Current Events > in response to gamers upset at EA, analyst says game should cost more

(+) Yeah! (+)

https://www.cnbc.com/2017/11/20/gamers-overreacting-on-ea-star-wars-game-firms-should-raise-prices.html

http://metro.co.uk/2017/11/21/video-games-should-be-more-expensive-and-gamers-are-overreacting-to-battlefront-ii-says-analyst-7097695/

Gamers livid over Electronic Arts' in-game moneymaking strategy in its new "Star Wars Battlefront II" title are overreacting, according to one Wall Street firm.

"We view the negative reaction to Star Wars Battlefront 2 (and industry trading sympathy) as an opportunity to add to Electronic Arts, Take-Two, and Activision Blizzard positions. The handling of the SWBF2 launch by EA has been poor; despite this, we view the suspension of MTX [micro-transactions] in the near term as a transitory risk," KeyBanc Capital Markets analyst Evan Wingren wrote in a note to clients Sunday.

"Gamers aren't overcharged, they're undercharged (and we're gamers). This saga has been a perfect storm for overreaction as it involves EA, Star Wars, reddit, and certain purist gaming journalists/outlets who dislike MTX," Wingren wrote.

he analyst estimated cost per hour for a typical "Star Wars Battlefront II" player. He said if a gamer spent $60 for the game, an additional $20 per month for loot micro-transaction boxes and played around 2.5 hours a day for one year, it comes out to roughly 40 cents per hour of entertainment. This compares to an estimated 60 cents to 65 cents per hour for pay television, 80 cents per hour for a movie rental and more than $3 per hour for a movie watched in a theater, according to the firm's analysis.

As a result the analyst reiterated his overweight ratings for Electronic Arts, Activision Blizzard and Take-Two with price targets of $134, $78 and $144 respectively.

tl;dr

analyst says EA should charge MORE
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Thats why stock analysts are the worst.
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He's a shill, who cares what he says?

Hes making the assumption that you play every day for an entire year though, which isnt true at all for a lot of people.
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Great to know that they're gamers too
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TheDarkCircle posted...

He's a shill, who cares what he says?

He owns EA stock or something?

I thought he was just a random analyst.
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Sounds like an angry investor who got fucked by falling EA stocks.
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@DuranOfForcena posted...

i mean, he's kinda right. games are one of the only things whose base price is the same today as it was 25 years ago, $60. they literally haven't been allowed to keep up with inflation, and that's why they've had to resort to so many other sketchy monetary tactics. it's a dilemma, for sure.

meanwhile the price of basically all other technology actually goes down and down and down overtime

It would take a decade before Motorola's DynaTAC finally reached consumer hands. On September 21, 1983, Motorola made history when the FCC approved the 8000X, the world's first commercial portable cell phone. It cost consumers a whopping $3,995 at the time.Apr 3, 2013

$500 for an Iphone is actually super cheap compared to this $3995 cost especially when you consider the Iphone is much more than a cell phone.

Oh but leave it to gamers to buy into bs
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Lol AAA western garbage
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"Wall Street ass kisser kisses corporate ass"
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DuranOfForcena posted...

i mean, he's kinda right. games are one of the only things whose base price is the same today as it was 25 years ago, $60. they literally haven't been allowed to keep up with inflation, and that's why they've had to resort to so many other sketchy monetary tactics. it's a dilemma, for sure.

they are priced to what people will pay

period

if that has fallen over time, it's because the volume has gone up and the new audience expects a cheaper product
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If wages weren't stagnant for the past 40 years this would be okay.
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Doesn't this analysis assume that publishers aren't in a giant gaming "bubble" right now? Sure, EA should charge $134 per game to make exactly as much money as they were going to make with loot crates, but the fundamental assumption with this analysis is that what they were going to make was reasonable to begin with.
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DuranOfForcena posted...

darkphoenix181 posted...

meanwhile the price of basically all other technology actually goes down and down and down overtime

so you don't understand how inflation works then

you clearly do not either

real item value declines can outpace inflation and often do when volume goes way up.
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@DuranOfForcena posted...

darkphoenix181 posted...

meanwhile the price of basically all other technology actually goes down and down and down overtime

so you don't understand how inflation works then

explain it to me then

tell me why cell phone haven't gone up from their initial $3,995 price via inflation

I will wait for your answer
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Darkman124 posted...

