Hello! Welcome to the third episode of my series of discussions about specific points for the next future of Nintendo, their next console. In this case, the 3DS successor.
The first two episodes can be found here
Next Nintendo platform - Volume 1: Haptic technology - http://neogaf.com/forum/showthread.php?t=740911
Next Nintendo platform - Volume 2: eShop / digital environment
http://neogaf.com/forum/showthread.php?t=746953
This subject could actually be extended to the whole industry, where too many games don't sell enough and only selected franchises sell big, but let's just focus on the handheld environment. Simply, game prices are just too high. Sure, 39.99 for handheld games (even if high quality games like Nintendo efforts, or like Bravely Default, Monster Hunter, Killzone: Mercenary, etc.etc.) are rightly considered as too much, and this is a major problem in a country like UK, where 3DS has been the best selling gaming device in 2013, but, even counting the massive differences in third party support compared to PS3/360/PS4/One, its software sales could be considered just as "so-so" if you're optimistic. And this is lowering sales potential of many titles that, at 29.99 or even 34.99, could actually attract much more people, especially if they are new IPs. Such problem becomes even more impactful when you consider the current market environment, with smartphones and tablets and all their offerings at less than $1, even. Yes, the majority of them are low-low quality efforts, with IAP all over them, and the continuation of this trend will surely bring, sooner or later, to problems in the app market itself...but still, they've affected the perception of how much a game for a portable system should cost.
So, how to solve this problem? In my opinion, these are the steps Nintendo should take to solve the pricing problem
1.A flexible pricing system
This is certainly one of the biggest problems, actually, of the whole industry: game prices aren't flexible enough. No, I'm not talking about special deals after the launch: I'm specifically talking about the launch prices. There are games that would fare far better at launch if priced at 49.99 (starting from 59.99), or even 44.99, especially if they are new IPs, but lots of them still releases at full price, and then they fail to sell enough, they get heavily discounted, and a possible brand new interesting IP disappears in 80% of the cases. In this case, problems aren't just development costs, but also discs / carts production costs. IIRC, it was being talked in one of this year's NPD thread that each cart costs 12$ to cost (this has been mentioned by Nirolak...I hope he can confirm this).
Think about it: you have on the same shelf a brand new IP you know nothing about and, on the other side, a brand new COD/FIFA/Mario. Both at the same price. What do you think the common customer will buy? Obviously, COD/FIFA/Mario, because it's something well known and that the customer is sure it'll be worthy the price. Having price flexibility would allow, for example, to release a brand new IP game at a reduced price, giving it the possibility of being bought by as much people as possible, being appreciated, and then, if the supposed game had a great success, it can see a sequel, this time at full price because now the customer knows that game and he knows he can have fun with that. So, Nintendo (or the whole industry, for that matter) should work with production lines in order to make it as available to flexibility as possible.
2.Selling parts of the game digitally
You are a single player gamer / someone who would like to play just the campaign mode of a game, without any multiplayer component, but you still have to spend 39.99/59.99 for the whole package that includes the part that you don't want.
You are someone who loves multiplayer action, don't bother with campaign mode, but you still need to pay the full price for the full package.
Two opposite situations, the same problem: forcing the customer to buy a part of the game he doesn't want / like.
And, because of that, there are customers that decide to not buy that game, because there's a part that they don't consider as valuable.
The solution to this would be allowing developers to sell parts of their games on the digital store. Selling the campaign mode for a specific price and the multiplayer mode for another specific price would enlarge the customer base for many titles. Giving customers as much options as possible (without doing the opposite error: giving too much options, leaving him confused about what to do) is the key. It would mean further pricing flexibility, rise in digital spending, rise in game sales in general.
P.S. COD at 39.99/59.99 --> each part NOT for 19.99/29.99, but for a little more, like 24.99/34.99, in order to make the complete package appear as a bundle at a discounted price, and so letting it remain attractive for all the others who don't bother in paying even for components they don't care too much.
3.Allowing Amazon, Game.com, Gamestop.com, etc.etc., to sell digital SKUs at their prices
Basically, what Sony is doing right now on Amazon.com and what Nintendo started earlier last year on Game.com: selling digital versions of retail games at the prices on Amazon. So, digital versions being part of the same deals on those sites.
