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LordKronos

Games Overpriced?

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I saw the blurb on the Gamedev homepage about the FairPlay campaign. Looking over their site, there are definitely things I don''t agree with. 99% of the cost is development? If they are saying you should only spend $10,000 manufacturing, distributing, and marketing a $1,000,000 game, thats a little absurd if you ask me. But that isn''t the thing I want to debate about the campaign. What I am interested in is their idea of "dont buy any games for a whole week...that will show them". Does that type of thing actually work? Does EA really care that you bought John Madden 3012 next week instead of this week? Does that type of thing concern them at all (assuming enough poeple participate for it to even show up on the radar). To me, I would think all it would say is "Hey, I tried really hard not to buy your game, but you guys got me hooked. When John Madden 3013 comes out, you can have my first born son". If you want to show them and teach them a lesson, then do it the right way...don''t buy their games at all. They say they want reasonable prices for games, but we indies already have reasonable prices. Don''t buy your next game from a mega-publisher. Buy from Kronos Software, or Dexterity, or Positech, or Hamumu, or one of the many other developers that are creating great games at low prices. Of course, people complain that you can''t get good RPGs or FPSs from the indie market, but thats only because nobody buys them. There are would-be indies making great FPS games, but nobody wants to buy them, so they are forced to sign with a publisher to get anywhere. I see some other up & coming FPS developers, and I hope they won''t have to follow in those footsteps. Ron Frazier Kronos Software www.kronos-software.com Miko & Molly - Taking Puzzle Games to A Whole New Dimension

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Talked about this some with one of my friends who works at a studio for one of the major publishers. No, they won''t care one bit. Slumping their sales for a week is a joke.

Video games, to make a broad generalization, are NOT overpriced. This sounds like something little Bobby and Tommy down the street started because they can''t save up the $40 to buy the latest FPS.

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Well, it is ridiculous that the retailers take 50-60% of the price you''re paying.. If you think about it, had the publishers simply sold their games online you''d pay half the retail price.

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quote:
Original post by FenixDown
Well, it is ridiculous that the retailers take 50-60% of the price you''re paying.. If you think about it, had the publishers simply sold their games online you''d pay half the retail price.


I guess you''ve never worked in retail (I''ve been an admin handling monthly supplier pricelists, which meant adjusting markups on merchandise). A 50% markup is the norm (in fact many items are normally much higher, they need to be to allow clothing stores to have 50% off sales every 2 weeks) just to cover the cost of workers (expensive!), rent, utilities, advertising, etc. Selling online does not make it free either. You need to pay not only for servers and bandwidth, but for high tech warehouses where employees go around finding merchandise, wrapping it up for individual order and shipping it out. While this does give a savings of about 20-30%, you lose most/all of that when you factor in the shipping cost.

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Well from what I''ve seen many online sites often offer games 40% cheaper than you can get in stores (for instance when Diablo II came out I bought it for $30 online as opposed to $50 it was in stores), and even with shipping it would still be 30% cheaper. So it would be somewhat cheaper, especially if they''d forego making a box for it which is good only for display in the store.

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Games are not overpriced. Games are too cheap. Look at the price of other kinds of software (Word 2002, etc.). They easily charge you a lot more and nobody complains. Of course the fullprice games would need to be more fun to play than they are now to be worth more money. Although they are becoming better, I still believe they put too much work in the graphics and too less in the gameplay.

The normal kid doesn't buy games, he downloads the cracked fullversions. The money comes from the older guys who already earn money and don't have the time (or want to take the risk) to handle pirate sites.

And it is not working to try to compete with other products by making them cheaper. I don't buy Karl Karlssons Soccer game for 5$ if I've fallen in love with Fifa 2002.

Just my opinion.

--------
My companies website: www.nbsd.de
My download site:



[edited by - Jester101 on October 3, 2002 11:29:28 AM]

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Or we could stop this insanity of games having to be so big they ship on a CD anyway. My latest game is 1.2MB and its good fun with 16 levels , nice graphics...
When you can download the full version from the web (like the RealGames or dexterity games) you get much reduced production costs and thus much cheaper games. hurrah!

http://www.positech.co.uk

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Guest Anonymous Poster
If games weren''t pirated the sales would increase (albeit slightly) and costs could fall (maybe 5 bucks). I wouldn''t expect them to fall right away, I would suspect competition would be introduced somewhere then the overall prices would fall.

