Tuesday, September 27, 2005

And One Other Thing...

Well, two, actually.

The first is an e-mail from DQ reader Ted Leiker, who points out a guaranteed ad source in future games: product placement. Here's how he describes it:
In the future I think we'll see such things as rendered cutscenes that are really just animated advertising. For example a licensed athlete in Madden may pull into the parking lot in his H2, get out of the vehicle and we get a closeup of his face wearing Oakley shades and then signing an autograph for a fan who has an Ipod in their ear. Then he asks the fan what tunes he's listening to and the fan tells him the new album by Kanye West. That sort of thing. From there you go to the kickoff.

Absolutely. Some games already use product placement (Splinter Cell, for example), but it's gong to increase at an exponential rate. Think how much money Take-Two could make if they licensed out advertising space and product placement in a Grand Theft Auto game. That will be coming very, very soon.

Oh, and here's another reason why charging $59.95 for games won't last long with the new generation: the used game market. I bet EB and Gamestop are licking their chops, hoping that $59.95 price point lasts as long as possible, because it will make even more people buy used games. So you sell fewer copies on the front end because of the higher price, and a higher percentage of people who actually do buy the game buy a used copy.

Here's another problem with higher game prices: publishers generally aren't trying to sell you one game. EA isn't trying to sell you Madden--they're selling a brand, and if you believe in the brand, you'll buy all the sports games across the EA Sports line. So there's a domino effect when people buy fewer copies of a game because of higher pricing: it's not just that game being affected. It's affecting the likelihood of a consumer buying other, related titles.

It's very difficult to quantify the magnitude of that effect, but I have no doubt that it exists and that it's important.

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