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Pachter: Activision MW2 price "is a test" News
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Robert Purchese
Analyst Michael Pachter reckons Activision's controversial decision to raise the price of Modern Warfare 2 has nothing to do with a weak Great British Pound.
"The price increase is a business decision," he told Eurogamer, noting that the pound is worth more today than when COD5 launched last year.
"Activision knows it has a 'hot' game, knows that the market will pay an additional 10 per cent, and has decided to increase price accordingly."
Pachter thinks the question of whether this is fair is "a difficult one" to answer. Games, he explained, are cheaper to buy today but contain better graphics, gameplay and online functionality. And the latter service, while free to users, costs Activision to provide - although Xbox 360 owners must pay Microsoft for the privilege.
"My guess is that this is a one-time test for Activision, and that they will re-think the strategy after seeing if it angers consumers," offered Pachter. "If there is no consumer backlash, I think we may see higher pricing on other games, regardless of the GBP/USD translation rate."
And, he added: "The repercussions could be significant and lasting. If Activision is successful, we may see increases for other 'hot' games in the future. We see tiered pricing to the downside for more casual games, so why not tiered pricing to the upside for hot games?"
Activision, in case you haven't noticed, raised the suggested retail price of Call of Duty: Modern Warfare 2 to £54.99. Retailers may only take this figure as guidance, but the bump will be felt nonetheless.
And it's not just MW2; Pachter suggested keeping in mind the price of the Guitar Hero franchise, which has generally gone up. Band Hero, he adds, will be more expensive than GH World Tour, and Tony Hawk Ride and DJ Hero will cost a considerable £107.99. And on all platforms; no discount for PS2 and Wii any more.
What does Activision have to say? "I'm afraid we don't comment on our product pricing strategies," a spokesperson told us this morning.
"This is the year that Activision raises prices selectively for several games," concludes Pachter, "and the US increases don't have anything to do with foreign currency translation."
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Poster
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+8
I think we'd figured that one out ourselves good sir. I think we're all equally smart enough to figure that one out here at EG, what with the pound not actually being weak and everyone knowing full well we'll probably put up with it. It's a shame, and a tad cheeky, but thankfully most shops aren't going along with this.
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+9
If this works, and I think it probably will considering how anticipated this game is, watch other publishers jump on the bandwagon. Before we know it it's going to be like the early 90s again. I'm sure you all remember £70 for SF2:T.
I'm sure there'll be discounts at Argos, Amazon etc, bringing it down to the price of a normal game, but that's not going to bother Activision as it'll be the retailer taking the profit hit.
Edited 1 times,
most recently on 22/07/09 @ 12:14
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+8
@ Xerx3s
That doesn't mean anything; if Activision increased the RRP, then it must have increased the cost they sell to the retailiers too. Hence, that price is a result of the Retailer getting a hit on their cut, and still counts as a full price sale for all intents and purposes as far as Activision (and Chart trackers) are concerned. |
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+20
I table the motion that Michael Pachter be renamed to "Captain Obvious". Anyone care to second?
On-topic, I'll be buying MW2 on release, but I'll be making sure I find the cheapest price around. Although that won't actually make a difference to Activision - they'll still receive the same percentage and the cut will be solely affecting the retailers' margins. |
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+24
Do any of you realise that buying for £45 from Amazon or £36 from Play isn't saying anything to Activision. They'll still be paying the raised rate for their stock, just not taking the full margin. Whether you buy it for £36 or £55 Activision will still be making exactly the same amount. The only way to protest is to not buy it, pirate it or buy it second hand. I'll just stick it on my Lovefilm list, not really interested in long term multiplayer anyway.
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PlugMonkey
22/07/09 @ 11:20
+3
Hence, that price is a result of the Retailer getting a hit on their cut, and still counts as a full price sale for all intents and purposes as far as Activision (and Chart trackers) are concerned.
