Whenever we as a gaming culture begin considering new hardware, one of the first things we wonder about is price: how big of a hole is this fancy new console going to burn in our wallets? Of course, what’s even more important than the price of a new console is the price of its software. Consoles are an investment: to get your money’s worth, you have to constantly sink money in. At the current average price of $59.99 (U.S.) per new game, it’s not at all difficult to spend more than the price of a console on buying games in an extremely short amount of time.
According to Ubisoft CEO Yves Guillemot, this won’t be a worry (at least initially) with the release of the next generation of consoles. Regardless of what Microsoft and Sony have in store for us with their next hardware, we won’t be seeing a markup (or, at most, an extremely small one), on the games themselves. If that seems a little too good to be true, Guillemot gave Eurogamer the explanation as to why he believes this will be the case:
“What we see is that the end of a cycle is always a time when people are creating bigger and bigger games to differentiate themselves from the competition, and with a new console coming you can really leverage the capacity of the hardware and all the new features that come with the console to bring a new experience to your consumer, so you need to invest less on the size of those games to still give a great experience. So at the beginning of that generation we won’t have an increase—or a very small increase—of the cost of games that will be launched.”
Basically, Guillemot is saying that at the end of a console cycle, developers are extremely familiar with the hardware they’re working with, and can push it to its limits. When they get their hands on a new console, they can get the same results while pushing the hardware quite a bit less, since the technology is that much better. This means that there won’t be any significant increase in development costs, and, as a result, no markup in the cost for the consumer.
It’s not all good news, though. Guillemot also stated that he expects the next generation to be a “very viable and profitable generation,” seeing a similar profit increase as the $10 markup we saw at the beginning of the current generation gave. Without a higher software price, how can a profit increase be possible? Simple: through a higher ARPU. The average revenue per user is, in Guillemot’s mind, going to be much greater this time around, due to the more widespread “integration of social benefits and item model.” What does that mean? In short, it’s micro-transactions. Guillemot expects developers to rely more heavily on downloadable content in the future, to increase the ARPU the next console generation will see, and raise developer profits.
The obvious danger here is that, in order to ensure as many people as possible purchase DLC, developers will make it extremely difficult to pass on, maybe by including some key piece of the game’s story or ending in a DLC chapter. I like the idea that I won’t be paying any more in-store for my game, but I don’t want to have to pay $5 or $10 to unlock part of its story. I’m all for the inclusion of DLC as a method of keeping people playing the game, but not as a means of doling out missing parts of the game. There are already warning signs that this indeed may be the case, but it would seriously make me reconsidering buying a game as soon as it is released. If I’m going to have to pay extra money to see the entire game, then I’d rather wait a few months for it to come down in price before I dive in. This business method could seriously hurt the early sales of games, and give publishers a false idea of what people do and don’t want to play. The industry better be extremely careful moving forward in this manner: it could be a serious blow.