Reuters EXPOSES the *real* price of 360 games. Oh SNAP!

LOS ANGELES, May 22 (Reuters) - New charges for online extras are sharply raising the price serious video gamers pay for Xbox 360 games, a profitable move by Microsoft Corp., but one that could alienate some fans. With more than 6 million users, Microsoft's Xbox Live online network has become the key feature distinguishing the Xbox 360 from rival Sony Corp.'s Research PlayStation 3 and Nintendo Co. Ltd.'s Wii.

More than 3 million Xbox Live subscribers pay a $50 annual fee that allows them to play games online against one another. About 3 million more use the service without an annual subscription, taking the total to more than half Xbox users.

Through Xbox Live, players can buy maps for fighting terrains and other add-ons that are indispensable to serious gamers, usually at a cost of $10 each. Such add-ons used to be free most of the time and the additions can raise a game's cost to $80 or even $100 over its life span . "The (downloadable maps) are very profitable for us," said Tony Key, vice president of marketing for UbiSoft Entertainment SA, whose Tom Clancy-themed shooters such as "Rainbow Six" and "GRAW 2" are among the most popular games on Xbox Live.

"If you're a 'Rainbow' guy and you don't have the maps, then you can't play a match," said Key, referring to online competitions. "I doubt there will ever be a Clancy game without the Xbox Live component any more. It's now a key part of the game's DNA."

Games such as UbiSoft's "Rainbow Six Vegas" and Activision Inc.'s "Call of Duty 3" can cost as much as $25 million to make, but extra game levels and maps are extremely cheap to produce, by comparison. Key said they required only about 10 percent of a game's development staff.

Maps and other content are also profitable for Microsoft.

Wedbush Morgan analyst Michael Pachter estimates Microsoft charges a royalty rate of 30 percent for most downloads. That means that, for a $10 download, Microsoft gets $3, while the publisher pockets $7.

Pachter estimates the entire downloadable game content market is currently valued at $200 million, compared with $19 billion for overall game software sales last year, but he points out the additional sales have much higher profit margins.

"It's like building an extra room in a house," Pachter said. "It's nowhere near the cost of building the house."

But pricing the downloads is a tricky science that many game publishers, including Microsoft, are still figuring out as they try to balance profit with the risk of alienating gamers who might feel they are being taken advantage of.

Microsoft was criticized by many gamers after the May 3 release of a map download to its popular alien-blasting game, "Gears of War," which has sold more than 3.7 million copies worldwide since its November release.

The first map pack was released for free months earlier and generated more than 1.5 million downloads. The new download included several new battlegrounds online users could fight on during multiplayer matches, but this time they cost $10.

Mark Rein, vice president of "Gears" developer Epic Games, said in an interview on video game Web site 1up.com that the studio would have preferred to give away the maps, but Microsoft, which published the game, decided to charge for it.

This set off angry complaints from fans who felt Microsoft was taking advantage of them. Epic declined to comment for this article.

Microsoft Xbox Live group product manager Aaron Greenberg said few gamers complained about the add-on features and that the charge helped Microsoft recoup the cost of developing games and running the expensive online service.

"We are like the complaint department. We hear from the small minority that are not happy," he said.

Third-quarter revenue at the entertainment and devices division dropped 18.7 percent to $947 million, with an operating loss of $330 million, compared with a loss of $438 million a year earlier. Microsoft shipped 500,000 Xbox 360 consoles during the quarter.Reuters

Link.

TeamXbox posters are not happy (Link)

Damn shame. I hope the devs on PSN don't follow suit, but it almost seems impossible that they won't, given how money hungry the big devs like Ubisoft and EA are. Still, damn shame. And I'll never forget the GRAW Chapter 2 DLC fiasco. People damn near burned EA down charging 360 owners for the same basic content that PC owners got *at the same time for free*.

