Game For a Price War?
What's a video game worth?
For the past 10 years, the answer to that question has been fairly simple. Except for special cases, top-of-the-line games went for about $50.
(TheStreet.com this week also looked at how Microsoft's rivals will cope with the ballyhooed rollout; how far Microsoft will make it into consumers' living rooms; and what all the new game machines mean for investors.)Depending on the publisher, games for the Xbox 360 are being offered at two different price points, one of which is set at about $60, or $10 more than the typical price for current generation games. At the same time, prices for current generation games appear to be starting to slip. With development costs rising as much as 100% on next-generation games, publishers have a strong reason to try to push up prices, says Van Baker, an analyst with industry research firm Gartner. But the $50 price point seems to be a psychological barrier with consumers that publishers may have a tough time overcoming, he says. "It's going to be a challenge for the market to sort itself out," he says. Where things end up when pricing starts to settle down again could go a long way toward determining how profitable the game publishers will be both in the near and longer term. And it also could help determine which publishers and developers will be able to stay in the game. But right now, the market seems to be unsettled on prices:
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV