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EA not sure on $70 next-gen PlayStation 5, Xbox Series X games

IbizaPocholo

NeoGAFs Kent Brockman

EA may not charge $70 for next-gen PS5 and Xbox Series X SKUs of its games. In a recent Q1'21 earnings call, EA CEO Andrew Wilson commented on raising prices of next-gen games. EA will offer free next-gen upgrades of Madden 21 and FIFA 21, and is more focused on the smooth cross-generation transition instead of trying to capitalizing on full $70 next-gen titles.

"We start with the player motivations, the expectations the players have around depth and breadth of live service, and we go from there," EA CEO Andrew Wilson said.

"We've already announced plans to transition free of charge from current-gen to next-gen. We'll also have innovations of Xbox Series X and PlayStation 5. What players asked for was the smoothest possible transition.

"We'll continue looking at the prices as time goes on."
 
$70 price tags will only make services like gamepass that much more appealing.

The Canadian price of a $70 US game = blow me.
Can you get AAA titles like Last Of Us 2 on game pass.

My question is is this sustainable? It already costs millions to craft a AAA title. Then you basically giving it away on gamepass for next nothing. How do the developers make a profit on such business.
 
Can you get AAA titles like Last Of Us 2 on game pass.

My question is is this sustainable? It already costs millions to craft a AAA title. Then you basically giving it away on gamepass for next nothing. How do the developers make a profit on such business.
Simple maths.

$15*12 months* 7 years = $1260

Apparently the average PS4 owner owns 5-6 games so 60*6+$400=$760. Even with 7 years of PS Plus, that goes up to $1,180.

And that’s assuming the user pays full price for the console, all the games and PS Plus over the course of 7 years which is even more unlikely than paying full price for Game Pass every month.

Game Pass in a best case scenario is A LOT more profitable than the traditional model. The problem is getting it off the ground.

Edit: Add the Xbox console in some cases for $400-$500 and it becomes even more lopsided in GP’s favor.
 
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rapid32.5

Member
EA is no longer a relevant player on the field to dictate next gen prices. The world has changed since 2006. We have many more services to enjoy games, in some cases even for free.
 
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Abear21

Banned
With the free upgrades I’m guessing they are pressured into keeping prices the same this year. How can you give a free upgrade to those who bought on PS4 or Xbox now for $60 and turn around and charge $70 to those that didn’t. It doesn’t make sense, but give it a year and I’m sure they will increase prices. EA has no competition for Madden or Fifa addicts (I’m one of them) so what’s stopping them?

This has me wondering if NBA Live still a thing EA is trying!
 

Devilich

Member
Simple maths.

$15*12 months* 7 years = $1260

Apparently the average PS4 owner owns 5-6 games so 60*6+$400=$760. Even with 7 years of PS Plus, that goes up to $1,180.

And that’s assuming the user pays full price for the console, all the games and PS Plus over the course of 7 years which is even more unlikely than paying full price for Game Pass every month.

Game Pass in a best case scenario is A LOT more profitable than the traditional model. The problem is getting it off the ground.

Edit: Add the Xbox console in some cases for $400-$500 and it becomes even more lopsided in GP’s favor.

Hold on.
Your calculations depict a best case scenario for the gamepass. Not factoring in the big chunk of PC Gamepass subscribers that pay merely 3,99€/4,99$ a month, and even than not everybody is subscribed every single month to such a service. People take breaks, some just play on and off. If you're comparing averages than only compare averages. Not best case vs average.

Assuming that the average PS4 user accumulates only 5-6 games over a timespan of an entire gen(~7years) is rather low in my book.
Where did you pull that data from?
 

Hunnybun

Member
Simple maths.

$15*12 months* 7 years = $1260

Apparently the average PS4 owner owns 5-6 games so 60*6+$400=$760. Even with 7 years of PS Plus, that goes up to $1,180.

And that’s assuming the user pays full price for the console, all the games and PS Plus over the course of 7 years which is even more unlikely than paying full price for Game Pass every month.

Game Pass in a best case scenario is A LOT more profitable than the traditional model. The problem is getting it off the ground.

Edit: Add the Xbox console in some cases for $400-$500 and it becomes even more lopsided in GP’s favor.

I think your figures are off. PS4 software sales are 1.1 bn, more than 10 times the number of consoles sold, so the average owner buys 10 games rather than 5 or 6.

Secondly, you're assuming that the average game pass subscriber owns the console for all 7 years of its life: that's not an apples to apples comparison with the PS4's games bought per owner, which is an average across ALL users, even ones who only bought the console in the last month.