We'll see what happens soon enough. Until then...

enjoy the milking, Lemmings.  Cows, don't be suprised if you're next in line. :(

Well this is the price of the next gen of gaming. These multimillion dollar companies aren't just going to give their hardware away, but they don't mind giving the consumers the illusion that they are doing so.iunderstand

PC says otherwise.  If you hadn't noticed, their prices haven't moved an inch. :? 

Whilst I would like free downloadable content as much as the next guy the statement "Such add-ons used to be free most of the time" is entirely false. Such addons simply didn't use to exist for console games. 

 Unless you feel you are somehow being offered less content in games than in previous consoles then this really doesn't represent a rise in cost of games but an entirely new market on top.

[QUOTE="iunderstand"]Well this is the price of the next gen of gaming. These multimillion dollar companies aren't just going to give their hardware away, but they don't mind giving the consumers the illusion that they are doing so.Dreams-Visions

PC says otherwise. If you hadn't noticed, their prices haven't moved an inch. :?

Games on PC have to combat against piracy as well however, plus I don't there is any licensing fee involved in it either.

Whilst I would like free downloadable content as much as the next guy the statement "Such add-ons used to be free most of the time" is entirely false. Such addons simply didn't use to exist for console games.

Unless you feel you are somehow being offered less content in games than in previous consoles then this really doesn't represent a rise in cost of games but an entirely new market on top.

cakeorrdeath

Of course, you highlighted the point without me having to do so. In fact, add-ons DID exist for consoles.  Ghost Recon had them for the Xbox.  Halo 2's were free (or became free eventually).  They weren't there in the past because consoles weren't broadband connected such that updates could be easily distributed.  But now that's not the case.  As such, most of the updates we're paying for are the same updates that the PC now only did, but CONTINUE to get for free.  Some things are fair to charge a bit for...but when the price-gouging begins (GRAW Chapter 2), people can and should take offense.  these practices only become policy when people don't protest.

[QUOTE="Dreams-Visions"]

[QUOTE="iunderstand"]Well this is the price of the next gen of gaming. These multimillion dollar companies aren't just going to give their hardware away, but they don't mind giving the consumers the illusion that they are doing so.iunderstand

PC says otherwise. If you hadn't noticed, their prices haven't moved an inch. :?

Games on PC have to combat against piracy as well however, plus I don't there is any licensing fee involved in it either.

True, but in the case of Epic, they didn't want to charge for ANY of their DLC.  They've NEVER in the history of Epic Games charged for DLC.  

And I don't see how the piracy issue would tie into them making the price of PC games any more or less.  All gaming platforms deal with piracy. 

I don't mean to pun here, but pc games have always had this... in the form of expansion packs. Sims is of course the worst of all, but also games like C&C, hell even everyone's beloved warcraft franchise had it. Of course you can download it for free, but strictly speaking that's illegal. It's the same story for those. I don't really see what all the fuss is about. 11Marcel

Of course, you highlighted the point without me having to do so. In fact, add-ons DID exist for consoles. Ghost Recon had them for the Xbox. Halo 2's were free (or became free eventually). They weren't there in the past because consoles weren't broadband connected such that updates could be easily distributed. But now that's not the case. As such, most of the updates we're paying for are the same updates that the PC now only did, but CONTINUE to get for free. Some things are fair to charge a bit for...but when the price-gouging begins (GRAW Chapter 2), people can and should take offense. these practices only become policy when people don't protest.

Dreams-Visions

Ok but that is an entirely different point. You're saying that because the PC gets them free consoles should also.

Maybe there is a case for that but it doesn't mean console games have got more expensive (though they actually have with the $10 price rise and all).

I thought that unlike PCs, console developers FINISHED a product and shipped it (not so much in the case of Bethesda...), and then if you want to download extra content, keyword: extra, you might have to pay more for it?

Unless that extra content is packaged with the game down the road, there is no milkage. 

[QUOTE="iunderstand"][QUOTE="Dreams-Visions"]

[QUOTE="iunderstand"]Well this is the price of the next gen of gaming. These multimillion dollar companies aren't just going to give their hardware away, but they don't mind giving the consumers the illusion that they are doing so.Dreams-Visions

PC says otherwise. If you hadn't noticed, their prices haven't moved an inch. :?

