iTunes, Game Prices, and Publisher Arrogance

(This is another edition of “</RANT>,” a weekly opinion piece column on GameFront. Check back every week for more).

It’s common enough knowledge that indie games struggle to get press, attention and sales when compared to the big retail games. For every Castle Crashers and Limbo, there are dozens of other cool, interesting and unique titles that get swallowed by obscurity and overshadowed by the likes of Halo, Call of Duty and Uncharted. Of course, many indie games are garbage, but there are some good ones out there that just won’t get the attention they deserve.

With the irresistible rise of mobile gaming, however, the tables have started to turn. Major publishers are faced with a new market in which they are gaining very little traction, and for all their marketing dollars, they are routinely humiliated by the exact type of people they’ve been stepping on for years — the small fry independent developers who work in tiny teams, have few resources, yet now find themselves raking in tons of cash while their significantly larger counterparts tread water.

The simple fact is this — the mobile gaming market is vastly different from the videogame retail market. It’s a totally fresh ball game, but major publishers like Electronic Arts and Sega are trying to play by old rules. In order to see the problem, you have to understand the mindset of the mobile gamer, how they’ve been conditioned, and what they expect from their games. This mindset is something that established publishers just don’t get, and this is why iTunes is the domain of Chillingo, Halfbrick and Popcap.

It’s really not rocket science, either. In fact, it’s so obvious that anybody who doesn’t get it’s an idiot — mobile games are cheap. That is what makes them so appealing, and what makes it so easy for consumers to purchase them without a second thought. iTunes and similar app stores are the promised land for impulse buyers. I’ve fallen prey to this many a time, dropping a buck or two for any game that catches my eye. It’s incredibly low risk, with customers more than happy to take a chance on a game since it costs mere chump change. As I write this, the iPhone gaming top ten has NINE games in it that cost $0.99. The one anomaly is Pictureka!, which is still remarkably cheap at $1.99. It’s no coincidence that the hottest selling games tend to cost less than a dollar. Many of the games in the chart are pretty good, but it’s the cost that got them where they are more than anything else.

Major publishers can’t handle this. Just look at Konami, trying to sell Metal Gear Solid Touch for $7.99, or Sega thinking it can shift a billion copies of Sonic the Hedgehog 2 for $5.99. Major publishers bring with them a certain arrogance, a belief that they deserve to charge a premium for their games, simply through virtue of their pedigree. Not on iTunes. Many iPhone gamers aren’t regular gamers. Names like EA, Activision and Sega mean very little to them, if they mean anything at all. Square Enix can get away with selling Final Fantasy ports to hardcore gamers for any amount of money. Selling Final Fantasy for $8.99 to the iPhone crowd, however, is nothing but a display of ego, and it’s not really working. Mobile gamers don’t give the first shit how big a name you are in the games industry. This is a different world, and Square Enix is nothing here.

Publishers are starting to understand the situation, but you can tell how much they hate it. Why do you think EA bought Chillingo? Because Chillingo understands how to make money from iTunes. SEGA recently had a permanent price drop on most of its titles, which demonstrates that the company is starting to “get” it. However, the price drops still aren’t good enough. An inferior Sonic 2 port remains too much at $4.99, while Sonic the Hedgehog 4 clings onto a premium rate at $6.99, and it’s suffering for that. Consumers don’t want to spend more than a few dollars on most of their games. You may think that, as a big corporation, you deserve to charge what you want, but this isn’t your industry, and you’re only punishing yourself.

Mobile gaming is the great leveler. It’s brought international corporations down to their knees so that they have to meet independent developers eye-to-eye. Small studios own this market. They have dictated the prices, and they’re not the kind of prices that your traditional game producer likes. While they rigidly attempt to stick to their old way of business, new blood is reigning supreme. Licensed games and established franchises are failing to compete with Angry Birds, Fruit Ninja, Bejeweled and Doodle Jump. Simple, innovative and fun games that are, above all things, cheap.

Publishers are being humiliated by their indie brethren, and rather than fight it, they could stand to learn a few things. Perhaps if they applied the iTunes model to their wider ranging business practices, we’d see a far healthier games industry overall. Just look at the shock success of Deadly Premonition. A $20 game that was reduced even further on Amazon, and went on to become a chart breaker. Sure, the viral marketing and word-of-mouth helped, but the MSRP was a big deciding factor.

Price is important, and price needs to be set according to demand. Less established IP should be released at a budget price, like Namco Bandai did with Majin and the Forsaken Kingdom. If more brand new games were launched at $40, maybe they’d sell a lot better and we wouldn’t be stuck with publishers who only want to promote major franchises. This doesn’t happen though, because of this aforementioned arrogance. It’s perfectly possible for publishers to sell games for cheaper, but they simply cannot comprehend doing it. That kind of attitude is only harming smaller games that need all the help they can get.

Mobile gaming is a brave new frontier, possibly representative of the future of gaming. Times change, and those who don’t evolve will die. Major publishers risk falling to natural selection if they can’t get their minds out of the past.

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3 Comments on iTunes, Game Prices, and Publisher Arrogance

corpse

On December 9, 2010 at 3:21 am

hey Jim this rant feature is pretty cool this topic is kinda lame but I hope to see some very interesting topics soon. Keep looking for something, you might see another one of my big essay posts I like putting up. But phone games is what gets these independent companies going it would be nice to see more on the consoles, a lot of these games are simple and fun. Keep the articles coming I’m sure the Fans of this site and new comers will enjoy more of these articles.

simon

On December 9, 2010 at 12:50 pm

But how long is the .99 price tag sustainable for?
At some point there’s going to be a 100,000 $.99 games covering every genre of guick and casual gameplay, and the minimal production value is going to keep getting more expensive while the return will keep shrinking as it becomes harder and harder to not become lost in the shuffle.

It’s going to rapidly escalate to the point where the true indies can’t afford the price in developing a game. The need to go viral just to make a sustainable title is going to be the death of many indie studios. At which point the the mergers of the indie studios will start. Just like it did for casual PC games and we wound up with Popcap and Bigfish etc.. and then again with Flash games giving us Armor, newsgrounds etc…

The big studios know this and are just biding their time, and this time I promise they’re going to be the ones snapping up indies to make the mobile developer studios in the next 4-5 years.

The big studios, also know that you can’t ever Increase your price and are obviously weary of doing so, because 2000 sales at 5.99 is way better than 5000 sales at .99, and as the market gets more and more crowded the odds of getting noticed is going to shrink drastically and yet the price of development is gonna go up.

So, don’t think they’re arrogant, or stupid just because they won’t run the race to the bottom.

Duke Nukem

On February 4, 2011 at 3:16 pm

Can’t agree more.

Hi Jim.

Still hating Kane and Lynch 2?
:D