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Nintendo: Mobile game prices are 'big risk' to industry

Nintendo: Mobile game prices are 'big risk' to industry

Nintendo's Reggie Fils-Aime has spoken out against pricing practices for mobile games.

Nintendo of America president Reggie Fils-Aime has spoken out against the pricing practices of mobile game developers and the culture of disposable entertainment that is growing around such platforms.

Speaking to GT.TV, Fils-Aime said that when gamers are buying games for $2 then they are buying into the notion that games should be priced as such - which he sees as a risk to the industry at large.

'I actually think that one of the biggest risks today in our industry are these inexpensive games that are candidly disposable from a consumer standpoint,' said Fils-Aime.

'Angry Birds is a great piece of experience but that is one compared to thousands of other pieces of content that for one or two dollars I think actually create a mentality for the consumer that a piece of gaming content should only be two dollars.'

'I actually think some of those games are overpriced at one or two dollars but that's a whole different story,' he added.

Nintendo, meanwhile is preparing to launch the new 3DS platform in Japan next month, though some have been critical of Nintendo's pricing points - $249.99 in the US, £229.99 in the UK. Games will be priced at £39.99.

Let us know your thoughts in the forums.

36 Comments

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Xir 7th February 2011, 10:04 Quote
Look at the Steam sales. For some reason Beancounters and Game-managers don't get this into their heads.

Pricing influences sales, lower price=more sales

Naah, didn't hear me :D
Xir 7th February 2011, 10:07 Quote
Let me rephrase that:

I'd have bought a console, if the game prices would have been Reasonable instead of Ludicrous.
Now I didn't buy a Console and I buy games dirt-cheap. The console and games industry lost both ways.

Have to agree with 2$ beeing not enough for an new-full scale game.
For something 1-2 years old however...*looks at steam sale again*
yakyb 7th February 2011, 10:20 Quote
why are they comparing games that take a week to develop and you get bored with after 3-5 days against a game that took 6 months to develop and should last the player minimum 2 months
eddtox 7th February 2011, 10:33 Quote
Quote:
Originally Posted by yakyb
why are they comparing games that take a week to develop and you get bored with after 3-5 days against a game that took 6 months to develop and should last the player minimum 2 months

Because they want to be able to develop a game in a week and sell it for £30 :)
tad2008 7th February 2011, 10:39 Quote
Quote:
Originally Posted by Xir
Look at the Steam sales. For some reason Beancounters and Game-managers don't get this into their heads.

Pricing influences sales, lower price=more sales

Naah, didn't hear me :D

Lower prices can mean more sales, but when sales are already low or an item is in a niche market it can afford to have a higher price tag.

I know a few people that play games on their mobile and paying a couple of quid for a mobile game seems like perfect sense. If I was to pay £2 for a PC game I'd expect it to be trash and put together by monkeys or made for 5 year olds. Thats not to say that I want to pay over the odds either. I choose my games carefully, read reviews, speak to friends and then make my decision before making my purchase. I don't ever buy games based simply on the hype.
nukeman8 7th February 2011, 10:45 Quote
he has a point, i think its more fear of people not giving in to the £40-50 a go for a game anymore that has him panicking.
I struggled to reason £30 for a game let alone the stupid amounts they want now.
rollo 7th February 2011, 11:21 Quote
Lol at nintendo

Games should not cost £40 for a handheld console it's crazy money

Most expensive game on app store is £7.99 and that's football manager 2011 of which will last most peoplle a long time

Uncharted 2 is last full price game I brought
Instagib 7th February 2011, 11:24 Quote
I struggle to remember when i last paid full whack for a game. Pc games i wait until there's steam or play.com sales and grab a bargain, and xbox sales i buy at launch from a supermarket like sainsburys that are trying to undercut tesco. There are very few games out there that i would ever consider paying full price for. Make a decent game, and people will pay the going rate for it. Good games make money. Rubbish ones don't. Simples!

Don't start me on DLC.