Games on PC have to combat against piracy as well however, plus I don't there is any licensing fee involved in it either.

True, but in the case of Epic, they didn't want to charge for ANY of their DLC.  They've NEVER in the history of Epic Games charged for DLC.  

And I don't see how the piracy issue would tie into them making the price of PC games any more or less.  All gaming platforms deal with piracy. 

[QUOTE="iunderstand"]Well this is the price of the next gen of gaming. These multimillion dollar companies aren't just going to give their hardware away, but they don't mind giving the consumers the illusion that they are doing so.Dreams-Visions

PC says otherwise. If you hadn't noticed, their prices haven't moved an inch. :?

[QUOTE="iunderstand"]

Games on PC have to combat against piracy as well however, plus I don't there is any licensing fee involved in it either.

Dreams-Visions

True, but in the case of Epic, they didn't want to charge for ANY of their DLC. They've NEVER in the history of Epic Games charged for DLC.

And I don't see how the piracy issue would tie into them making the price of PC games any more or less. All gaming platforms deal with piracy.

Do publishers have to pay Microsoft royalties for downloadable content? If yes then this is probably just a method for Microsoft to profit off of the 360.

And the difference between PC and console piracy is that console publishers have the luxury of having Microsoft patch the console to block out pirates. 

[QUOTE="11Marcel"]I don't mean to pun here, but pc games have always had this... in the form of expansion packs. Sims is of course the worst of all, but also games like C&C, hell even everyone's beloved warcraft franchise had it. Of course you can download it for free, but strictly speaking that's illegal. It's the same story for those. I don't really see what all the fuss is about. Dreams-Visions

[QUOTE="Dreams-Visions"]

[QUOTE="iunderstand"]Well this is the price of the next gen of gaming. These multimillion dollar companies aren't just going to give their hardware away, but they don't mind giving the consumers the illusion that they are doing so.AfterShafter

PC says otherwise. If you hadn't noticed, their prices haven't moved an inch. :?

fair enough.  so do you think the $80-$100 price tags for console (360....maybe PS3) games is reasonable?  I guess if everyone think it's fair, then there's no point even discussing it?

Whilst I would like free downloadable content as much as the next guy the statement "Such add-ons used to be free most of the time" is entirely false. Such addons simply didn't use to exist for console games. 

 Unless you feel you are somehow being offered less content in games than in previous consoles then this really doesn't represent a rise in cost of games but an entirely new market on top.

cakeorrdeath

Good point. I can understand charging for content that causes the developer to lose resources; Like how GeOW maps cost now/free later. I don't believe they would have done that if it had'nt cost someone something be it on the publishers end or the developers end.

[QUOTE="AfterShafter"][QUOTE="Dreams-Visions"]

[QUOTE="iunderstand"]Well this is the price of the next gen of gaming. These multimillion dollar companies aren't just going to give their hardware away, but they don't mind giving the consumers the illusion that they are doing so.Dreams-Visions

PC says otherwise. If you hadn't noticed, their prices haven't moved an inch. :?

fair enough. so do you think the $80-$100 price tags for console (360....maybe PS3) games is reasonable? I guess if everyone think it's fair, then there's no point even discussing it?

[QUOTE="Dreams-Visions"]

Of course, you highlighted the point without me having to do so. In fact, add-ons DID exist for consoles. Ghost Recon had them for the Xbox. Halo 2's were free (or became free eventually). They weren't there in the past because consoles weren't broadband connected such that updates could be easily distributed. But now that's not the case. As such, most of the updates we're paying for are the same updates that the PC now only did, but CONTINUE to get for free. Some things are fair to charge a bit for...but when the price-gouging begins (GRAW Chapter 2), people can and should take offense. these practices only become policy when people don't protest.

cakeorrdeath

Ok but that is an entirely different point. You're saying that because the PC gets them free consoles should also.

