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Game For a Price War?

"I think we can sell a lot at a higher price point," says Brian Farrell, CEO of THQ (THQI), which plans to launch two Xbox 360 titles in coming months. "It's consistent with what we've seen in general in the past."

But Microsoft isn't taking that route. Although the company is charging $60 for a special edition of its Perfect Dark Zero game, it is charging $50 for the regular edition of the title and for its other two launch titles, Project Gotham Racing and Kameo: Elements of Power.

Microsoft wanted to reassure consumers that they'd be able to get top-of-the-line titles for the next generation at the same price they have paid for current generation games, says David Reid, the company's director of platform marketing for the Xbox.

"Our perspective on this is clear," Reid says. "We believe we can have a good business model in parity with what we have today (on pricing)."

Microsoft's decision could weigh heavily on the ability of the third-party publishers to maintain their price hikes on next generation titles. According to IGN, which runs a series of Web sites catering to gamers, Microsoft's Perfect Dark Zero was the most anticipated title for the Xbox 360, and all three of its games ranked in the top seven.

There have been past examples of publishers pricing their titles higher than those from the game-system makers, at launch, says Joe Spiegel, a hedge fund manager at Dalek Capital.

Typically, that strategy of pricing games higher than those of the system manufacturer "didn't end well for the third-party guys," says Spiegel, who is long Take-Two (TTWO - Get Report), Nintendo and, through put options, is effectively short Activision.

But others believe the move may pay off -- at least in the short term. IGN's survey aside, the titles that are commanding the premium prices on the Xbox 360 are likely to be games such as Activision's Call of Duty 2 or EA's Need For Speed: Most Wanted, some analysts say.

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THQI $0.31 0.00%
ATVI $22.80 0.00%
MSFT $41.62 0.00%
SNE $30.01 0.00%
TTWO $24.72 0.00%


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