Considering the meaty cut that retail currently take, I'm not going to be shedding too many tears over that. We pay the same price, the devs get more of the money. Is there a hidden downside to this that I'm not seeing? |
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PlugMonkey
22/07/09 @ 11:26
+1
Yes. I'll eat my hat if the devs take an extra penny. I'm sure IW weren't even consulted about this. It's an extra fiver straight into the pockets of the publishing execs.
Would you like that grilled or fried? The devs will most likely get a % royalties on whatever Activision make. Anyhow, Activision stump up the budget to make the games. Game/Gamestation/HMV don't. I'd still rather they got more money than retail taking such a big slice. |
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+25
To those of you who keep saying...
"fuck you activision - COD for £43.49 here" & "got mine from Argos at £36" You do realise this still counts as a sale - whether or not you pay £40 or £55 Activision will still see this as a sale and is more likley to continue this pricing nonsense because of it. If you REALLY wanted to show your dismay - you'd boycott the retail release and buy the second hand copies that will appear 2 or 3 weeks later. I for one will be keeping an eye on AVForums.com for that magic £25 price point. |
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+3
What will be interesting to see is for how long retailers are willing/able to take the hit for the consumers if other publishers follow suit. Eventually we'll have to vote with our wallets if we're not happy with the pricing of games in the future.
Edit: D'oh - too slow:(
Edited 1 times,
most recently on 22/07/09 @ 12:29
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+3
@Zomoniac
Is there a hidden downside to this that I'm not seeing? Yes. I'll eat my hat if the devs take an extra penny. I'm sure IW weren't even consulted about this. It's an extra fiver straight into the pockets of the publishing execs. In fairness that's not quite true, they usually have a money fight before pocketing it. ;) I'll be buying this on PC for €40 at most. Until I can get it that price they can feck off. I'm willing to do without until then. |
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+2
@ PlugMonkey
Well, yes. Retailers are hardly going to continue to take that margin hit for every high-profile release that would follow in this one's footsteps, should it be successful. While the scenario you describe sounds good in this case, eventually you (we) are the one that'll be paying more, not retailers. Bet on it. |
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beastmaster
22/07/09 @ 11:37
+4
Tell you what Activision. Show us your balls!
Drop the Call of Duty title as you planned on doing before and sell it at this price (along with the payable 'premium' online service & rumoured new controller for the game). If they were to show me their balls, I'd take a good run up and kick-em as hard as I could. Complete with suitable Tom and Jerry sound effects. |
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curtlikesmeat
22/07/09 @ 11:42
+8
The only guy this will hurt is the small retailer. I remember going to buy Assassin´s Creed from a small shop in my local town and they told me they weren´t stocking it because it cost them something ridiculous to buy it in in small quantities (i.e. they´d have to charge like 55 quid to make any profit, and therefore no one would buy it from them).
As I said before, I don´t buy games that are over 30, exercise some patience! |
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+5
Maybe they'll understand it better in C#
public bool WillBuyGame(Game game) { if((game.Price > 39.99 && game.Currency.ToUpper().Equals("GBP")) || (game.Price > 54.99 && game.Currency.ToUpper().Equals("EUR")) || !(game.Currency.ToUpper().Equals("GBP") || game.Currency.ToUpper().Equals("EUR"))) return false; return true; }
Edited 3 times,
most recently on 22/07/09 @ 12:46
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+4
Of course they blame it on the weak £ because they know only in the UK know one will give shit because its allowed in rip off Britain.
If Activision want to be greedy, they can do it with other people's money. I would buy at the normal £39.99, but there is no way I will pay nearly£60. I can't understand why they decide to 'legally steal' from customers who have made their product a success by buying it in the first place. The reward for these customers is to charge extra for the next version. Sorry Activision but your not having my cash. I will buy your game, but it will be a used ccopy. Your profit from me for your greed £0. I'm sure lots of others will do the same. Maybe creating a game without all the rubbish like night vision goggles would help reduce costs. |
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AphoticCosmos
22/07/09 @ 11:47
+2
"Analyst Michael Pachter reckons Activision's controversial decision to raise the price of Modern Warfare 2 has nothing to do with a weak pound as the publisher has claimed."
