EA CEO: Game pricing model will soon be obsolete

Electronic Arts' top dog believes that publishers are going to have to embrace new pricing models, or be left behind.

John Riccitiello, the CEO of Electronic Arts, has said that the gaming industry must think seriously about the current cost of next-generation games.

Speaking to Fortune, Riccitiello questioned how long consumers will be willing to part with $59 or so for a game, and said that he believes that the current pricing model will be obsolete within 10 years.

He said, "In the next five years, we're all going to have to deal with this. In China, they're giving games away for free. People who benefit from the current model will need to embrace a new revenue model, or wait for others to disrupt."

Not surprisingly, the executive also said that he expects EA will be experimenting with a variety of different pricing models in the future.

Riccitiello also slammed the mass media's coverage of video games by saying, "Our industry is exceptionally well-controlled. Every game gets rated... The desire by the media to censor games amazes me."

310 Comments

  • hanisdell

    Posted Apr 18, 2008 1:50 am PT

    Here in Britain games (typically) releases for £39.99 (that's $80). There are obviously exceptions, but I would love to pay £30 (our equlivalant to $60) for a game.

  • LikeHaterade

    Posted Apr 17, 2008 4:29 pm PT

    Pricing on games have really cut me back on the amount of games that I hold for a certain time period. I remember a few months ago, I had Bioshock, Halo 3, The Orange Box, and Call Of Duty 4. I traded them all in to a Gamestop for store credit and got about 120 dollars back. And when I traded them in, I was hammered by the fact that I spent over 240 dollars on 4 games!! I lost 120 bucks. I promised myself I wouldn't let that happen again and I've had 4 games ever since. I know, maybe I should have been more careful and not bought games I would get sick of, but 240 dollars?? It does seem kind of pricey to own the game for awhile just to play and have to pay 60 dollars for it. Is gamefly the answer?

  • Krossboy

    Posted Apr 15, 2008 6:29 pm PT

    you can argue inflation, but the fact is that cd's, dvd's and even blu-ray discs are all cheaper to manufacture and work with than cartridges. After the N64 games at $60 a pop, the CD and DVD games of the next generation all tended to sell for around $50. This hike back to $60 makes no sense, especially for Xbox360, which is still using DVD technology. If they were using Blu-Ray like some PS3 games, it would be more understandable.

  • therealsarsi

    Posted Apr 15, 2008 7:23 am PT

    yeah, I sold my 360 because of this. maybe if it didn't insist on chomping through 60$ games it'd be worth it. but no reason to put up with this.

  • cas11123

    Posted Apr 15, 2008 4:37 am PT

    I honestly don't see what people are complaining about. We gamers have had it really good in recent years in terms of pricing. Back in the day the Neo-Geo games were like 100-200$ a pop. I don't see how you can complain about 60$ being soooo much. The price has only gone up 10$ in the last 10 years or so. There is such a thing called inflation and frankly we're lucky we're not paying more than that.

    As to the argument of whether a game is worth 60$ or not is a completely different story. But then, that's why places like gamespot exist. They give us reviews of the game so we can make an informed decision as to whether or not we're willing to pay that much. I have never felt cheated cause the game wasn't what I expected it to be.

    Now I'm not saying I wish they would raise the prices more. I too have been spoiled by my 50$ price tags (still am being a PC Gamer =P), but I can understand from a business perspective where this is coming from. It's not exactly cheap to make a video game, especially the talent who make the games that are worth 50-60$.

    HOWEVER, this is EA that we're talking about, and since they don't seem to invest in said talent, chugging out the same bugged crap every year... they don't really have the right to say that the current business model should be chucked out the window in favour of higher prices.

  • Ben-e

    Posted Apr 15, 2008 4:16 am PT

    Is the way forward bigger hard drives and making all games available via digital download? That'd save a lot of money in distribution and the retailer's cut.

  • Ailith

    Posted Apr 15, 2008 2:47 am PT

    To be honest I don't shop at places like Gamestop anymore for this reason. New games are way too expensive and even if you wait a while or buy something used its more expensive than it should be. Now that I am older and am paying for video games with my own money (as opposed to my parents when I was younger) I find waiting for a few weeks and then buying a used copy at Game crazy works much better for me.

    As for why people pay so much attention to video games, I addressed in another post about whats going on in Minnesota. Its been going on forever and it will always go on. It used to be comic books, TV, swing dancing, etc. My grandmother actually told me that when she was younger she remembers parents of teens being upset that they would listen to Buddy Holly, because apparently his music "sounded too black". Buddy Holly? Are you kidding? You get the point though. People and politicians distract themselves with stupid issues just so they can point a finger and blame something for all of their problems. Maybe they'd be better off looking in the mirror. As if any politicians anywhere know whats good for todays youth...

  • Pilch_R_eD

    Posted Apr 14, 2008 6:16 pm PT

    Pfft, you think $60 US is a rip. People in AU have been getting taken for a ride for a long time now. Average game price here is $90 - $100 AU. $80 for a slightly lesser game and generally $110 for special ED. Personally I think $50 - $60 US is fairly reasonable for the ammount of gameplay you get, as telepathy stated, i agree completely. But whats going on in this country is blatent Exploitation! But I think in time somethign should be done to drop prices everywhere. The average gamer, especially hardcore gamer, imo, like me, just cant keep affording to pay for this, I feel like im being robbed. Hell, if they lowered prices they would still be getting as much from me as they are now, id just have a few more games for my dollar.

