Analysts: '$60 price point not sticking' @ Gaming Target

Written by John Scalzo on June 01, 2006

News: Good news for gamers: Next-gen games might not ship at $60 anymore. Maybe.

Several video game analysts are worried that the new next-gen standard price of $60 per game is slowly disappearing. (Remember these analysts see $60 games as more profitable and profit is good, regardless of how many consumers it angers).

They point to the recent price drops of THQ's The Outfit and EA's FIFA 06 along with the initial $40 price of Take Two's Top Spin 2 and Table Tennis as the source of the problem.

"This inability of triple A titles to hold $60 for more than six months at this early stage, when consumers tend to be hard-core gamers and not as price-sensitive, raises questions about [the] sustainability [of the price hike] and profits," wrote Deutsche Bank analyst Jeetil Patel, who reported the price cuts in a research note Tuesday.

They would go on to say that most of the discounted games were from the 360's November launch, but failed to elaborate on some of the reasons why these particular games received price cuts. They did point out that most of the games were sequels or updates of previous games, but didn't go further than that.

One unnamed analyst believes that the $60 price point is already doomed across every game and every system: "It's not going to happen. You can already kind of feel it."

Although others believe these games are just an anomaly and we gamers will be paying $60 per game for our gaming fix for a good, long time.

While I'm no high-faluting analyst, here's my two cents on these price cuts. The Outfit was cut because the reviews were not kind and it's being blown out of the water saleswise by the greatest WWII game ever, Call of Duty 2. FIFA 06 was cut because 2006 FIFA World Cup Germany was just released. Finally, Top Spin 2 and Table Tennis launched at $40 because those are "impulse" games. At $40, people will try them to see if they're fun. At $60 they languish on store shelves until they drop in price and nobody buys them at the lower price either.

So there. To sum up, many games will still launch at $60, some games will drop in price because the only way to keep selling them is after a price drop and other games will launch at a lower price because that is all they could sell for in a competetive market.

So which Wall Steet firm wants to give me a job?

source: TheStreet.com