Yes, we know. The pound is very strong against the dollar at the moment, and is gaining some of it's lost strength on the Euro. Activision is certainly not a position to justify ripping off British consumers with a £15 price hike, which is absolutely ridiculous. A £5 hike is something I could fathom, but £15 is pure garbage. |
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BritishBlue1
22/07/09 @ 11:52
+5
A test?! The only thing they're testing is my patience. Activision's pricing policy is abysmal.
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+4
So, a petition then? Every sale of the game in 2009 will support Activision's test. If gamers could get so upset to start a petition versus Left 4 Dead 2, for in my opinion a less valid reason than this one, why can't we do it now?
Probably because it's a HOT game then? :) It'll sell loads, and if Activision was your business, wouldn't you do the same? |
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PlugMonkey
22/07/09 @ 11:55
+3
@PlugMonkey
Devs do not get anything except big thank yous from Activision. COD Modern Warfare IP is Activision's, not Infinity Ward's, so royalties go straight into Activision shareholder's pockets. Fairy-do's. But it doesn't all go into shareholder's pockets though, does it? The fact still remain that when IW start talking budgets with Activision for the next COD, how much money Activision made from the last one is going to figure a lot more than strongly than how much money Game made from it. I suppose my point really is if you, the consumer, are paying exactly the same amount of money for the game regardless, why on earth do you care about 'sticking it to Activision'? In recent years, the retailers have got so powerful that they have been driving down the price they pay publishers for games. If you refuse, your games aren't given any shelf space until you agree - and retail space will make or break a game as far as the casual consumer is concerned. Here you have a game that's so big, it would be suicide for a retailer to not have it in plain view. And suicide to try and sell it at the RRP. So Activision are sticking it out there and seeing what happens. If what happens is the price stays the same and retail's cut goes back down a bit, why do you give a shit? It's not that I have a big hard-on for Activision or anything. They're a bunch of cocks. I'm just confused as to why everyone is so determined to stick up for the poor little retailers. |
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Anthony_UK
22/07/09 @ 11:56
+1
I don't blame them really, annoying for us gamers yes, but at the end of the day Activsion are a business, and if they think they can sell something at a higher price, they will like any other business. I do however think they really are going to shoot themselves in the foot pricing this at £55.00. No matter how amazing the finished game will be, alot of the casual masses that were attracted first and second time round, simply won't pay an extra £15 for a game. Hell telling a few friends of mine who having played the hell out of the last 2 games, who are in a similar situation to me (late 20's, bill's, partner, kid's etc) have just said, ''I'll just get something else'' or '' Stick with the old one, till the it goes down in price''.
Your average Call of Duty player isn't the same as your average WOW player..... there far more fickle! |
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BritishBlue1
22/07/09 @ 11:57
0
#4
I did a currency conversion on what the yanks pay for MW2 and funnily enough it came up as £36 ($60), at least Argos got it right...
Edited 2 times,
most recently on 22/07/09 @ 13:02
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0
£15 price hike? The usual RRP for many Xbox 360 and PS3 games in the UK is £49.99 so it's actually a £5 price hike.
I shall be buying this game for the PC anyway and don't expect to pay more than £25 for it either. As for console owners, I've a sneaking feeling that the game might drop down to a more sensible price point following all the bad publicity this price hike is attracting. If it doesn't and you object to paying £54.99 for the game locally then your best course of action would be to shop around online for the best price nearer the release date. |
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PlugMonkey
22/07/09 @ 12:03
0
Darren: A fair point, well made, and frequently ignored.
Anyone douubting it should go here: http://www.play.com/Games/Xbox360/6-/Reg... Click on any game. Look at the RRP. It's £49.99. I refuse to pay that! Screw you entire games industry! I'm never buying a game again! Etc.. Etc.. |
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