I think this nintendo big shot is just trying to justify the rip-off price they're about to start charging. I also think they're starting to feel the competition in the mobile games market that has traditionally been dominated by the Gameboy. The simple solution is to stop moaning about it and make something special. Something that gets the punters lining up to buy the overpriced system and the overpriced game!
sotu1 7th February 2011, 11:25 Quote
Quote:
Originally Posted by Xir
Look at the Steam sales. For some reason Beancounters and Game-managers don't get this into their heads.

Pricing influences sales, lower price=more sales

Naah, didn't hear me :D

As a business the last thing you want to do is start price wars to sell product. It's a fundamental lesson. You start to devalue your own product internally an externally and it's easy for your competitors to match your price. When this happens, when does it end? The entire industry can't rely on ad-supported models and DLC alone. Fils-Aime is right here. It's not healthy.
liratheal 7th February 2011, 11:32 Quote
More like:

"People are having more fun with cheaper games and not buying the **** we're peddling, and now I'm going to throw my toys out of the pram"
Xir 7th February 2011, 11:44 Quote
Quote:
Originally Posted by sotu1
As a business the last thing you want to do is start price wars to sell product. It's a fundamental lesson. You start to devalue your own product internally an externally and it's easy for your competitors to match your price. When this happens, when does it end? The entire industry can't rely on ad-supported models and DLC alone. Fils-Aime is right here. It's not healthy.

Neither is asking 50euro's for a game, and them blaming poor sales on piracy. :D
You're right that this doesn't count when a game is new. But after the initial price point has faded, keeping up a high price is not beneficial.
  • If your game is bad (and doesn't sell)...slash it and sell lots (Mirrors Edge)
  • If your game is good, but starts to loose momentum afer a few years, slash it and sell lots (GTAIV)
The positive side is you keep your company in view, and you bind more customers to your francise. At the cost of shoving a few bits down a download.

With consoles and handhelds: having older games available for a reasonable price (okay, 2$ isn't a reasonable price) can broaden your customer base.
If more people buy your hardware, they're likely to buy software for it too.
Bob1234 7th February 2011, 11:48 Quote
What ever way you look at things, its all "powered" by marketing and bean counters.

1 million sales at $20 is not the same as 2 million at $10 or even 4 million at $5.

It is to any sane person, but when youre projecting and guessing its never that simple.

What they need is a way to sell the game and charge you later, that way the price you pay depends on the number sold.
Porkins' Wingman 7th February 2011, 12:32 Quote
This is like saying the recent film Monsters is dangerous to the film industry.

Of course it is, because it is evidence that the evolution of digital technology, and the spread of technological know-how, means that more and more people can make the same sort of thing and do it for less, so obviously the established studios, whose business models are based on substantial investment and massive marketing budget, are going to lose out.

When all you can buy is Ambrosia Rice Pudding for 87p a can you're going to buy Ambrosia Rice Pudding. But when Sainsbury start selling 'Basics' Rice Pudding (essentially the same but less fat and sugar) for 17p a can there's a good chance you're gonna start buying Sainsbury 'Basics' Rice Pudding. Then when you see all these companies taking money off you for what is acheivable with consumer technology you might even contemplate making the rice pudding yourself.

You end up getting saturated with rice pudding. The rice pudding market is flooded, there's no money to be made anymore. The rice pudding industry collapses. Survival of the fittest.

Perhaps this Nintendo guy is worried he ain't as fit as some of the young app producers...
Woodspoon 7th February 2011, 13:11 Quote
What he's actually saying is.
"Our games are over priced, we know their over priced, we know that you know their over priced and we don't care, we just don't want you to have the chance to not buy over priced games".
fingerbob69 7th February 2011, 13:18 Quote
Phone games are killing consoles! It's the begining of the end!!!!
mjm25 7th February 2011, 13:22 Quote
I really want some rice pudding :(
Cupboard 7th February 2011, 14:41 Quote
$2 for something like Angry Bird is reasonable, no way I'd pay more - in fact I have done most of it, golden eggs etc with the adverts and have no intention of paying.