Honestly though. Why punish the game publishers/retailers/developers? Start reporting Piracy. If a force of people would go out and report every pirate site, this would do more damage than not buying anything for a week.

Sales are slow until the golden Quarter anyways (right after Thanks Giving sales go up!).

Better yet, wait a year and the game''s price will gome down by half. Another year after that and you can buy it for 10 bucks at Wal-Mart.

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Games are priced according to how they will sell. Just like almost everything else. If people weren''t buying them at the current prices, the prices would come down. And I can assure you that if they would sell for more, they already would be.

As for comparing game prices to the prices of productivity software...it''s not a valid comparison. Two different types of software, with different needs to fill, and different overall markets.

DavidRM
Samu Games

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quote:
Original post by tls284
Video games, to make a broad generalization, are NOT overpriced. This sounds like something little Bobby and Tommy down the street started because they can''t save up the $40 to buy the latest FPS.


Eactly what I thought, but I didn''t want to get into an argument over that with anybody. I don''t really think games are overpriced, for the most part. When I sell a game for $20, I don''t think "The reason I am giving you this price is because I''m NOT ripping you off". I tend to think I can offer that price because I am in a unique position to sell into a market that the large publishers can''t reasonably cater to. I don''t have a large staff or corporate shareholders I have to make millions to support and make happy. Therefore I can settle for a much smaller slice of the pie. Doing so enables me to cut out a lot of the expenses, and thus reduce the price accordingly.

Ron Frazier
Kronos Software
www.kronos-software.com
Miko & Molly - Taking Puzzle Games to A Whole New Dimension

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Well, I''m happy to continue selling games for under £20 each.

If people want to boycott $50 games and see more $20 games on shelves, that sounds good to me. Of course, our $20 games have budgets measured in $thousands, not $millions.


Steve Pavlina
Dexterity Software
www.dexterity.com
"Boredom''s Greatest Enemy"
-------------------------------------------------------
Earn $1000 - $10,000 USD per month in royalties when we publish your next game. See developer.dexterity.com for details.

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This is like those gas boycotts where everybody doesn''t get gas on one day of the week. Well, obviously people are just getting gas the day before or after. What would work is boycotting a single brand of gasoline.

If you want to flex your consumer power, don''t buy games that are too expensive. Wait for the prices to come down. If games are two expensive they won''t move. Obviously if they''re able to move the newest thang at $60 a pop, people are willing to pay that, therefore it is not too expensive. It''s kinda like a truism, but I think there''s a Latin term for this (something like the truth presents itself--I can never remember these things).

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But my bicycle only cost $100! Why does a new car cost $10,000 or more?

Anyway, I do think that Play Fair is making a valid point when it comes to games.
Music and movies cost a lot to get them to the store (production, marketing, etc). They sell between $5-$20. They have lots of hits. They make their money.

Games cost comparatively as much to do the same. They somehow cost between $40-$60 when newly released.

For console games where there is a licensing fee, I can understand them being a little more expensive...
But why can''t they be $20? Or even $10?

Does anyone have stats on the $10 games that do exist? Most stores have that section where the "1000 Best Windows Games Ever" and "game demos you pay for" exist. Anyone know if they make money?

Still, Fair Play makes a good argument. I have seen the breakdown of prices for games in PC Gamer and such, and they always include development costs and piracy.
So basically I am paying for the cost to develop the game, which is fine since someone has to, but I am also paying for the games that people pirate? So who is getting punished there?
And I find it hard to believe that Quake III Arena and Starcraft and such are still making money when it is perfectly possible to crack your own copy IF piracy was really causing that much damage to revenues.

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Guest Anonymous Poster
They are not punishing you by making you pay for piracy losses. They are trying to keep themsleves in business.