Let's roughly assume that the average gamer owns an Xbox for half of its life, so 3.5 years.

Suddenly the relevant estimates become $630 vs $600, disregarding other streams of income, and discounted games etc.

You might say, but game pass subscribers will stay subscribed on the previous box even before they buy a new machine, but then a lot of PS4 gamers would've carried on spending on PS3 games before migrating to PS4.

The point is to try to figure out a fair comparison of what consumers would spend in the two systems over a similar timeframe.
 

Rikoi

Member
Why should they care about increasing the price by 10$?
They could give away FIFA for free and they would still earn billions with FIFA FUT.
 

Danjin44

The nicest person on this forum

In Canada we already paying $80.
 

Klayzer

Member
Confirmed. 70 incoming for EA products.

Doesn't affect me because I stopped buying their products over a decade ago.
 
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Megatron

Member
I think your figures are off. PS4 software sales are 1.1 bn, more than 10 times the number of consoles sold, so the average owner buys 10 games rather than 5 or 6.

Secondly, you're assuming that the average game pass subscriber owns the console for all 7 years of its life: that's not an apples to apples comparison with the PS4's games bought per owner, which is an average across ALL users, even ones who only bought the console in the last month.

Let's roughly assume that the average gamer owns an Xbox for half of its life, so 3.5 years.

Suddenly the relevant estimates become $630 vs $600, disregarding other streams of income, and discounted games etc.

You might say, but game pass subscribers will stay subscribed on the previous box even before they buy a new machine, but then a lot of PS4 gamers would've carried on spending on PS3 games before migrating to PS4.

The point is to try to figure out a fair comparison of what consumers would spend in the two systems over a similar timeframe.
That’s a good point, but you’re assigning the value of games gamepass users buy to be $0 which is unlikely. I think it’s fair to assume that even gamepass users are going to buy some games.
 

Hunnybun

Member
That’s a good point, but you’re assigning the value of games gamepass users buy to be $0 which is unlikely. I think it’s fair to assume that even gamepass users are going to buy some games.

I know, I was just using the original poster's assumptions.

Incidentally, PS4 software sold just in 2019 was 274m units, which with an average install base of about 100m over that time, means the average owner is buying nearly 3 games a year. At that rate the revenue collected is going to be very similar to a year's game pass subs.

It's interesting. When you look more closely at the figures it's clear what Microsoft is thinking with game pass: if you bundle up the cost and then split it across 12 months, you can effectively force gamers to spend more on games than they used to, basically by offering a superficially low monthly fee. It is quite clever, to be fair.
 
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MrFunSocks

Banned
People will complain about Microtransactions and F2P but then also complain about game prices possibly changing after not increasing more than $10 in the last 30 years. There's just no winning with "gamers".

I'm all for increasing the price if it means less studio closures. Last generation was a bloodbath with massively increased costs, where pretty much every studio was 1 bomb away from being shut down. I say this as an Australian where we pay the equivalent of over USD$70 per game already (AUD$100 RRP).
 
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Grinchy

Banned
It'll just cause more people to wait on sales than those who already do.

Look at gaming prices these days. Games go on sale within a couple months of release and it's not reactionary or unplanned. This is part of the process now. They have a good idea of how many people will spend $60, how many will wait for $40, how many will wait for $20, ect. It's all part of the plan.

You raise that to $70, and there will just be more people waiting for that first wave of sales than before. Maybe it all evens out in the end anyway and it'll still raise to $70. We'll see.
 
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Hunnybun

Member
I'd be more sympathetic to the case for a price rise if more than half of games weren't now being sold digitally, cutting out the retailer's share and greatly increasing the margin.

I feel like $60 for a downloadable file is quite a lot of revenue for the various parties to play with, really.
 

Hunnybun

Member
It'll just cause more people to wait on sales than those who already do.

Look at gaming prices these days. Games go on sale within a couple months of release and it's not reactionary or unplanned. This is part of the process now. They have a good idea of how many people will spend $60, how many will wait for $40, how many will wait for $20, ect. It's all part of the plan.

You raise that to $70, and there will just be more people waiting for that first wave of sales than before. Maybe it all evens out in the end anyway and it'll still raise to $70. We'll see.

Exactly, it's all just price elasticity, really.

People who say, oh developers are struggling at $60 a pop, better raise it to $70, totally miss the point.

The direct cost of delivering the game (digitally) is probably covered at $10 or so, everything after that is profit. Literally the only thing that matters after that is how much revenue any one price point generates. If $70 puts off more than 1/6 of people from buying the game (if my arithmetic is correct) then you've lost money and the price rise was USELESS.