£2.25 for the two Penny Arcade Adventures was well worth it on Steam last weekend, best money I've spent in ages!
azazel1024 7th February 2011, 14:47 Quote
Its just two sides to a coin. Sometimes I want some "cheap" entertrainment that is going to keep me occupied for a few hours. Sometimes I want some more complex entertainment that I am going to get lost in few a few days or a few weeks. Things like Angry birds are fun, but are at most a distraction for a few minutes or an hour every once in a great while.

Something like FFVII or XII, HL2, Total war games, etc...well those are weeks and weeks of fun that have tons of replayability. I'd gladly pay $10, 20, 30 or 40 for something like that (you lose me once a game gets over about $40 no matter how great, hence why I tend to be a "year after release" adopter)...$2 and I really only expect a couple of hours of entertainment.
kylew 7th February 2011, 14:47 Quote
Quote:
Originally Posted by rollo
Lol at nintendo

Games should not cost £40 for a handheld console it's crazy money

Most expensive game on app store is £7.99 and that's football manager 2011 of which will last most peoplle a long time

Uncharted 2 is last full price game I brought

Where did you bring it from?
Orlandu84 7th February 2011, 15:07 Quote
Quote:
Originally Posted by Porkins' Wingman
This is like saying the recent film Monsters is dangerous to the film industry.

Of course it is, because it is evidence that the evolution of digital technology, and the spread of technological know-how, means that more and more people can make the same sort of thing and do it for less, so obviously the established studios, whose business models are based on substantial investment and massive marketing budget, are going to lose out.

When all you can buy is Ambrosia Rice Pudding for 87p a can you're going to buy Ambrosia Rice Pudding. But when Sainsbury start selling 'Basics' Rice Pudding (essentially the same but less fat and sugar) for 17p a can there's a good chance you're gonna start buying Sainsbury 'Basics' Rice Pudding. Then when you see all these companies taking money off you for what is acheivable with consumer technology you might even contemplate making the rice pudding yourself.

You end up getting saturated with rice pudding. The rice pudding market is flooded, there's no money to be made anymore. The rice pudding industry collapses. Survival of the fittest.

Perhaps this Nintendo guy is worried he ain't as fit as some of the young app producers...

I don't know if Nintendo is worried about being fit, as much as being stuck. When you consider inflation, I think Nintendo has a real worry. They have been selling new console games for around $50 for decades. Over the last two decades, however, inflation has reduced their real profits from this price point by 38%. In other words, by not raising their prices significantly, Nintendo and other publishers are loosing profits in the long run. Add to that a saturated market, and you have bad news for earning any kind of profit. In other words, Nintendo and others have to put out a lot of effort just to make a profit at the current price point since raising that price point is almost out of the question. If they had to lower it even 10%, they say "bye-bye" to a good chunk of their profit.
jrs77 7th February 2011, 15:22 Quote
The big old companies don't get the point of the modern mobile world and the casual games for mobile devices.
They still think that people are playing games on a GameBoy like they did 15 years ago, which they don't. They simply use their smartphones. Same applies to MP3-players that noone needs anymore these days, as the smartphone has taken this spot aswell.

People want easily available and cheap entertainment for a few minutes inbetween waiting for the bus/train etc. And they don't want to buy yet another device for it, but they want it on their smartphone.

PC-games and full-blown consoles are a totally different beast, allthough we see this market shifting towards Steam or D2D etc.
Xir 7th February 2011, 16:03 Quote
Quote:
Originally Posted by jrs77
They simply use their smartphones. Same applies to MP3-players that noone needs anymore these days, as the smartphone has taken this spot aswell.
You'd think that, but I'm not sure it's already happening.
Have IPod sales gone down significantly? How many kids (as in under 10 years old) have a smartphone, how many a Nintendo?
maximus09 7th February 2011, 16:53 Quote
*slaps forhead* is this guy from Nintendo actually comparing mobile gaming with console gaming? These are pretty much two different forms of entertainment, one casual and the other not so. I guess Nintendo has been pushing their console as casual for along time now, but still I don't think there is any comparison. Just cause mobile devices are getting just as powerful as their outdated console they are getting worried!