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I''ll tell you why games cost $50... It''s my fault. As a professional developer in a well known company, I need to get a paycheck every two weeks. And it''s not just me. There are a couple hundred at my company in the same situation. Take this, plus money for buildings, insurance, etc etc, don''t forget how much corporate profits are taxed by the government, etc etc...

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quote:
Original post by Stoffel
This is like those gas boycotts where everybody doesn''t get gas on one day of the week. Well, obviously people are just getting gas the day before or after. What would work is boycotting a single brand of gasoline.

If you want to flex your consumer power, don''t buy games that are too expensive. Wait for the prices to come down. If games are two expensive they won''t move. Obviously if they''re able to move the newest thang at $60 a pop, people are willing to pay that, therefore it is not too expensive. It''s kinda like a truism, but I think there''s a Latin term for this (something like the truth presents itself--I can never remember these things).


That is what I do. And to think I have been feeling guilty about paying after the prices drop.

I bought Starcraft and Brood Wars for $7 the day of a sale. That was half price of $14 because of the sale. The game came out a long time before clearly, but still.
I bought Black and White for $40 when it was regular price at $50.
I bought AvP for $5 and AvP2 for $10 at Microcenter.
I bought The Moon Project for $5.
In one day I bought Daikatana, Railroad Tycoon 2 for Linux, and Myth 2 for Linxu each for $5-$7.

I bought 3 games a time for these great prices usually.
I like paying $10-$30 for a game. I buy more games that way.

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Guest Anonymous Poster
About piracy and the cost "factored in"... EVERYTHING that you buy has the "piracy/theft" included. When you buy milk at the store it has the .2% (or whatever it is) markup to pay for the ones that are stolen. So if you don''t like paying for somthing that somone else got for free don''t buy anything... And the point about movies you can''t compare them because when they get out to the consumer to buy they have allready made most of their money in the theatre and movie stores and merchentising <sp> so they can be cheap (compare it to a game that has allready been out for a year, it has allready made most of it''s money so it''s price drops). The point is if you are willing to pay $60 for the game it will sell at that. Big companies always sell as high as they can with the most sales so they can get the maximum money. Case in point I used to work at a "discount" place that had their furnature "lower then the rest" It was for the most part cheaper then most of the competition and it was still 100% marked up. Ok enough typing basically what I want to say is this comanies will sell for the most money 80% (I don''t know if this is a real figure it is just an example) of the consumers will pay for the game so if you want prices to drop do two things. First wait till the price drops then buy it eventually the companies will get the point and when a game comes out it will start to sell at the price you want. Or you can stop demanding such high quality games so the producers of the game can save the costs of say 1 hour of cg. So really the only choice is wait for the price to lower to the rate you are willing to pay. Because I for one LOVE the cg :D

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quote:
Original post by GBGames
[SNIP]
Music and movies cost a lot to get them to the store (production, marketing, etc). They sell between $5-$20. They have lots of hits. They make their money.

Games cost comparatively as much to do the same. They somehow cost between $40-$60 when newly released.

For console games where there is a licensing fee, I can understand them being a little more expensive...
But why can''t they be $20? Or even $10?
[SNIP]



Geez, have you guys never worked in the games industry?

Movies are very similar to games as far as dev costs to profits recouped ratios are concerned. The movie industry is very similar to the games industry in almost all respects, including the proportions of costs to sales. Music however is dirt cheap to get to market by comparison to computer games. Do you know how much most games cost to make by comparison to music? Most computer games do not break even. Let me say that again: MOST COMPUTER GAMES DO NOT BREAK EVEN. Ask yourself why. That''s right, the sale price of games is too low in relation to the number of units sold and the development/publishing costs you have to recoup.

And it isn''t a ''licensing fee'' on console games. FrEx Nintendo want all the cash up front in advance for all the GBA carts for your game. So before you start developing your GBA game that''s due out in 6 months'' time, you have to front the cash, pure and simple. Its not like you pay them out of the profits. You''re lucky to ever see any profits. Try guessing how many cartridges you are going to sell next year. Then try having the money so you can pay Nintendo. Then try surviving for a year or more until you might get some of that money back.