DuranOfForcena posted...

i mean, he's kinda right. games are one of the only things whose base price is the same today as it was 25 years ago, $60. they literally haven't been allowed to keep up with inflation, and that's why they've had to resort to so many other sketchy monetary tactics. it's a dilemma, for sure.

they are priced to what people will pay

period

if that has fallen over time, it's because the volume has gone up and the new audience expects a cheaper product

Which is killing devs, so many have gone bankrupt over the years. Though they really should just focus on making a good game and putting less emphasis into the useless money hog known as graphics.
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LightHawKnight posted...

Which is killing devs, so many have gone bankrupt over the years.

can you give examples?
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LightHawKnight posted...

Which is killing devs, so many have gone bankrupt over the years. Though they really should just focus on making a good game and putting less emphasis into the useless money hog known as graphics.

if devs are going bankrupt in a market with INCREASING volume, they are spending too much in development on things that do not enhance sales

likely a result of a push from hardware manufacturers, who clearly are not reimbursing them for such costs
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Haha what a pos. The market determines what something is worth and the amount of solid and COMPLETE games for $60 that are out there are proof that's he's bullshitting.

By all means raise the prices of your shitty games for $150, that's one way to get rid of EA.
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DuranOfForcena posted...

Darkman124 posted...

they are priced to what people will pay

period

that's exactly my point. people don't want to see any higher than a $60 base price tag on games. if it's higher, they won't buy it. and that's because games have always been that price, even 25 years ago. but $60 25 years ago is not the same as $60 today. hence, gaming companies have had to resort to other methods of getting more money out of their products, almost entirely more sketchy and underhanded than simply raising the base price. so, like it or not, we as consumers brought these shitty monetary practices on ourselves. that's the truth.

25 years ago games didn't make a billion dollars on launch weekend because the number of people buying games was much, MUCH smaller.
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Darkman124 posted...

LightHawKnight posted...

Which is killing devs, so many have gone bankrupt over the years. Though they really should just focus on making a good game and putting less emphasis into the useless money hog known as graphics.

if devs are going bankrupt in a market with INCREASING volume, they are spending too much in development on things that do not enhance sales

likely a result of a push from hardware manufacturers, who clearly are not reimbursing them for such costs

And yet all fans care about is graphics.
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s0nicfan posted...

DuranOfForcena posted...

Darkman124 posted...

they are priced to what people will pay

period

that's exactly my point. people don't want to see any higher than a $60 base price tag on games. if it's higher, they won't buy it. and that's because games have always been that price, even 25 years ago. but $60 25 years ago is not the same as $60 today. hence, gaming companies have had to resort to other methods of getting more money out of their products, almost entirely more sketchy and underhanded than simply raising the base price. so, like it or not, we as consumers brought these shitty monetary practices on ourselves. that's the truth.

25 years ago games didn't make a billion dollars on launch weekend because the number of people buying games was much, MUCH smaller.

Not to mention technology has evolved along the way. The prices of electronics and software have changed completely. You can't be comparing costs like this it's just childish.
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DuranOfForcena posted...

that's exactly my point. people don't want to see any higher than a $60 base price tag on games. if it's higher, they won't buy it. and that's because games have always been that price, even 25 years ago. but $60 25 years ago is not the same as $60 today. hence, gaming companies have had to resort to other methods of getting more money out of their products, almost entirely more sketchy and underhanded than simply raising the base price. so, like it or not, we as consumers brought these s***ty monetary practices on ourselves. that's the truth.

no it is not. volume has dramatically risen over time. people don't pay $60 because "it always cost $60", they pay that because they feel it's not a good deal above that price. if that $60 is worth $50 in last decade's money, then the perception of value in a single video game has gone down.

given that the total volume of video games has dramatically risen, perceiving one game to have less value is completely natural and consistent with every other product development cycle ever.

selling an item with a fixed development cost for 40% less per item, but with a sales volume that is 100% greater, is a net gain to the developer

the problem is development cycles have ballooned in cost, which is absolutely not the customers' fault--in fact, high volume sales of relatively low-development cost games demonstrates that the fault for this scenario is entirely on developers who insist on including high-cost elements they cannot afford
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LightHawKnight posted...

And yet all fans care about is graphics.

which fans are you talking about

if you look at game sales by total volume the biggest sellers are not the most graphically impressive products
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Anyone else remember when games costed $50, there were expansion packs instead of DLC that offered lots of new content and companies actually offered complete games ?

$60 is a fair price for a standard edition, if prices were higher most people would stop buying new games cause it is just too expensive. Gaming needs to stay an affordable hobby or people will quit gaming and kill the industry.
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He's setting targets for what he thinks the stock for those three companies is worth per share. He isn't saying games should cost $150.
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Offworlder1 posted...

Anyone else remember when games costed $50, there were expansion packs instead of DLC that offered lots of new content and companies actually offered complete games ?

