Comment on EA wants to place in-game ads in its full-price AAA games, again
TheRealKuni@lemmy.world 1 month agoCounter-counter-point, games have cost $60 ($70 with the most recent generation) since, what, 2006? 2007?
$60 in 2006 is over $90 today.
So we’re paying less upfront for games now than we were in 2006. Yet costs to develop AAA games have gone up significantly.
I’m not saying ads in games is a good idea, I fucking hate ads. I also hate microtransactions. But every time prices go up people get angry. Remember the backlash when Xbox Series X and PS5 prices were standardized at $70?
I don’t know the solution. But the current trends are unsustainable. Just like everything else in late-stage capitalism.
It’s not our responsibility to help their shareholders make money.
We are purchasing a product from them, or a service, and we expect it to work, and not market us when we are using it.
If the cost of manufacturer is not being covered in the sales price to the customer, then they need the raise prices, or go out of business.
Or tell their shareholders to go pound sand.
They also have far better scaling on sales than they did in 2006, with tons of storefronts and easy access for anyone to download and play a game without needing to go to a physical store.
People like to complain about steam taking 30% of a sale, but it isn’t like game companies were getting 70% of a boxed game on a shelf. They had manufacturing, shipping, and a ton of other costs for physical media that they don’t spend on digital sales that can scale infinitely in an extremely short period of time because it can’t sell out locally.
If they are spending too much for their return, then they need to scale back their spending.
Even though costs of AAA games have gone up for some games (certainly not all) because of the size of teams/labor hours, so have the volume of sales. Publishers have made more and more profit while the average price of AAA games had stayed about the same for a long time.
Games selling in the hundreds of thousands was considered really good decades ago but now those are in the tens of millions.
Publishers aren't having problems with profitability, so much so that they've been buying up large swaths of development houses and IPs and then dismantling them when they have a single flop.
EA's gross profit in 2010 was $1.6B, in 2014 was $3.03B and in the past 12 months have been $5.8B right now according to macrotrends.
But the current trends are unsustainable
The current trend in profitability is increasing, not decreasing. It isn't a minor trend or minor increases either.
Major publisher profitability has vastly increased in spite of stagnant game prices. They don't have to increase prices to increase growth. It is simply that the market allows the increase of the price with more profitability and so they do.
A business model wherein the thing someone makes and sells brings in a profit just by people buying the thing, without the long-tail of continuing to sell the customer’s eyeballs to whoever, is not an unreasonable concept. Countless indie games and smaller publishers have managed this for generations and still do.
If EA and the other massive blockbuster publishers can’t figure out how to make their business model work in a non-exploitative manner, too damn bad about it. We don’t actually need them.
Even though costs of AAA games have gone up for some games (certainly not all) because of the size of teams/labor hours, so have the volume of sales. Publishers have made more and more profit while the average price of AAA games had stayed about the same for a long time.
Games selling in the hundreds of thousands was considered really good decades ago but now those are in the tens of millions.
Publishers aren't having problems with profitability, so much so that they've been buying up large swaths of development houses and IPs and then dismantling them when they have a single flop.
EA's gross profit in 2010 was $1.6B, in 2014 was $3.03B and in the past 12 months have been $5.8B right now according to macrotrends.
But the current trends are unsustainable
The current trend in profitability is increasing, not decreasing. It isn't a minor trend or minor increases either.
Major publisher profitability has vastly increased in spite of stagnant game prices. They don't have to increase prices to increase growth. It is simply that the market allows the increase of the price with more profitability and so they do.
TheGrandNagus@lemmy.world 1 month ago
This is an argument publishers love to make, but it’s bullshit. Yes, games (assuming you ignore in game purchases/DLC, which you obviously shouldn’t but I digress) have got cheaper in real terms due to inflation lowering how much $60 is really worth, while games have stayed at that level.
It’s also true that development costs have went up.
Now, here’s the part that game publishers conveniently never talk about: distributing games is far cheaper now. We’re usually not shipping pallets of discs that take up loads of space and cost money to physically create, while also having to build in a profit margin for all the middlemen along the way, including for the retailer. We predominantly buy games digitally.
On top of that, gaming used to be niche, now everybody does it. The market is far larger, so they don’t need to charge a lot to still make bank.
CosmicCleric@lemmy.world 1 month ago
Great points! And yes, they’re almost never talked about!
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