Activision Says Next-Gen Games Will Be Pricier
The publisher's CEO confirms the higher cost of tomorrow's games.
by David Adams
March 16, 2005 - Activision will likely raise retail prices of next-generation console games by $10 to cover higher production costs, Investor's Business Daily recently quoted Activision CEO Robert Kotik as saying (the article is mentioned online at Gamasutra).
Few publishers have commented definitively on next-gen game pricing, though it is widely speculated in the industry that software prices will rise. Activision's increase would put suggested game prices close to $60, a price which, as Kotik implies, reflects the increased cost of producing sophisticated titles with production values closer than ever to Hollywood films.
"We haven't raised prices as an industry in 20 years," Kotick commented. "Look at the movie business as an analogy. You're not getting any more hours of entertainment -- it's the same two hours of a motion picture -- and yet you're spending twice as much as you did 10 years ago."
Of course, software production costs are not the only factor in a game's price. Traditionally console manufacturers have sold hardware below cost, making up for the loss with software licensing fees. Industry speculation has next-generation consoles potentially priced as high as $500, doubtless reflecting the investment companies like Sony and Microsoft are making in designing a cutting-edge box. There's reason to think even a price this high is below actual cost -- thus, higher licensing fees and higher software prices.
When contacted, Activision could not provide further information, apart from confirming Kotick's comments in the Daily. Regardless, consider this one more clue in place as we predict the shape of gaming's future. Stay tuned for more.
Hopefully it will mean less shit games because of the cost involved, but what are you betting there's just as many shit games as ever?