You can understand console games being ''a little more expensive''? That''s interesting considering Sony charge developers and publishers ''a lot more expensive''. How can I sell a game for $10 when that doesn''t cover what I had to pay Sony per unit?

Games are only as expensive as they are because the consumer (that''s you and me) demand it. We demand the best graphics, best sound, best gameplay, on continually changing and increasingly difficult to develop for cutting edge technology - who do you think pays for this to happen, and how?

The industry is an ugly place to work, if you''ve ever done so, you''ll know what I''m talking about. Its a pity that more companies don''t make a profit and survive, or we might see better games made by happier people.

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quote:
Original post by Anonymous Poster
And the point about movies you can''t compare them because when they get out to the consumer to buy they have allready made most of their money in the theatre and movie stores and merchentising so they can be cheap (compare it to a game that has allready been out for a year, it has allready made most of it''s money so it''s price drops).



I think I can make the point about movies.
It costs $8 at my local theater to see any movie there, whether new or out for a few weeks.

A new game out for a year is still $30 at least. Not all movies have merchandising arrangements. They still cost $8.

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I totally agree with what tls284 said.

Games are not too expensiv. --- Although, they used to be ... We had to pay about 120.00 dollars (cad) to get X-Wing vs. Tie fighter when it came out and I typically spent $90.00 or so to purchase a new game just a few years ago (around 1995).
Now everything is sold for around $60.00 bucks at future shop!

As for what Michalson said:
"guess you''ve never worked in retail (I''ve been an admin handling monthly supplier pricelists, which meant adjusting markups on merchandise). A 50% markup is the norm (in fact many items are normally much higher..."

That kind of markup is a complete ripoff - and isnt typical with all types sales.

I worked for a computer reseller for years and handled countless price lists from major suppliers (same people stores like future shop buy from)

Computer parts are NOT marked up that much - the most people ever mark electronics type equipment up is around 15%. The same thing seems to go for all ''big ticket'' sorts of items. Any more and noone will buy the damn stuff. (you probobly work selling clothing judging by your opinions about retail ;P).

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quote:
Original post by GBGames
[quote]Original post by Anonymous Poster
And the point about movies you can''t compare them because when they get out to the consumer to buy they have allready made most of their money in the theatre and movie stores and merchentising so they can be cheap (compare it to a game that has allready been out for a year, it has allready made most of it''s money so it''s price drops).



I think I can make the point about movies.
It costs $8 at my local theater to see any movie there, whether new or out for a few weeks.

A new game out for a year is still $30 at least. Not all movies have merchandising arrangements. They still cost $8.


I think the point about movies vs. games is that the potential audience for a movie is hundreds of times bigger than that of a game. Games have a potential audience of millions, low tens of millions if they are lucky. Movies on the other hand have a potential audience of hundreds of millions, if not the low thousands of millions.

Leaving merchandising out of it, because so many ''units'' of movies are ''sold'', they can be cheaper per unit. Because so few units of games are siold, they have to be more expensive.

And GBGames, I''m sorry if my earlier post sonded like arant against what you said, it wasn''t intended to be, it was my frustration at the finacial black holes in the industry, so my apologies if I sounded a bit harsh back there.

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Anyway, on a more positive note,.... :-) I think if we care at all about prices of games, we should do well to support guys like Steve Pavlina at Dexterity. I have absolutely no affiliation with him or his company at all by the way. I just feel that what he and guys like him are doing is going to be the future for high quality innovative gaming, as opposed to the mass-produced clones you get from the ''studio'' system.

Look at what the guys who made Combat Mission achieved, for example. VGA PLanets 4 is another good example.

The mod scene is another area of the industry that always gives me hope. Talented people working together for free, creating quality stuff for people, for free. Don''t want to pay $40 for a game? You know what to do.....

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I think it is kind of hard to understand how an industry can claim that it can justify $50-$60 for games in order to pay its expenses when movies can be so much cheaper, even when put directly to video instead of a stint in theaters.

I know that games pay your salary. Does this mean that movie makers and such are starving in the streets?

Does it mean that I should pay so much for a game? If games were $200 each, would the current "small" market be smaller or no?

