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Not only eliminating the manufacturing and transportation costs, but frequently eliminating the wholesale/retail markup. No need to cut in Gamestop if your customer just downloads directly from you.MadFrenchie said:Yes, the gaming audience in general has enjoyed substantial and sustained growth over the past decade, from what I've seen from entities like the ESA. And I remember a time new titles only cost 50 USD, actually. So box costs have increased, despite the transition to electronic purchases eliminating a substantial amount of the manufacturing and transportation costs of selling copies. All this contributes to your point.I think there is an underlying perception that some believe is "economic truth" that since a loaf of bread cost "x" in 2000 and it costs "x+y" in 2017, everything else should follow the same pattern (never mind that wages, especially minimum wages don't... but that's a different discussion )MadFrenchie said:I'm kind of wondering what extra costs we're even referring to here. It's not like the previous title released a decade ago.. So, inflation, I guess?
When applied to game prices it ignores the explosion in the market that for example, made 100K players in an MMO in 2000 a success where that would be a colossal failure in 2017.
Game prices have remained relatively the same simply because the volume of sales, without and equal volume of costs associated with the increased sales, has exploded. But there seems to be this casual folk wisdom going around that the prices should be higher because you know, bread costs more.
Then the next step is to posit that we the consumers are cheap bastards and we need to be tricked into paying what we should be paying. Sure keep the box price at $69.99 just like 10 years ago but since we should be paying more (see above) the companies need to add microtransactions and loot boxes so they can charge that $99.99 average which is what they really "should be" charging.
These things, expressed in simple twitter-friendly one liners, is what I see posted over and over again in any internet post trying to defend shady business practices in game we would otherwise want to play.
Strike one... care to try again?MrTuggles said:
What a track record... Star Citizen... and of all games... Revival.
7174 posts, and not one constructive one...
Absolutely agree. We are having an all time banner year with stock trading at highs yet 2 weeks ago laid off employees. I think that’s Bullshit too.Ok that's fair. I was looking at the post in a somewhat broader sense when I saw it. That box fees don't "cover what is needed".You're right... I'm only a Director for the 5th biggest transportation company in the world. What the hell does that have to do with anything? Is yours bigger than mine? Does that make a difference?I'm not talking about recouping money, And I said just that.Did you actually read the whole post and the linked analysis article? It was estimated that they needed to make $400M in sales to recoup their money. That included things like the licensing fees, development costs, marketing, retailers etc...Well box fees don't cover what the company "needs to make". I'm not sure why some of you guys can't understand this but it's not about "covering development". Or at least "solely covering development". I mean, do anyone of you actually work in larger companies?
Mark my words... you will be paying by the hour at some point down the road. Not for Battlefront 2... but for some game. (I'd actually rather that than the stupid lootboxes to be honest, but the sad part is that they will STILL have the lootboxes.. plus the box fee.)
But to go back to your "apparently box fees don't cover the cost of development in the 21st century" comment. that's utter bullshit as proven by the factual numbers.
I find it hard to believe you all work in small mom and pop businesses.
don't you have "local conversations" or regular announcements on what the company expects to make that fiscal year?
Publicly traded companies (for the umpteenth time squared) set their projections on what they need/want to make. They have to make this. Why? Because it's "your money" (the investors) that they are trying to make. If they don't make these projections then it's their stock price going down.
If you have ever invested in a company you do this to "make money".
You want to buy games from publicly traded companies? Then this is what happens. That's it, so predictable, nothing has changed from years ago. They will always find a way to maximize profits. Always.
Are there better ways to make these goals? maybe. Don't know.
As far as paying by the hour, it used to be that online games were paid by the hour so "yeah" full circle I suppose in an odd sort of way.
They sold $650M as of the end of 2015. As the article says at the end:
EA has made bank and enough to pay for several $100 million projects based on the profit they've garnered from Battlefront alone.
And that was just with a box fee. So yes... just a box fee can in fact cover the cost of development in the 21st century... as well as the cost of the license, marketing, retailers etc... with hundreds of millions in profits.
edit: and by your answer you've never worked in a large corporation.
