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Retail

5th Cell criticises "broken" retail model

Mon 28 Nov 2011 9:49am GMT / 4:49am EST / 1:49am PST
RetailDevelopment

CEO Jeremiah Slackza calls for more pricing options for games

The creative director of Scribblenauts dev 5th Cell has called the traditional game retail model "broken."

In an interview with Game Informer, Jeremiah Slaczka explained that rising budgets have exposed the inherent weaknesses in charging $60 for every game.

"Before the model was tolerable, because the cost was reasonable enough to allow mediocre selling games to make money," he said.

"Now it's just insane. If you aren't going to be a mega hit at $60, you might as well give up before you even try, because it's tens of millions down the hole."

Slackza cited Homefront as an example of an "okay FPS" that failed to meet THQ's sales expectations due to the abundance of superior alternatives available at the same price.

"As a consumer, why would I want to play an okay FPS when I can play a bunch of great FPS titles for the same price? And that's what the consumers did."

"But what if you could rent Homefront for $4.99 for 24 hours from your console? What if Homefront was only $30 dollars upfront for the single player and if you liked it you could buy the multiplayer for an additional $30?

"All of the sudden it's not a binary purchase option anymore."

5th Cell released Scribblenauts Remix for the iPad in October. It enjoyed a brief spell at number one in the App Store download charts.

Slackza estimates that, to date, the Scribblenauts franchise has generated around $100 million in revenue.

7 Comments

David Radd
Senior Editor

360 77 0.2
Hitting the nail on the head. He even suggested the multiplayer sale model that I've mentioned before!

Posted:2 years ago

#1

Oliver Jones
Software Developer

21 21 1.0
Even at variable (or lower) price points trying to assail the incumbents in a particular genre is a huge up hill battle. Just look at titles like Section 8 and Blacklight: Tango Down. They are not exactly lighting up the charts. Though maybe their mediocre performance was just because they were mediocre FPS games?

But yes, the digital download landscape for games is much more attractive to smaller development shops who don't have the budget to go for a retail release. But then personally I don't think brinks and mortar games retail is going to survive the next console generation. It is already digital download only for PC games. Consoles will follow shortly. And and behooves the console makers to open up their marketplace to a variety of pricing and payment models. In particular Microsoft's fixed pricing tiers for XBLA titles and DLC is looking more and more archaic each passing day.

Posted:2 years ago

#2

Paul Smith
Dev

195 155 0.8
Homefront sold rather well from what I remember.

Posted:2 years ago

#3

Greg Wilcox
Creator, Destroy All Fanboys!

1,993 902 0.5
The industry HAS to figure out how to keep retail alive for those who have shitty online connections but still have money to spend on product. Yeah, yeah, blah-blah, digital this, digital that - but how much money are they REALLY losing hand over fist simply because they're as a whole, ignoring a nicely sized chunk of people who'd probably be as loyal if their needs were being served?

Considering how many folks still can't get all those lovely jewels dangling in front of them on a regular basis simply because they don't have access to good connections and the FACT that security is still a major issue for many, I'm truly annoyed that there isn't already a split market where single player/couch co-op disc games aren't sold at lower price points with online MP modes made available for some additional fee.

Cut out the expensive limited edition junk (let those who want it buy it direct from the publisher's own online store), condense packing to a smaller uniform standard across the board, cut prices accordingly and see what happens. Why does it cost so much to make some games that pretty much do the same damn thing year after year. Yearly franchise games and shooters have turned into the new Madden (and that's not a good thing unless you like to brag about sales over originality)...

Posted:2 years ago

#4

Rod Oracheski
Editor

58 23 0.4
These arguments are kind of undercut by the reality that they don't really need to charge $60 for every game, as in there's no certification requirement that compels it. If you know a game's not going to be a mega-hit at $60, why not release it at $40 like others have?

Posted:2 years ago

#5

Tynan Muddle
Writer

5 2 0.4
Exactly what Rod Oracheski said.

Publishers like Ubisoft have been successful releasing budget-priced titles. If we're going to start talking about AAA titles, games like Call of Duty - which probably don't cost THAT much to make every year compared to the early days when all the code/models/etc was brand new - would probably sell even more if priced at the budget level.

Rather than pulling out of retail - which would be a dumbarse move (seriously - no retailer will sell game consoles at their low margins without having that backbone of software sales to prop up some profit), they should create business models that support retail.

Another strategy would be for publishers to stop buying smaller studios and allowing creativity back into the gaming industry.

Posted:2 years ago

#6

Grant Smythe
Editor in Chief / Owner OXCGN.com

10 0 0.0
Digital is not the be-all-and end-all of game delivery. As rightly pointed out by Greg Wilcox above, a huge 40+% of gamers do not have a sustainable internet connection, and many do not even have a connection, period.

They bought a console to buy and play disc based games at their lieuser in their home without the need to be 'connected' all the time as they (those 40% of tha gaming market) don't want to be connected, and many couldn't care less about the multiplayer aspects of games.

Then there's the gamers who, shock horror, buy a game for the story and the ensuing gameplay promised by that story which has been publicized so much in media which ultimately has 'sold the game' to the gamer.

They want the games story to unfold before them with them at the controls as the protagonist, and to 'experience' the game as part of that story. Not as part of some un-named group of infantile players hell-bent of fragging them at the earliest moment online.

As also pointed out, there's a substantial number of gamers who enjoy gaming with 'real property', the disc based game. Something they 'own' outright, can hold in their hand, exchange, sell or throw away for that matter, but something they can see and hold in their hands.

Sure, we have a generation of gamers that live totally in the digital realm, where you'd be hard pressed to actually find more than say 10 actual discs in their home. Everything is digital for them, and they could care less if that property was erased 2 weeks after purchase, as they raely go back and replay it . . . they just clear their HDD's and move on to the next thing.

But, they are the minority, yet get treated like the majority. With publishers pushing developers to build games for the new digital market, which in fact is the smaller market, not the bigger market.

Pre-sales of games show that disc based games are the money spinners, gamers love the stories laid out in front of them about the games, which get them excited about their purchase. They want to hold, talk about, swap and enjoy the games. Just like they always have done for decades.

Publshers need to look at the market more closely, not follow the whims of a generation that really has no loyalty whatsoever about brand or title, and simply follows the rest of the gerbals off the cliff when it comes to choices. Look at any shop front, the used games and new game sales tell the story, they go out the store at a huge rate, but it's the multiplayer aspects and DLC that are have the publishers all afluster trying to out do each other and capture that elusive extra $$$.

We need retail based games, we also need a better pricing structure, and the real return to AA and AAA price points for games. Now, all games are sold at the AAA rate (well, almost all), rather than a proper tiered level. It worked well before, it will work now, IF the publishers actually have the gonads to give it a go.

They'd be surprised at the rate of sales if their next medium rate game, albeit a great game, but not quite AAA materila, was sold at the $US40 mark, or even slightly cheaper. The games would sell more volumn, and also build notoriety, and the retailer would be moving product. The shareholders would see proper units moved figures in their reports, and the publishers would be making a profit.

There are several retailers here in AUstralia that sell AAA titles a good 1/4 less than the normal RRP, and they sell out fast. They have volumn sales, and make a profit. Rather than the same game in the next store selling at the normal RRP, which sits on the shelf gathering dust. If the publishers gave the retailers the sales incentives to reduce the prices, then retails would drop their prices.

Digital, while excellent way of distributing goods, is not the next paperless society. We'll still have (read need) retail games, just like we now still need the printed material that has grown since the advent of digital distribution of books, news and the written form. Digital is good, but it's not the Holy Grail of publishing . . .

Posted:2 years ago

#7

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