They are too scared to innovate, thats the problem! They don't want to take a leap into the next-gen era of consoles so they are telling, the only similarly competing area, mobile gaming to slow down a little and don't over take them. Well tough Nintendo! You better make a darn good console next time and you have plenty of people to copy and improve upon now so take the leap and you can charge £40 for your games ;P In the meantime I happy buying your games second hand off ebay for a tenner! ;)
jrs77 7th February 2011, 16:53 Quote
Quote:
Originally Posted by Xir
You'd think that, but I'm not sure it's already happening.
Have IPod sales gone down significantly? How many kids (as in under 10 years old) have a smartphone, how many a Nintendo?

iPod sales are decreasing rather rapidly, with allmsot 20% decline over the last two years, while the iPhone sales ramped up by some 60% in the same period of time.

And kids? If I look around where I'm living in Finland, then basically every kid (6-18y) going to school has a mobile phone by default. And seeing the smartphones getting cheaper and cheaper, like for example a Nokia 5250 only being some €120 without contract the kids don't need a seperate MP3-player or a GameBoy (using this term generally) anymore.

And then there'll soon be the SonyEricsson Xperia Play, which is all you could've ever asked for, when the question is about a smartphone for gaming, music and video.

T2Xl7G9zitE

More detailed info -> http://www.engadget.com/2011/01/26/sony-ericsson-xperia-play-playstation-phone-preview/
ZERO <ibis> 7th February 2011, 18:11 Quote
Serious problem: if they realize our game is only worth $2 they might actually demand it costs $2!~
Jehla 7th February 2011, 18:20 Quote
I don't need app store games to convince me £40+ is too expensive for a game, I worked that out all by my self ages ago.
Madness_3d 7th February 2011, 19:51 Quote
I get annoyed at spending more than 59p on a game for my iPhone so the idea that I would waste money on the silly 3DS and its £40 games is rediculous. A PC game retails at ~£25 and drops to around £10 in a few months. That's more like it.

A new Monster Hunter Freedom on the PSP2 might tempt me that way though :P
deadsea 8th February 2011, 01:10 Quote
Wait... So he's worried about $2 games, that he deems as throwaways, canabalizing sales of his full on $40 console games? Isn't that the equivalent of worrying that microwave dinners will run fine dining restaurants out of business?

Someone go throw some fast food at him please.
SMIFFYDUDE 8th February 2011, 01:46 Quote
Wasn't Nintendo fined for price fixing in europe dating back to the early 90's a few years ago. Obviously Nintendo immediately forgot this, so still keeps their prices sky high. £230 for a hand held and £40 for its games!!! I can only think of two games I've payed full price for on release, Commandos 2 and Half-Life 2.
Cthippo 8th February 2011, 02:42 Quote
Quote:
Originally Posted by fingerbob69
Phone games are killing consoles! It's the begining of the end!!!!

Someone should do a mock ad of that, similar to the "Home taping is killing music" and "Piracy is killing music" ones.

The iPhone is killing games!
ZERO <ibis> 8th February 2011, 06:03 Quote
Quote:
Originally Posted by deadsea
Wait... So he's worried about $2 games, that he deems as throwaways, canabalizing sales of his full on $40 console games? Isn't that the equivalent of worrying that microwave dinners will run fine dining restaurants out of business?

Someone go throw some fast food at him please.

Well if his restaurant sells $40 fast food off McD's dollar menu there might be reason for worry...
sotu1 8th February 2011, 10:06 Quote
Quote:
Originally Posted by Xir
Neither is asking 50euro's for a game, and them blaming poor sales on piracy. :D
You're right that this doesn't count when a game is new. But after the initial price point has faded, keeping up a high price is not beneficial.
  • If your game is bad (and doesn't sell)...slash it and sell lots (Mirrors Edge)
  • If your game is good, but starts to loose momentum afer a few years, slash it and sell lots (GTAIV)
The positive side is you keep your company in view, and you bind more customers to your francise. At the cost of shoving a few bits down a download.

