EA recently announced that it would be closing Visceral Games studio, best known for developing the well-received franchise, Dead Space. The closing of Visceral Games is one of many studios that has been closed by EA over the years, with one of the weakest arguments that could be mustered:
Our Visceral studio has been developing an action-adventure title set in the Star Wars universe. In its current form, it was shaping up to be a story-based, linear adventure game….It has become clear that to deliver an experience that players will want to come back to and enjoy for a long time to come, we needed to pivot the design…we are shifting the game to be a broader experience that allows for more variety and player agency, leaning into the capabilities of our Frostbite engine and reimagining central elements of the game to give players a Star Wars adventure of greater depth and breadth to explore….
Our Visceral studio will be ramping down and closing, and we’re in the midst of shifting as many of the team as possible to other projects and teams at EA….
Bringing new Star Wars games to life for every passionate fan out there is what drives us as creators. It’s what has inspired us to deliver the massive new Star Wars Battlefront II experience launching in just a few weeks. It fuels our live service in Star Wars Galaxy of Heroes….
Translations to most of us, “We want to change this game to be more like the games that make us a lot more money.” But this line of thinking is grossly flawed, there are other ways to make money besides loot-boxes or microtransactions. There are pricing strategies that exist that can keep studios and publishers from resorting to these tactics while still creating the games that consumers want.
Dead in Space
To understand part of Visceral Studio’s predicament, you need to understand an important part of its past. Dead Space 2 received critical acclaim when it came to reviews, but ultimately failed when it came to sales. The game did manage to sell 4 million copies but with a budget of $60 million which was spent on marketing with retailers and marketplaces taking a decent cut of each sale; it failed to meet expectations. All of these factors lead to what is widely considered the worst Dead Space, Dead Space 3, being shaped around the idea of micro-transactions. If EA can’t make enough sales with the Dead Space franchise, then the only other option is to make those who pay for it, pay more.
At least, this was EA’s idea and is very obviously the route that other developers have taken. It’s an issue that exists for a few reasons and has several solutions that very few publishers (or in some cases none) have chosen as an option. It is because of these many publishers and studios not opting for these options that we end up in our current predicament where games must have some sort of micro-transactions to survive, but it’s not the only way.
If we are going to create a market environment where micro-transactions are not needed, then publishers need to make up their money elsewhere. The first method, best exemplified by The Witcher 3 and most Nintendo titles is the idea of maintaining value. In the case of The Witcher 3, CD Projekt Red sought to extend the value of Witcher 3 by providing small consistent updates to the game. This served the game in two main ways:
- Provided Free Marketing
- Maintained the Value of the Game
Everytime that a free DLC was added to the game, the press was quick to publish the information on what new additions were added each update. This generated free marketing for The Witcher 3, creating buzz and interest, potentially turning into more sales. On top of this, because the updates were free and well reported, it added consistent value to the game. Where many games a month or two out from release would already start discounting their product, The Witcher 3 did not have to because its perceived value was maintained through its free DLC. If you were a consumer and opted to wait, you gained more value by playing the game later with all the free DLC. This has the same effect as from a consumer standpoint as reducing the price. When free content is added, more value is added, when the price is reduced, the value per dollar increases; both scenarios provide more bang for your buck.
Nintendo does this by never reducing the price of their games except in rare circumstances. Generally, when Nintendo releases a game, it doesn’t go on sale in any meaningful fashion. Since the price never goes down, consumers are forced to purchase the game at the full price if they wish to play it. In this case, Nintendo asserts the value of its games is simply unchanging, so whether you’re buying either early or later, it’s all the same.
In both of these cases, the goal is to create an environment where instead of discounting the product and making less with each sale, it’s to earn the maximum amount set forth.
Is The Price Right?
For a long period of time, $50 remained as the go-to price for any AAA game. Eventually, this would change to $60 and has remained this way ever since. Before the $50 price was established as an industry norm, game prices used to fluctuate depending on various economic factors. If a particular cartridge was expensive, well, you’re going to be paying more for it. If the cartridge is not as expensive? Then the cost decreases. The point is that the price was flexible and changeable based on the product that was being sold. In today’s market, this largely isn’t considered and creates the problems we see today.
Development costs for many AAA games are going only higher and higher, but the price of games have remained stagnant. Loot boxes and micro-transactions are a response to this continuing high cost, but rather than creating predatory mechanics to meet sales demands, companies could just increase the cost of their games. Of course from a business perspective, this isn’t exactly an alluring proposition. By increasing costs, companies will increase their barrier to entry, but with it, they would earn more with each sale. It would be initially hard for consumers to swallow, but much like ripping off a band-aid, the pain will quickly subside if done swiftly if it becomes the new norm.
Increasing price is certainly one option, but there is another, reducing it. While that sounds on the surface counterproductive, it could result in a larger amount of sales to not only make up the cost but to generate more money than if the price was at $60. The issue here lies with perception, if a typical game is $60, and another is $40, consumers will see it as lesser quality and perhaps be not interested in it. It’s an issue that exists purely because of the current status quo of the $60 price tag, but that issue isn’t going to go away by continuing to respect it.
The $60 price tag is restricting, it created a slew of unforeseen practices that are not only anti-consumer but also restricts ideas by forcing developers to include micro-transactions and other ways to generate money. By opening up new and different ways that games can be sold and marketed, the additional revenue that is needed in AAA games can be achieved without resorting to micro-transaction or loot-boxes; allowing more ideas to flourish.