Maybe there is a case for that but it doesn't mean console games have got more expensive (though they actually have with the $10 price rise and all).

yea, that was the direction I was going. Not that I even necessarially agree with that line of thinking...I think it's a fair chain of thought...but bah...who am I kidding? I'm just looking to debate. :P

[QUOTE="AfterShafter"][QUOTE="Dreams-Visions"]

[QUOTE="iunderstand"]Well this is the price of the next gen of gaming. These multimillion dollar companies aren't just going to give their hardware away, but they don't mind giving the consumers the illusion that they are doing so.Dreams-Visions

PC says otherwise. If you hadn't noticed, their prices haven't moved an inch. :?

fair enough.  so do you think the $80-$100 price tags for console (360....maybe PS3) games is reasonable?  I guess if everyone think it's fair, then there's no point even discussing it?

The way I see it:

Last generation I was paying more for console games than PC games and they were getting free downloadable content that I had no access to.

This generation I am paying more for console games and we are both getting extra downloadable content but only I have to pay.

Whilst the situation is obviously still far from ideal, it is an improvement.

I think on the software side of PC gaming will always have the price advantage simply because development costs are cheaper and there are no royalties to be paid to the platfrom holders to distribute your game and/or release extra content. 

I thought that unlike PCs, console developers FINISHED a product and shipped it (not so much in the case of Bethesda...), and then if you want to download extra content, keyword: extra, you might have to pay more for it?

Unless that extra content is packaged with the game down the road, there is no milkage. 

SemiMaster

Thats how I see it, how Limited Editions Versus Standard Editions work is sort of an example. You wan't the game then just buy the game at regular $60, if you want the extra content then you fork over an extra $10. Why would you get charged the same/or nothing for extra, probably unfair to loyalist but it makes perfect sense on a business end.

I think at this point Cows and Lemmings should switch names. That makes a lot more senseGunSmith1_basic

Why?  This is going to happen on the PS3 as well.

The way I see it:

 

Last generation I was paying more for console games than PC games and they were getting free downloadable content that I had no access to.

This generation I am paying more for console games and we are both getting extra downloadable content but only I have to pay.

Whilst the situation is obviously still far from ideal, it is an improvement.

 

I think on the software side of PC gaming will always have the price advantage simply because development costs are cheaper and there are no royalties to be paid to the platfrom holders to distribute your game and/or release extra content. 

cakeorrdeath

Good point. I can understand charging for content that causes the developer to lose resources; Like how GeOW maps cost now/free later. I don't believe they would have done that if it had'nt cost someone something be it on the publishers end or the developers end.

Maps don't cost anything to make.

I've spent more than I would like to know on Oblivion. :(BioShockOwnz

Good point. I can understand charging for content that causes the developer to lose resources; Like how GeOW maps cost now/free later. I don't believe they would have done that if it had'nt cost someone something be it on the publishers end or the developers end.

Stabby2486

Maps don't cost anything to make.

Next-gen costs are high, its good to see them pulling revenue back, but these downloads are nowadays compulsory if you want to get into online games, which sucks. 

[QUOTE="GunSmith1_basic"]I think at this point Cows and Lemmings should switch names. That makes a lot more senseCorvin

Why?  This is going to happen on the PS3 as well.

[QUOTE="Corvin"]

[QUOTE="GunSmith1_basic"]I think at this point Cows and Lemmings should switch names. That makes a lot more senseGunSmith1_basic

Why? This is going to happen on the PS3 as well.

I would be totally shocked and awed if devs like Ubisoft and EA didn't continue their milking ways on the PS3.  I am suprised Microsoft-owned games like Gears got "premium" content.  But thena again, I'm suprised they didn't stick with their stance that all Microsoft-published games would cost $50 as well (Gears went for $60, as did Crackdown).  

I don't know what to think, which is part of the reason I brought this topic here.   