It's purely a matter of working out what price point produces the highest revenue.
 

DavidGzz

Member
I think your figures are off. PS4 software sales are 1.1 bn, more than 10 times the number of consoles sold, so the average owner buys 10 games rather than 5 or 6.

Secondly, you're assuming that the average game pass subscriber owns the console for all 7 years of its life: that's not an apples to apples comparison with the PS4's games bought per owner, which is an average across ALL users, even ones who only bought the console in the last month.

Let's roughly assume that the average gamer owns an Xbox for half of its life, so 3.5 years.

Suddenly the relevant estimates become $630 vs $600, disregarding other streams of income, and discounted games etc.

You might say, but game pass subscribers will stay subscribed on the previous box even before they buy a new machine, but then a lot of PS4 gamers would've carried on spending on PS3 games before migrating to PS4.

The point is to try to figure out a fair comparison of what consumers would spend in the two systems over a similar timeframe.


You guys are also forgetting that people still buy plenty of games on Xbox despite having Game Pass. Also, when games are announced to be leaving the service people are likely to purchase certain games they still want to play with the GP discount. Game Pass must be doing pretty damn well for MS for them to drop Gold. All we can do is speculate since we'll never get actual numbers.
 

Justin9mm

Member
Can you get AAA titles like Last Of Us 2 on game pass.

My question is is this sustainable? It already costs millions to craft a AAA title. Then you basically giving it away on gamepass for next nothing. How do the developers make a profit on such business.
They don't.. It's not a viable long term business model.
 

Dr Bass

Member
Simple maths.

$15*12 months* 7 years = $1260

Apparently the average PS4 owner owns 5-6 games so 60*6+$400=$760. Even with 7 years of PS Plus, that goes up to $1,180.

And that’s assuming the user pays full price for the console, all the games and PS Plus over the course of 7 years which is even more unlikely than paying full price for Game Pass every month.

Game Pass in a best case scenario is A LOT more profitable than the traditional model. The problem is getting it off the ground.

Edit: Add the Xbox console in some cases for $400-$500 and it becomes even more lopsided in GP’s favor.


How many of those ten million GP subs were bought for a dollar, like mine was?

Also your idea of where the money is going for GP and it being “more profitable” is way off. Naughty dog is making a ton of money of if it’s games. If MS makes a grand off of a gamer over 7 years that money is going to MS who has to spread the money among hundreds of games, while keeping some for itself I assume. The model does not help creators that want to make big cutting edge titles. MS can subsidize its own efforts but again ... when do they start making money on this stuff?
 

Bernkastel

Ask me about my fanboy energy!
Can you get AAA titles like Last Of Us 2 on game pass.

My question is is this sustainable? It already costs millions to craft a AAA title. Then you basically giving it away on gamepass for next nothing. How do the developers make a profit on such business.
Gears 5 was on Game Pass at launch. Hellblade II, Avowed, Fable and the upcoming titles from Initiative, Coalition, InXile and Compulsion Games will all will be on Game Pass at launch. The Medium, Scorn and S.T.A.L.K.E.R. 2 all will be on game pass at launch.
 

phil_t98

#SonyToo
Can you get AAA titles like Last Of Us 2 on game pass.

My question is is this sustainable? It already costs millions to craft a AAA title. Then you basically giving it away on gamepass for next nothing. How do the developers make a profit on such business.
Erm yes you can. You can get all the gears of war games, halo games and forza games to.They may not be your taste but they are all AAA games, there are other big games from other publishers on there to. Sounds like you have never looked what is on gamepass
 
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MrFunSocks

Banned
The direct cost of delivering the game (digitally) is probably covered at $10 or so, everything after that is profit.
No it’s not profit, not when you have to recoup $100mil or so of development costs and then another $50mil in publishing and marketing. You don’t turn profit until you’ve covered your costs.
 

In Canada we already paying $80.
Yeah because your money is not strong like US$ or €... Infact you paying less than someone who pay in US$ or €...

69.99€ (price of a ps store game at release) = 110 CA$... And a lot of Canadians earn the same or way more money than EU citizens...
 
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Hunnybun

Member
No it’s not profit, not when you have to recoup $100mil or so of development costs and then another $50mil in publishing and marketing. You don’t turn profit until you’ve covered your costs.

LOL obviously I was referring to gross profit. Of course the overheads need to be covered, but that doesn't change the point I was making.
 