$60 is a fair price for a standard edition, if prices were higher most people would stop buying new games cause it is just too expensive. Gaming needs to stay an affordable hobby or people will quit gaming and kill the industry.

XPacks worked when total volume of games was less

now i feel little motivation to buy an Xpack when I can just move on to the next full game

DLC works now because it gets a player while they're still invested in the game
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To be clear, I think that bolded section is talking about stock prices, not game prices
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They definitely should cost more but not 150ish lol thats jst a joke. I'd buy 1 game per year max as opposed to my current average of 3 games per year.

IMO the true cos should be around 70-80, somewhere between those numbers. Thing is everyone is mentally programmed to not care about the price of new games knowing that its 59.99 every time, so its not even something u think about, u just think about whether you want the game. If they jack up the price people will reconsider if its even worth getting. And alot of the times it wont be worth it.
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2.5 hours a day for a year, lmao
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The gaping flaw in his argument is that we plain and simply do not measure the monetary value of entertainment media by the amount of time spent enjoying it. A 3 hour movie does not cost more to see than a 90 minute movie. People who only watch tv for an hour a day do not pay less than those who watch it for 6+ hours a day. Thats just not how it works.
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This guy, Evan Wingren, is in EA's pocket. Old news.







Edit: Even worse, he's in Comcast's pocket too.

*Stolen from someone else on imgur. Not my personal research.
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I've only surpassed 1000 hours on one game, ever. 2.5 hours per day for a year is not at all realistic or typical.
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lol, so he's literally writing damage control for their board

sponsored content!
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eston posted...

The gaping flaw in his argument is that we plain and simply do not measure the monetary value of entertainment media by the amount of time spent enjoying it. A 3 hour movie does not cost more to see than a 90 minute movie. People who only watch tv for an hour a day do not pay less than those who watch it for 6+ hours a day. Thats just not how it works.

And he somehow is under the mind boggling assumption that everything costs the same to make per hour.
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If loot boxes were as good as overwatch loot boxes it would be so much better problem is people will complain no matter what. the gaming industry is in a win lose situation where the fan base is divided so there's barely any way to please both parties.
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iirc, that "analyst" is actually an investor to EA >_> I need to doubt check that though.
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He's not wrong, though.

Antifar posted...

To be clear, I think that bolded section is talking about stock prices, not game prices

edited
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daftpunk_mk5 posted...

eston posted...

The gaping flaw in his argument is that we plain and simply do not measure the monetary value of entertainment media by the amount of time spent enjoying it. A 3 hour movie does not cost more to see than a 90 minute movie. People who only watch tv for an hour a day do not pay less than those who watch it for 6+ hours a day. Thats just not how it works.

And he somehow is under the mind boggling assumption that everything costs the same to make per hour.

he's not, he's just being a shill. What's mind boggling is why anyone would give a shit about what this guy has to say and publish it.
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darkphoenix181 posted...

Gamers aren't overcharged, they're undercharged (and we're gamers)

oh fuck off. I hate him already
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NeonOctopus posted...

iirc, that "analyst" is actually an investor to EA >_> I need to doubt check that though.

No fucking shit. He wrote an article saying now is a good time to invest in EA. Of fucking course he is invested in them.
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Questionmarktarius posted...

He's not wrong, though.

he is. the growing volume of the industry and the prolific nature of used game sales and steam sales for PC games places a hard cap on the price a company can expect for a single video game.

independent development companies don't even try to charge $60 for a game. they set up a development cycle with costs built in to support a price target they think can be swung at release.

the bigger companies have an ad campaign behind their games, and typically that is what enables them to manage $60. pricing higher just means people delay their buy, the launch weekend fails, investors get skittish, and the board gets slammed.
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darkphoenix181 posted...

DuranOfForcena posted...

darkphoenix181 posted...

meanwhile the price of basically all other technology actually goes down and down and down overtime

so you don't understand how inflation works then

explain it to me then

tell me why cell phone haven't gone up from their initial $3,995 price via inflation

I will wait for your answer

still waiting for you to explain to me why cell phones don't cost like $8000 today because inflation
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AlephZero posted...

No f***ing s***. He wrote an article saying now is a good time to invest in EA. Of f***ing course he is invested in them.

https://www.youtube.com/watch?v=0akBdQa55b4

this is older than dirt and the worst kind of text to video ever made but always relevant when someone is telling you to buy the dip

even when they're right
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IMO it's a bit ironic since at it's core the whole point of the loot box system (from a gamer's perspective) is that you can pay real money so that you don't have to spend hours grinding
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