I think NeoGeo showed that there can be little to no market for games that are too expensive.
Super NES games were $65 at one point. Final Fantasy 3 (or whatever its real number was) was $75, even after a year if you tried to order it direct from Square.
Somehow someone has to explain how games have become more lucrative now that they sell for $40-$50. Is the market just bigger now? Did it get less costly to produce?
If so, was there a spike in production costs during the SNES era?

Fair Play showed that games can sell for even $10 and still make a profit for everyone. I think it is a bit idealistic because you have to sell over a million copies of the game to do so, but then again, with the price that low, wouldn''t games then be impulse purchases? Buy more than one game a time? I think a million copies sold is reasonable then.

No, I have not worked in the industry. I am just a hobbyist at this point. Still, people need to stop getting mad at Fair Play and simply point out to them exactly why it is not feasible to sell games for less than $50. The arguments that they are refuting don''t make sense, but then again it could be sensationalized and real simplified. Can someone give solid evidence of this?
What is Fair Play not telling us, if you think that games are not too expensive or in fact they are too cheap?

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quote:
Original post by GBGames
I think it is kind of hard to understand how an industry can claim that it can justify $50-$60 for games in order to pay its expenses when movies can be so much cheaper, even when put directly to video instead of a stint in theaters.



Movies sell in far greater quantities, therefore price is cheaper. Movies go straight to video when there is no hope of distribution in cinemas, so they go for video to try to recoup something, but they know full well they won''t get their money back. Likewise, games sell in far fewer quantities, therefore price is higher. Games go straight to bargain/discount prices when they are so bad that retail will not stock them at full price because they know they won''t sell any, and/or when publishers don''t stump up the placement cash to purchase shelf space in retail outlets because they know they won''t recoup their money.

quote:

I know that games pay your salary. Does this mean that movie makers and such are starving in the streets?



You''d be surprised. A friend of mine who is a top-paid & highly sought after film editor earned just £6,000 in the last 18 months. Most scripts don''t get bought or optioned, and of the ones bought, most don''t get made. Of the ones made, most don''t break even. The movie industry, like the games industry, relies on a few hit products to generate enough profits to pay for the others that didn''t. Would I encourage my sons or daughters to go into either the movie industry or the games industry? NO. Both are highly unstable industries. Where else do you get laid off once or twice a year?


quote:

Does it mean that I should pay so much for a game? If games were $200 each, would the current "small" market be smaller or no?



The problem is not that the market is small, but that it is fragmented. If I make a film I can distribute it through cinemas, on video, on dvd, on television... and it will probably get repeat revenue for years to come on tv.

A game on the other hand will only sell to a niche market or a series of niche markets if I spend money (a lot of money) to convert it from PC to PS2, or to develop for both platforms from the outset (also very expensive - there are no cheap options in game development) and has a retail shelf life of only 3 to 4 months (only the top few percent of all games stay on the shelves for longer than this). You just have to look at the statistics to see this. You''ll have to pay to look at the statistics though, they are not freely available. I have worked in publishing and development and have had access to the figures. Most game sales are in the first 6 to 8 weeks, and they tail off pretty dramatically after that. So you spend $1,000,000 making a pretty cheap and average-looking game for PC and Xbox that wasn''t based on any license (so at least you or your publisher didn''t have to shell out a million or two for the privilege of naming and branding your game), and your publisher is pretty bad so only spends $100,000 on advertising and promotion, so your game has only a few magazine adverts, the PR people in the reviews don''t get taken out to lunch so they don''t give you a very good review (you think I''m joking?) and you don''t buy much shelf space in the retailers and you definitely don''t buy the prestigious window shelves or shelves near the front of the shop or the promotional shelves. So how many units are you going to sell? Probably only between 10,000 and 30,000. How much is $40 times 10,000? This is without your retailer deciding to drop the price of your game after only three weeks of release, because its not selling fast enough and they want to clear the shelf space to sell for the next game coming along so they can pocket more money... but you''ll notice that the retailers are not getting so rich either, as anyone working in that industry will tell you, its the publishers who call the shots, they take the risks, they pocket the cash.

