Content Dictates Price, So Don't Expect Cheaper Digital Games

THQ CEO Brian Farrell sees a future in a number of alternative business models for games -- free-to-play, digital distribution, and what THQ's doing with MX vs. ATV Alive (releasing a $60 game for $40 and offering tons of DLC). One of the most common complaints about digital games from the customer-side of things is that they aren't any cheaper than disc-based games -- only you aren't getting a physical object or the ability to resell it. Unfortunately, THQ isn't about to change that precedent.

Talking about digital distribution in a Forbes interview, Farrell explained its benefits from the publisher's side: The distributor's fee (what's charged by Microsoft on the Xbox Live Marketplace, Apple on the App Store, etc.) is less than what would be paid to retailers and first-parties with a traditional, disc-based release, not to mention the money that is saved on inventory. It saves the company money, to put it simply, though that doesn't mean those savings will be passed along to customers. "With respect to pricing, we evaluate the appropriate price for the games we are delivering, whether digitally or through traditional retail, based on the type and depth of the content," he said. In other words, should THQ feel Homefront is worth $60 on disc, it will cost $60 to download even if costs less to distribute.

When a game is cheaper than $60, as is the case with MX vs. ATV Alive, Farrell wants to avoid having gamers think of it as a "lesser product." He described the game as "an innovative concept based on what we've seen in the free-to-play markets. We're delivering a premium game experience at [a suggested retail price] of $39.99 in order to drive the installed base of users, and then digitally delivering over 100 pieces of downloadable content and an in-game store for micro-transactions, allowing the gamer to customize their experience and pay for the modes that they want to play."

Source: http://www.1up.com/news/content-dictates-price-dont-expect-cheaper-digital-games

Playstation Network Gameboy EA Games IGN Sony PSP Square Enix