsoft and Sony wet their beaks.
EA’s expected to pull in over $1 billion in revenue this quarter alone. So I just can’t get excited about a game that barely budges the needle.
There’s another problem here -- Battlefield 1943 is actually a pretty awesome game. And if people are busy playing their awesome $15 games, they’re not out buying the $59.99 games that make the industry hum. High-quality $15 titles are great for the players -- and great for EA’s image -- but not so great when it comes to filling the cash register.
At the other end of the spectrum, Activision (ATVI) is taking the idea of premium pricing to a new level, with this fall’s Call of Duty: Modern Warfare 2, which is among the biggest game releases of this console generation.
Back in 2007, the almighty Halo 3 rolled in with 3 editions, priced at $59.99, $69.99, and $129.99, respectively. To make a long story short: With multi-edition games, the more you pay, the more game-related paraphernalia you get. In Halo 3’s case, $129.99 got you a goofy-looking helmet that fit just about perfectly on a cat.
Activision’s taking an even more aggressive stance with Modern Warfare 2, with SKUs priced at $59.99, $79.99, and $149.99 in the US, and even higher in the UK. Charging $149.99 for a video-game in a recession may seem outrageous -- but you do get a pair of night-vision goggles!Since I own Activision, I’m very happy that they’re pushing the limits on pricing. Even at these prices, Modern Warfare 2 will probably sell 600,000 units in its first hour of release. Now that will be something to brag about.
Position in ATVI
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