4.Digital versions of games being priced lower
Another focal point. And another problem of the whole industry. Game prices are high, but digital game prices are even higher, by being as much as the retail prices (or even more...hello EA and Activision). There is a difference in the digital SKU: there's no physical cart, no production cost for that, no case costs, no transport cost. It can't be priced as much as the retail version. What they should do is letting developers putting digital versions at between 5 to 10$ lower prices compared to their retail versions (with 10$ being far more preferrable). This is actuall something that, more or less, is happening in Japan: more and more games are priced lower in digital versions compared to their retail SKUs (on 3DS, the discount is usually around 500 Yen. Last case in point: New Love Plus+, 5,700 retail and 5,200 digital). However, here there's a "problem": retail stores fear digital rise. They fear that they could lose a massive share of the market if digital versions beat them in prices. But, actually, I think there could be an easy solution for that...
5. ...even in retail stores
Let the Gamestops, Game, Argos, Best Buy, etc.etc. of this world sell the download codes of games at the same reduced prices! Download cards have much less inventory costs than physicial cases with cartridges in them, so selling them at reduced prices shouldn't negate their revenue at all. It's simply giving customers a choice.
If they like to possess the physical version, and want to play immediatly, they pick up the retail version.
If they like the game, but want to buy it at less, and they're not afraid of waiting for downloads, then they pick up the download card.
Download cards could be made "attractive" with great cover arts, too. And, actually...what if, in cases of extreme shortages where not even download cards are available, retail stores themselves can produce a limited amount of download cards?
It could be done like this: a specific Nintendo site, where you log in (name, surname, name of the chain and store), and you can purchase a specific amount of supplementary codes that can be printed on leftover cards with no code? This is pure theory, but think about this possibility for retailers and their sales. Much better than just have to wait for new shipments, that could come too late, when the demand is slowing down,right?
6....Even for parts of the game
Basically, the second point I described, but applied in the retail stores as well. This would certainly help stores in not feeling ignored when games are offered also in separate parts in the digital stores. And give customers a broader selection of choices even in retail stores.
7.Letting customers start the download right in the store
The web version of PSN lets you buy a game, and then you can actually start the download from there on your PS3. And that's great. And how can this be combined with selling digital download codes in stores? With a terminal where you log in with your account, put your code and...the download starts immediatly on your console. It could also be used for charging your digital store wallet by typing codes of 10/20/50$ download cards, and for letting people give a look at the digital only lineup. With app versions of the store, it could sound a little redundant, but it would be useful in cases when the smartphine connection doesn't work / is slow, and as something that let every kind of customers (especially the most casual one) see the digital only offering and start downloads even before they're back at home.
I think I put in the biggest points I wanted to share. If I come up with other ideas, I'll put them in the OP. Now, it's time to discuss about what you would do on this subject. Time to discuss!
The first two episodes can be found here
Next Nintendo platform - Volume 1: Haptic technology - http://neogaf.com/forum/showthread.php?t=740911
Next Nintendo platform - Volume 2: eShop / digital environment
http://neogaf.com/forum/showthread.php?t=746953
This subject could actually be extended to the whole industry, where too many games don't sell enough and only selected franchises sell big, but let's just focus on the handheld environment. Simply, game prices are just too high. Sure, 39.99 for handheld games (even if high quality games like Nintendo efforts, or like Bravely Default, Monster Hunter, Killzone: Mercenary, etc.etc.) are rightly considered as too much, and this is a major problem in a country like UK, where 3DS has been the best selling gaming device in 2013, but, even counting the massive differences in third party support compared to PS3/360/PS4/One, its software sales could be considered just as "so-so" if you're optimistic. And this is lowering sales potential of many titles that, at 29.99 or even 34.99, could actually attract much more people, especially if they are new IPs. Such problem becomes even more impactful when you consider the current market environment, with smartphones and tablets and all their offerings at less than $1, even. Yes, the majority of them are low-low quality efforts, with IAP all over them, and the continuation of this trend will surely bring, sooner or later, to problems in the app market itself...but still, they've affected the perception of how much a game for a portable system should cost.
So, how to solve this problem? In my opinion, these are the steps Nintendo should take to solve the pricing problem
1.A flexible pricing system
This is certainly one of the biggest problems, actually, of the whole industry: game prices aren't flexible enough. No, I'm not talking about special deals after the launch: I'm specifically talking about the launch prices. There are games that would fare far better at launch if priced at 49.99 (starting from 59.99), or even 44.99, especially if they are new IPs, but lots of them still releases at full price, and then they fail to sell enough, they get heavily discounted, and a possible brand new interesting IP disappears in 80% of the cases. In this case, problems aren't just development costs, but also discs / carts production costs. IIRC, it was being talked in one of this year's NPD thread that each cart costs 12$ to cost (this has been mentioned by Nirolak...I hope he can confirm this).