As developer, after your publishers pay off the retail costs, shipping costs, warehouse costs, distribution costs, manufacturing costs, etc etc etc you received approx $7 per unit towards paying off the development costs that they advanced you so you could make the game for them. If you are lucky, you made enough of those $7 to encourage the publisher to consider giving you another contract.

quote:

I think NeoGeo showed that there can be little to no market for games that are too expensive.
Super NES games were $65 at one point. Final Fantasy 3 (or whatever its real number was) was $75, even after a year if you tried to order it direct from Square.
Somehow someone has to explain how games have become more lucrative now that they sell for $40-$50. Is the market just bigger now? Did it get less costly to produce?
If so, was there a spike in production costs during the SNES era?



Yes the market has bigger niches now. Last time I looked, there were enough PS2s sold to justify making games for that console. But for quite a while there were only a few million Xbox sold, so publishers and developers weren''t seeing any money there. Luckily they stuck with it as it is relatively easy to port from PC to Xbox, and eventually sales grew and Xbox looks lucrative.

What will really bake your noodle though, is that a long time before the release of PS2, publishers stopped commissioning games for PS1. This never made sense to me, as just before PS2 came out the PS1 market was the biggest it had ever been, there were tens of millions of consoles to sell to, and the games were mostly going to be compatible with PS2. But publishers didn''t want to know, they decided that people wouldn''t want to buy PS1 games any more, so they stopped paying developers to make them, with a (very) few honourable exceptions.

quote:

Fair Play showed that games can sell for even $10 and still make a profit for everyone. I think it is a bit idealistic because you have to sell over a million copies of the game to do so, but then again, with the price that low, wouldn''t games then be impulse purchases? Buy more than one game a time? I think a million copies sold is reasonable then.



Can you list me 20 games that have sold over a million copies? Even at $10? Are there any retailers that would stock a $10 price point when there are hundreds of $40 price point games paying more money to get on the shelves?

It would be great if this were true, but the public associate price with value. When you walk into a shop do you view the $10 games and the $40 games the same? Retail conditions us to see cheaper games as yesterdays games, and to expect the new releases to be the higher prices.

quote:

No, I have not worked in the industry. I am just a hobbyist at this point. Still, people need to stop getting mad at Fair Play and simply point out to them exactly why it is not feasible to sell games for less than $50. The arguments that they are refuting don''t make sense, but then again it could be sensationalized and real simplified. Can someone give solid evidence of this?
What is Fair Play not telling us, if you think that games are not too expensive or in fact they are too cheap?



I don''t think it''s unfeasible to sell games for less than $50, but we have to be clear about how we will do this. $10 games sold on the internet? Yes, because you can cut a lot of publisher and advertiser and distributor costs. $10 games in the shops? No, because it won''t cover your costs. If games sold at $10, publishers and developers would have to scale down their production costs by 80%. So that would mean a lot less game, a lot less sales, a lot less people buying consoles, a smaller market.

If publishers thought they could make more money by selling more games at $10 rather than less games at $40, believe me they would have already done so. But there are good financial reasons why budget publisher brands like Sold Out and White Label etc are the ones selling old games at low prices, while the big boys sell new games at high prices.

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First off, going to the movies for the average joe costs more then $8. It''s pretty common knowledge that Movie Theatres make their money off $15 purchases of food. That''s close to $25 to see a movie rather then $8. Not to mention you get to see the movie for 2hours. It''s a one time deal. Some people go twice.

Second to own a movie usually 4-8 months after release costs about $20. Maybe $20-$30 on DVD. A video game 6 months old is usually down to $20 or less.

Third, most movies have a much larger audience then most games. Halo made it big when it sold over 1 million copies! That''s about 25 Million in revenues for the publisher. (After 50% is taken by retail stores) In contrast (this information is taken straight from Yahoo!''s box office list) Sweet Home Alabama brought in $35,648,740 in one weekend. This dosen''t include what they will continue to make, or video/dvd sales etc.

Finally, if anyone wants to pay $4 an hour to play video games for the first 6 months after release, talk to microsoft.

Michael Sikora
www.GuardianLightStudios.com

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