The person I responded to said "apparently box fees don't cover the cost of development in the 21st century". Thats utter bullshit as proven by the factual numbers. Game had a $50M budget and sold $650M as of the end of 2015. Factor in all the costs plus a very healthy margin and they still "made bank".
The issue always seems to be: are games making enough money for their companies. And then people say "well look, box costs cover development/don't cover development and they need more money. And players start showing that they made "plenty of profit", when in reality that profit is needed to make their fiscal projections.
And while I work for one of the top two biotech companies "for a certain product" (arguably #1) if you work for one of the top 5 transportation companies (and I assume publicly traded and not some non-profit) then you know full well that you will hear about how much you are slated to grow within the year.
And what happens when you do or don't.
So what other interesting thing could they do to make more money. That is what the goal is. Simply dropping the revenue stream isn't an option. What is the better way they can recoup that loss if it's removed?Realizer said:Okay I think many of us here understand that developers need to pay their employees, people don't work for free etc. The problem here is an obvious lack of design forethought and in game systems, to push out a "Star Wars" product to cash in revenue ahead of the new movie.Look I don't want argue semantics about how words or phrases should be used or how I could better have stated a point. Let me clarify, "Apparently, the box fee and DLC streams are perceived as revenue restraining by EA. The costs of development have increased over the past three decades while retail fees have not kept pace with both cost and inflation. Therefore in order to increase the profit margin and make development product development more viable publishers like EA are source multiple revenue streams in order to maximize profit and reduce the risk and instability of any single stream." That is my perception.Of course. But the statement "cover the cost" in common everyday discussions carries with it an implication of "breaking even" to most people that see it. And that is either deliberately or inadvertently misleading.Nothing is that cleanly defined that it can easily and simply be divided into binary categories. Roget couldn't even do it and he was brilliant.
How much a business considers necessary to justify production, development, or an expense is subjective. My point is they consider it necessary to return an amount of revenue. They can do that through broader sales, tiered sales (what they're doing now or with DLC), or fewer sales at a higher pricepoint. What is going to maximize revenue? You'll never get a consistent answer between publishers or games within a publisher. EA might have different expectations and budgets for different titles.
So of course it's extra profit. Saying it covers the cost of development is more likely alluding to the product returning the expected revenue not as a specific budget item. I agree that it's not simply something to cover the budget, but rather a key component in a more complicated revenue projection.
It shouldn't be used synonymously with "cover the projected target revenue" the way it often is here.
I mean... don't you see the irony in the fact that this sort of thing was extremely rare in B2P games 10 or 20 years ago when the box sales numbers were a fraction of what they are today? Now they are pulling in a lot more from just general up front sales and microtransactions are everywhere in B2P games.
Something tells me this is all about "greed is good" where no ROI is ever too obscene. It kind of reminds me of banks with transaction fees... covering the cost?
The industry has not quite yet figured out how to market and sell their products the best way. They're still trying to lower the barrier of entry and maximize revenue per person while still keeping players interested and engaged in their game.
The problem of DLC, expansions, and Season Passes fragmenting game communities is real. MMOs suffer from this horribly and everyone seems to either be ignoring the problem or discounting this as a factor for attrition.
Obsidian considers this such an important topic that they've recently provided a public survey to try and understand their demographic more accurately. It also signals, to me, that they're still figuring this out. This is a studio with industry veterans with experience going back to the earliest days of the industry and they still are working through it. That coupled with the constant experimentation and shifting of monetizing methods says to me no one has arrived at an answer.
Greed is never good whether it's in the love and pursuit of wealth or by being a miser. I'm not advocating that. There are two halves of the greedy coin and in these threads I don't think the publisher is the only entity sporting greedy entitlement.
I would all be aboard with pre-order and all if there had been any sort of creativity involved in this monetization and progression model. They are just cramming everything into these single loot crates, instead of coming up with something at least interesting. Especially since they involve power items.
To me it seems like they took the easy way out to throw out a product knowing it will only last till the movie hype dies. Lack of effort and potential longevity don't bode confidence in would be buyers/players.
If it were your business how would you do it? What would you do to make up that loss while still keeping player counts up and fragmentation down?