Think about it: you have on the same shelf a brand new IP you know nothing about and, on the other side, a brand new COD/FIFA/Mario. Both at the same price. What do you think the common customer will buy? Obviously, COD/FIFA/Mario, because it's something well known and that the customer is sure it'll be worthy the price. Having price flexibility would allow, for example, to release a brand new IP game at a reduced price, giving it the possibility of being bought by as much people as possible, being appreciated, and then, if the supposed game had a great success, it can see a sequel, this time at full price because now the customer knows that game and he knows he can have fun with that. So, Nintendo (or the whole industry, for that matter) should work with production lines in order to make it as available to flexibility as possible.
2.Selling parts of the game digitally
You are a single player gamer / someone who would like to play just the campaign mode of a game, without any multiplayer component, but you still have to spend 39.99/59.99 for the whole package that includes the part that you don't want.
You are someone who loves multiplayer action, don't bother with campaign mode, but you still need to pay the full price for the full package.
Two opposite situations, the same problem: forcing the customer to buy a part of the game he doesn't want / like.
And, because of that, there are customers that decide to not buy that game, because there's a part that they don't consider as valuable.
The solution to this would be allowing developers to sell parts of their games on the digital store. Selling the campaign mode for a specific price and the multiplayer mode for another specific price would enlarge the customer base for many titles. Giving customers as much options as possible (without doing the opposite error: giving too much options, leaving him confused about what to do) is the key. It would mean further pricing flexibility, rise in digital spending, rise in game sales in general.
P.S. COD at 39.99/59.99 --> each part NOT for 19.99/29.99, but for a little more, like 24.99/34.99, in order to make the complete package appear as a bundle at a discounted price, and so letting it remain attractive for all the others who don't bother in paying even for components they don't care too much.
3.Allowing Amazon, Game.com, Gamestop.com, etc.etc., to sell digital SKUs at their prices
Basically, what Sony is doing right now on Amazon.com and what Nintendo started earlier last year on Game.com: selling digital versions of retail games at the prices on Amazon. So, digital versions being part of the same deals on those sites.
4.Digital versions of games being priced lower
Another focal point. And another problem of the whole industry. Game prices are high, but digital game prices are even higher, by being as much as the retail prices (or even more...hello EA and Activision). There is a difference in the digital SKU: there's no physical cart, no production cost for that, no case costs, no transport cost. It can't be priced as much as the retail version. What they should do is letting developers putting digital versions at between 5 to 10$ lower prices compared to their retail versions (with 10$ being far more preferrable). This is actuall something that, more or less, is happening in Japan: more and more games are priced lower in digital versions compared to their retail SKUs (on 3DS, the discount is usually around 500 Yen. Last case in point: New Love Plus+, 5,700 retail and 5,200 digital). However, here there's a "problem": retail stores fear digital rise. They fear that they could lose a massive share of the market if digital versions beat them in prices. But, actually, I think there could be an easy solution for that...
5. ...even in retail stores
Let the Gamestops, Game, Argos, Best Buy, etc.etc. of this world sell the download codes of games at the same reduced prices! Download cards have much less inventory costs than physicial cases with cartridges in them, so selling them at reduced prices shouldn't negate their revenue at all. It's simply giving customers a choice.
If they like to possess the physical version, and want to play immediatly, they pick up the retail version.
If they like the game, but want to buy it at less, and they're not afraid of waiting for downloads, then they pick up the download card.
Download cards could be made "attractive" with great cover arts, too. And, actually...what if, in cases of extreme shortages where not even download cards are available, retail stores themselves can produce a limited amount of download cards?
It could be done like this: a specific Nintendo site, where you log in (name, surname, name of the chain and store), and you can purchase a specific amount of supplementary codes that can be printed on leftover cards with no code? This is pure theory, but think about this possibility for retailers and their sales. Much better than just have to wait for new shipments, that could come too late, when the demand is slowing down,right?
6....Even for parts of the game
Basically, the second point I described, but applied in the retail stores as well. This would certainly help stores in not feeling ignored when games are offered also in separate parts in the digital stores. And give customers a broader selection of choices even in retail stores.
7.Letting customers start the download right in the store
The web version of PSN lets you buy a game, and then you can actually start the download from there on your PS3. And that's great. And how can this be combined with selling digital download codes in stores? With a terminal where you log in with your account, put your code and...the download starts immediatly on your console. It could also be used for charging your digital store wallet by typing codes of 10/20/50$ download cards, and for letting people give a look at the digital only lineup. With app versions of the store, it could sound a little redundant, but it would be useful in cases when the smartphine connection doesn't work / is slow, and as something that let every kind of customers (especially the most casual one) see the digital only offering and start downloads even before they're back at home.
I think I put in the biggest points I wanted to share. If I come up with other ideas, I'll put them in the OP. Now, it's time to discuss about what you would do on this subject. Time to discuss!