Stuart360

Member
Didnt a lot of devs say that development might actually be cheaper than this gen, and shorter dev times, due to stuff like ray tracing removing SOME of the work, and being able to use stuff like lazer scanners to scan objects and get an instant asset (chair, cup, table, etc) instead of having a artist spend a day creating a cup?. If there is any truth to that then they shouldnt be putting up prices at all.
 

ZywyPL

Banned
Fun fact: they are considering 80$.

70$ will happen this gen no doubt, maybe not in the first year, but it will, the publishers just need another CoD or GTA game that will make people spent 70$ without even blinking an eye, and the rest will be just history, the same way MW2 raised the price to 60$, and no one wondered why games aren't 50$ anymore ever since.
 
Hold on.
Your calculations depict a best case scenario for the gamepass. Not factoring in the big chunk of PC Gamepass subscribers that pay merely 3,99€/4,99$ a month, and even than not everybody is subscribed every single month to such a service. People take breaks, some just play on and off. If you're comparing averages than only compare averages. Not best case vs average.

Assuming that the average PS4 user accumulates only 5-6 games over a timespan of an entire gen(~7years) is rather low in my book.
Where did you pull that data from?
My bad made a mistake. The 5-6 games per PS4 is old data, it has increased a lot since then. It's up to 9.6 last we checked.



I also didn't factor the large chunks of gamers who do not buy games full price which is very common. I would have to work out how much the average user pays for their games. I didn't include the fact a rather large portion of the player-base doesn't pay $60 for the PS Plus but buy it on sale. I really just gave a best-case scenario.

Since it's been a year I increased the 9.6 to 10.

So it'd be (400) + (10*60) + (12*60) = $1,720 for the traditional model

And (400) + (15*12*7) $1,660 for the GP model

I also didn't include GP subscribers buying games anyway which they do.

I think your figures are off. PS4 software sales are 1.1 bn, more than 10 times the number of consoles sold, so the average owner buys 10 games rather than 5 or 6.

Secondly, you're assuming that the average game pass subscriber owns the console for all 7 years of its life: that's not an apples to apples comparison with the PS4's games bought per owner, which is an average across ALL users, even ones who only bought the console in the last month.

Let's roughly assume that the average gamer owns an Xbox for half of its life, so 3.5 years.

Suddenly the relevant estimates become $630 vs $600, disregarding other streams of income, and discounted games etc.

You might say, but game pass subscribers will stay subscribed on the previous box even before they buy a new machine, but then a lot of PS4 gamers would've carried on spending on PS3 games before migrating to PS4.

The point is to try to figure out a fair comparison of what consumers would spend in the two systems over a similar timeframe.
Yeah, 5-6 is based on old data. I also assumed the average price of the 10 games is $60 which is likely significantly above the average price. I was really doing a best-case scenario for both but I'd have to work out the number of several variables to give an accurate comparison and we probably don't have most of them.


How many of those ten million GP subs were bought for a dollar, like mine was?

Also your idea of where the money is going for GP and it being “more profitable” is way off. Naughty dog is making a ton of money of if it’s games. If MS makes a grand off of a gamer over 7 years that money is going to MS who has to spread the money among hundreds of games, while keeping some for itself I assume. The model does not help creators that want to make big cutting edge titles. MS can subsidize its own efforts but again ... when do they start making money on this stuff?
And how many times have you bought a retail game full price? When was the last time you paid the full $60 for PS Plus? Sure, across a period of 7 years you might be able to get GP for $1 or free a couple of times but a lot of that was to promote GP and might not come back in the future. Furthermore, losing $15 here and there is a lot less damaging than games on sales that instantly take off $20, $30 or even $40 off the 60 and the 50% off PS Plus subscription that slashes away $30 of that $60.

As for the last part, I'd assume the distribution of revenues on Game Pass is based off the playtime of the games. You also have to factor Game Pass subscribers will still be buying games anyway.
 

Iced Arcade

Member
Can you get AAA titles like Last Of Us 2 on game pass.

My question is is this sustainable? It already costs millions to craft a AAA title. Then you basically giving it away on gamepass for next nothing. How do the developers make a profit on such business.
.....yes. AAA games that also include multiplayer. (Tlou2 was great though)


And you got all the points and dollars behind gamepass, that's awesome! Should be a nice chap and share those details with the rest of us.
 

zombrex

Member
$70 RRP is almost meaningless when games quickly drop price very shortly after launch.
Both console makers want to recoup as much money as possible early in the console life. Especially to get the books in the positive after huge marketing spends. But the prices won't last as the generation continues and more and more consoles are sold.
 

timmyp53

Member
$70 prices don't make sense for launch and launch window games especially if they do free upgrades. This will change soon for sure though.
 
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