Game Makers Cut Prices and Offer Better Selection6 Jun, 2002 By: David Ward
With so many strong video game titles coming out during the second half of the year -- especially for the Sony PlayStation 2 -- publishers are looking for any edge they can get in securing retail shelf space this coming holiday selling season. That means not only promising more in-channel as well as print and TV marketing support, but also tinkering with prices to offer more value to consumers.
One of the major debates emanating out of the recent industry confab E3 in Los Angeles was software pricing. Sony Computer Entertainment America indicated it would be dropping wholesale prices of its first-party titles to $32, enabling retailers to reach a $39.99 sellthrough price.
During a private meeting with publishers prior to E3, Sony also outlined an incentive program for third-party game makers that will allow for a royalty rebate once a game reaches certain sales milestones. While the program was complex and its exact details remain sketchy, it will likely mean some game makers may cut their prices in hopes of driving unit sales so they can reach the royalty rebate plateau.
NewKidCo president Arthur Levine indicated he will be pricing his company's two key PlayStation 2 releases -- Tom & Jerry War of the Whiskers and E.T.: The Extra Terrestrial: Return to the Green Planet -- at $39 so as not to compete directly with triple-A titles like Acclaim's Turok Evolution at $49.
Publishers who Video Store Magazine spoke with said there are no such pricing dilemmas for Nintendo GameCube and Microsoft Xbox software, both of which will have games at $49.95. But Nintendo did confirm it was cutting the royalty for Game Boy Advance games by $2 to $3 per unit, enabling publishers to reach $29.99 for top new games and $19.99 for value-priced and re-released games.
What stood out at this year's E3 was that at virtually every booth, there was at least one -- and in some cases several -- potential breakout hits for every platform. Included are games based on movie and TV licenses such as Mary Kate & Ashley Olsen; John Carpenter's horror classic, The Thing; and the aforementioned E.T., whose release is being timed to coincide with the DVD launch of the 20th anniversary edition of the movie Oct. 22.
Randy Webster, merchandise manager with Rogers Video, said the sheer number of high-profile games due out this fall is both a blessing and a curse to retailers, forcing them to think less like store buyers and more like gamers to separate the real hits from the pretenders.
“You have to look more at the details and some of the intangibles that a game offers,” he explained. “For example, there are a lot of games out there where they cheat a little bit on graphics. So the difference between a top-quality game like [Microsoft's] Brute Force and some of the others is night and day.”