With consoles and handhelds: having older games available for a reasonable price (okay, 2$ isn't a reasonable price) can broaden your customer base.
If more people buy your hardware, they're likely to buy software for it too.


Ok, a few points here I would actually agree with you on. The elastic pricing makes perfect sense and anyone worth their grain of salt would do that, ie, sell high when demand is high, sell low when demand is low. I would also agree on cheaper hardware. PS2 is one case example of cheap hardware shifting buckets of software (which we all know is where the money is made)

With product expectations, there is a general public consensus of what is acceptable for a game. I for one would have happily paid £50 for New Super Marios Bros DS - it was that damn good. I would do that same for the next Diablo and Battlefield games. Personally I don't think it's ridiculous but certainly I know there are a lot of people who expect cheaper games because the price of gaming is getting too high, and because of this I expect to see a shift towards a lower cost base game with DLC at the consumer's discretion.

Phone gaming isn't killing core gaming per se, but it will certainly influence the next generation of gamers and setting low standards in terms of price will lower price expectations in the future.
carpetmonster 8th February 2011, 10:37 Quote
I see this guys point, but he doesn't make it very well.
jhng 8th February 2011, 21:14 Quote
I have to say that from some angles Nintendo's comments are tantamount to an admission that the major industry players have a concert party going on.

I can't imagine that every developer of a game on iOS or Android who prices their game at $2 is either an idiot or a charity. It must be sustainable for these developers otherwise the App Store would have withered on the vine pretty quickly, whereas it is still thriving three years on. Even considering that games from Nintendo and others may be that much more sophisticated (although iOS games are catching up), it suggest that Nintendo and others have been enjoying artificial inflated prices on the basis that the small range of traditional handhelds created a convenient barrier to entry for smaller competitors.

Given the way that iOS and Android games seem to be getting more and more comprehensive in the gaming experience offered, surely dedicated handhelds such as DS1, PSP etc will have gone Polaroid in a couple of years. I guess this is the real motivation behind their comments.

The solution, of course, is for Nintendo to start building its presence in the mobile gaming market. They have a great back catalogue of games and franchises, as well as loads of expertise. Why aren't they making great iOS games or at least porting some of their classics?

Lucasarts have done Monkey Island, Revolution did Brokensword, Square Enix have done the earlier Final Fantasy games as well as the new Chaos Rings. None of them seem to be grumbling about selling the games for a fraction of tradition console/handheld prices. Nintendo should grow up and stop whingeing...

EDIT: After posting curiosity got the better of me and I checked out the App Store. Searching for 'Nintendo' gets you a whole pile of third party apps along the lines of "Guide to Super Mario etc etc". In stark contrast, searching 'Sega' gets you a raft of Sega's own games, many of which have been really successful.
ZERO <ibis> 9th February 2011, 03:35 Quote
Visual Novels on Android and iOS, NOW!
niro 9th February 2011, 12:44 Quote
This guy is basically saying gamers are so dumb they can't understand the difference between a quickly developed mobile phone game and a console/PC game developed over months/years. It's priced according to how much time taken to develop it, no one is going to pay £30+ for a retro looking mobile phone game. I have never bought a console since the gamecube because of the crazy prices, and I rarely buy any game at full price (maybe once a year).

He says 'I actually think some of those games are overpriced at one or two dollars but that's a whole different story.' Well funnily enough I'm pretty sure we can find a load of people who think nintendo's products are overpriced too.

Bottom line is that if he has a problem with mobile phone games developers and their poor games, then why doesn't nintendo do something about it and make their games available for mobile phones, I'm pretty sure their old stuff would crush most games available, but then Nintendo has policy of only having games for their own consoles, so it's their own .
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