As we head towards next-gen, more and more details about the Xbox Series X and PlayStation 5 are coming to light. We have the full specs and designs of both consoles, and we'll have the full roadmap of Xbox exclusives, hopefully, in late July with the next Xbox event.
Another less palatable revelation came today via 2K, who confirmed it will sell the next-gen versions of its games for $70. I fully expect to see PC games see a bump in price as well shortly, as game worlds and their complexity balloon to accommodate more powerful hardware, across an incrementally more competitive landscape. The bump also accommodates market changes, inflation, and other financial landscape realities.
NPD games industry analyst Mat Piscatella posited that the bump probably should've happened in 2013, noting that initially, game developers were nervous about the low prices being offered by mobile games. It seems though that in reality, both sections of the market overlap, rather than cannibalize each other.
The shift to $69.99 should have taken place in 2013 imo, but folks thought Mobile was a threat to the console business (among a couple other drivers, but in retrospect, lol). Instead, we got collector's, silver and gold editions that elevated above $59.99 anyways.— Mat Piscatella (@MatPiscatella) July 2, 2020
Still, I feel as though the price hike may be a tough sell, particularly with a looming recession as much of the world struggles with the pandemic fallout. In that scenario, the winner could ultimately be Xbox Game Pass, PlayStation Now, and other similar subscription services.
Why is this be happening?
The first developer to effectively break cover on the idea of selling next-gen games at a higher price is 2K, with their upcoming title NBA 2K21. Current gen versions of the game will remain at $60, but if you want a version that will work on Xbox Series X or PlayStation 5, you'll have to buy a $70 version. I thoroughly expect we'll see other developers and publishers follow suit in the coming weeks and months ahead.
Sports games, in general, have a fair amount of overheads, licensing deals have to be made, and so on, but they are also wildly popular. Seemingly popular enough that they avoid backlash for their borderline pay-to-win mechanics that would bury a shooter or RPG. The microtransactions in games like FIFA and Madden are a massive driver of revenue for companies like EA and 2K. Still, it's also true that developing these games certainly isn't getting any cheaper, particularly as the industry gets more competitive, with salaries to match.
At least, this is the mentality publishers have. You could argue big publishers pay their execs far, far too much. Activision CEO Bobby Kotick was recently in the spotlight, accused by his own shareholders of earning too much. Kotick took home $30 million in 2019, which was flanked by 800 arguably needless layoffs at Blizzard, including many roles the firm has since re-hired for. An investment group filed a motion with the US government over the criticism, which included the below quote via Gamespot.
"While equity grants that exceed the total pay of peer companies would be objectionable in most circumstances, it is of special concern in this case because Activision Blizzard employees face job insecurity following layoffs of 800 employees in 2019, and typically earn less than one-third of 1% of the CEO's earnings, with some employees, such as junior developers, making less than $40,000 a year while living in high-cost areas such as southern California."
Whether or not the price of games going up is justified is up for debate, and I certainly don't have the full business knowledge to offer a definitive answer. Whichever way you see it, though, surely Xbox Game Pass, PlayStation Now, and free-to-play games are likely going to grow as a result.
Subscriptions and free to play will grow
Xbox Game Pass is already lauded for its value, with a Netflix-style subscription that offers all Xbox Game Studios title upfront as part of the relatively cheap $9.99 base monthly payment. Also, Microsoft adds a rotation of titles from the smallest indies to the biggest AAA publishers, keeping the service feeling vibrant and exciting. Sony has a competing product called PlayStation Now, but the firm hasn't offered the same breadth of content that Microsoft has with its own service.
I'm in a lucky position to get games as part of my job, but as a kid, I was lucky to get more than a couple of new games per year. Particularly in the case of Nintendo titles, which were often anywhere up to £80 or more in the UK, depending on supply. Xbox Game Pass would have been a godsend as a young 'un (as we say in my town), and those facing economic hardships either as a result of COVID-19 or otherwise will naturally gain heaps of value from services like Xbox Game Pass.
Xbox Game Studios will likely have about 4-5 games the first year of Next Generation. (4x70=$280)— colteastwood (@Colteastwood) July 2, 2020
One year of Xbox Game Pass is $120. pic.twitter.com/v0DOyCTP1V
Beyond Game Pass, we've already seen how free to play can turn a game into a goldmine in the form of Fortnite and countless others. If games are going to $70 across the board, and not just for sports titles that, frankly, seem to have a forgiving fanbase, I suspect more free to play standalone components like Call of Duty's Warzone mode to become more commonplace.
We've even heard some rumors that Halo Infinite itself may ship in a two-SKU format, with a broad single-player campaign linked to a standalone free to play multiplayer client. However, we haven't been able to lock down physical verification of that rumor thus far. Would you be surprised if it happened, though? At this point, I wouldn't be.
Next-gen will evolve the landscape even more
With the switch to the Xbox One and PlayStation 4, we saw digital game sales and free to play become increasingly commonplace in an industry going through rapid changes. Streaming services like Project xCloud and Google Stadia will undoubtedly have a role to play, too, as Microsoft aims to bring Xbox console-quality gaming to devices that traditionally haven't been powerful enough, like phones, smart TVs, and lower-end PCs. It's going to be a wild ride, and I'm here for it.
What do you think about the possibility of games increasing by $10 across the board when next-gen rolls around? Let us know, down below.
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