People here seem to think that because you paid for a game that all updates and add-ons should be free? Nothing is free. Buy it or don't. This is another source of revenue for gzaming companies, and I am glad to see them making money. Maybe it'll eat into their piracy losses.farrell2k

Nothing is free?  Do you game on PC?  Many of the updates that 360 owners have been charged for (chararcter updates, weapons, maps, difficulty updates) come for free on the PC.

Go look up the GRAW Chapter 2 pack controversy.  The reason it was such a big deal was because:

1.) Every part of that pack was launching on the PC *AT THE SAME TIME*.  For 100% free.  In fact, the PC update included more.

2.) The game itself was already $10 more

3.) People who refused to pay the $10-$15 for the update could no longer play with their friends who *did* buy the update.

[QUOTE="GunSmith1_basic"][QUOTE="Corvin"]

[QUOTE="GunSmith1_basic"]I think at this point Cows and Lemmings should switch names. That makes a lot more senseDreams-Visions

Why? This is going to happen on the PS3 as well.

I would be totally shocked and awed if devs like Ubisoft and EA didn't continue their milking ways on the PS3.  I am suprised Microsoft-owned games like Gears got "premium" content.  But thena again, I'm suprised they didn't stick with their stance that all Microsoft-published games would cost $50 as well (Gears went for $60, as did Crackdown).  

I don't know what to think, which is part of the reason I brought this topic here.   

I'm still in it for the great games coming out for it though. You just have to steer clear of marketplace, and you're fine (except for the free stuff). Anyways, weren't cows called cows because they kept repeating the same arguments over and over again, like cows eat grass multiple times? Also, sheep can also be milked :P. 

No one is forcing you to pay for the extra content. You can always play on the maps you already have.85070537783

No one is forcing you to pay for the extra content. You can always play on the maps you already have.85070537783

that was true until the new Halo 2 update and last year's GRAW Chapter 2 update.  If people on your list got the update, you could simply no longer play with them.  PERIOD.  And with the Halo 2 update, if you don't buy the update (the one that just came out), you can't play MOST of the multiplayer modes anymore.  

In effect, not buying the update limits what you can play.  NOT cool. 

Good point. I can understand charging for content that causes the developer to lose resources; Like how GeOW maps cost now/free later. I don't believe they would have done that if it had'nt cost someone something be it on the publishers end or the developers end.

Stabby2486

                      

Maps don't cost anything to make.

That makes no sense. While they have staff working on maps for GeOW they could have been producing UT3, the longer a project stays off the market the more it will cost developers resources.

Live actually costs about 70euros over here /year ,thats roughly $92USD.

And guess what, the downloadable stuff is more expensive for us Europeans too.

Have a nice day. 

[QUOTE="iunderstand"]Well this is the price of the next gen of gaming. These multimillion dollar companies aren't just going to give their hardware away, but they don't mind giving the consumers the illusion that they are doing so.Dreams-Visions

PC says otherwise. If you hadn't noticed, their prices haven't moved an inch. :?

Their price increases are in the form of rebuilding your pc every couple years to keep up with the game technology. 
newgames128

Whilst I would like free downloadable content as much as the next guy the statement "Such add-ons used to be free most of the time" is entirely false. Such addons simply didn't use to exist for console games. 

 Unless you feel you are somehow being offered less content in games than in previous consoles then this really doesn't represent a rise in cost of games but an entirely new market on top.

cakeorrdeath

Yeah, I was about to note the same thing.

[QUOTE="AfterShafter"][QUOTE="Dreams-Visions"]

[QUOTE="iunderstand"]Well this is the price of the next gen of gaming. These multimillion dollar companies aren't just going to give their hardware away, but they don't mind giving the consumers the illusion that they are doing so.Dreams-Visions

PC says otherwise. If you hadn't noticed, their prices haven't moved an inch. :?

fair enough. so do you think the $80-$100 price tags for console (360....maybe PS3) games is reasonable? I guess if everyone think it's fair, then there's no point even discussing it?