Videogame prices set to rise on next-gen consoles

Software for next-generation home consoles looks set to be more expensive than current titles, with comments from leading publishers such as Take Two, Activision and THQ all pointing to premium price points for AAA next-gen titles.

Speaking at the Banc of America Securities Consumer Conference yesterday, representatives of all three companies indicated that higher prices for software are inevitable on the next-gen platforms - the first of which, Xbox 2, will launch later this year.

Price points of $59.99 or higher were mooted for AAA games on the new consoles at launch - but other titles may be priced less expensively, with THQ acknowledging that its children's titles may not be able to sustain a $49.99 or higher price point, while Take Two simply said that its next-gen games would be priced higher "where appropriate".

This strategy is likely to see a two-tier structure emerging for game pricing, where premium titles command a premium price point of $59.99 or more, while less important games are sold for between $39.99 and $49.99 - much closer to the current price point.

While the cost of developing next generation games will undoubtedly be higher than current development costs, the proposed price hike is less to do with development, and more down to a desire among publishers to expand their margins - with the hardware transition apparently seen as a perfect chance to accomplish this by bumping up software prices.

Leading US retailer Electronics Boutique, which also presented at this week's conference, also acknowledged that prices were set to rise in the coming year - but like the publishers themselves, made it clear that the market would only sustain premium prices on certain products.