  • greystone227

    Posted Apr 14, 2008 4:57 pm PT

    telepathy, I totally agree. Media in general is overpriced, including games. However, games are definitely the best deal.

    I mean, consider a 4GB ipod. At approximately 4MB a song, it'd take $1,024 to fill that thing up. And people wonder why so many kids use Limewire these days.

  • telepathy

    Posted Apr 14, 2008 4:09 pm PT

    In some ways gamers are kinda spoiled in terms of prices in comparison to other forms of entertainment. Look at music, people are paying $1+ just so they can listen to some 2-5 minute song, WTF is that?. Movies gouge you for $6-12 to watch some movie (or even pay $8-30 for a legitimate, physical copy ) for about 1.5-4 hours of entertainment. At the very least, a decent game you enjoy can consume 10-100+ hours for only a measly $50-60 ? I'm not saying paying this much is so great, or really that affordable for most people, but at least consider that the game industry spends out its ass just to bring to us these highly-engrossing, time-consuming, interactive forms of entertainment. Gaming still gives you the best bang for your buck in terms of digital entertainment, ask all the WOW users.

  • VenomRitual

    Posted Apr 14, 2008 4:08 pm PT

    i missed when new games were 50$ and than a year later they were $20. but yeah. i've always believed that $60 for a game is a total rip if it doesn't give u constant satisfaction.

  • edmakel

    Posted Apr 14, 2008 11:35 am PT

    cleanslate1982 ......I couldn't have put it better myself. enough said..

  • cleanslate1982

    Posted Apr 14, 2008 10:48 am PT

    I've got to say I totally agree with his assessment. Pretty soon they are going to have to drop the price at least $10. Also, why does the media and politics care so much about video games. I guarantee if you asked every American citizen if they think there should be further censorship over video games, a small percentage would say "Yes"; you ask those where they'd rank it's importance among other issues and I guarantee a smaller percentage of those would have in the middle of the stack of things to do or higher. I'd go as far as to say that Video game censorship is a major issue for anywhere between .1%-.01% of the people. By major issue, I mean something that needs to be taken care of "right now" or soon. To think that states like Minnesota keeps spending mass amounts of tax dollars to censor video games (which each law they pass is deemed unconstitutional, and they file it up to appeals) is beyond me. Especially since most people who have a problem with video game content, wouldn't put the importance of censoring them above ending the occupation of Iraq, universal health care, improving class rooms and text books, and creating more jobs.

  • GonzoGuy

    Posted Apr 14, 2008 9:40 am PT

    I don't think we're going to see prices drop. Not while gamers continue to shop at places like gamestop and prove that they're willing to be ripped off.

  • RLJSlick

    Posted Apr 14, 2008 8:50 am PT

    Same here, I've gotten only about half the games I normally get, because of pricing. I think it's nuts to charge that much, specially for the younger games that may not have that much money at hand. There is no way I buy games by just looking at the box. I do real research on what I want to buy. I shouldn't be that way.

  • p0rkp1e74

    Posted Apr 14, 2008 8:33 am PT

    i usually wait for at least a couple of months when the prices start dropping unless it is a game i just can't wait for which only happens around Christmas these days....except GTA IV of course!!!

  • Slayer420

    Posted Apr 14, 2008 8:05 am PT

    The $60 per game price has definitely led me to be very choosy with my purchases. I basically only buy the triple A titles now because I don't want to get burned with a bad or mediocre game. Now if the prices would drop to $30-40 I would be much more inclined to try some different games out without waiting for weeks or months after release to let all the reviews really come out.

  • orangemonkey223

    Posted Apr 14, 2008 7:33 am PT

    If games were cheap ( between $20-$40) i would be willing to spend way more on games just because it's not as bad if a game you buy is'nt very good because you didn't pay $50-$60 for it.

  • Avenger1324

    Posted Apr 14, 2008 7:09 am PT

    It's kind of ironic reading this statement in the wake of the announcement that Rock Band will RRP in the UK for £180.

  • PTMags

    Posted Nov 7, 2007 1:13 am PT

    I don't know about $10-15 for a game, but i'd say ~$25-30 is reasonable. Especially if the game only has 10-15 hours of content or less with little to no replay value, which quite a few games nowadays do. I think it's a little absurd to pay between 50 and 60 dollars for a game you can beat in a couple of days of moderate (3-4 hrs a day) play and then never touch again probably. But I guess that's why console gamers have Blockbuster...PC gamers, well, there's always bittorrent heh.

    Don't let this guy fool you into thinking that EA is turning over a new leaf though, a giant publishing monopoly such as EA would benefit most from a price reduction. This has nothing to do with the consumer.

  • gcps2master

    Posted Nov 7, 2007 12:19 am PT

    true, but the chinese games are unreliable, my friend got 3 for $15 and only 2 worked. Making games too cheap will make big losses for companies and they won't risk dropping prices. If they made $59 games $39 now instead i think that would be okay, as they'd be more affordable and still giving companies profit

  • wiidominance

    Posted Nov 6, 2007 11:59 pm PT

    this guy speaks the truth, the pricing model is stupid as it is, I was thinking about this for a while, here is one quick example: Wouldn't you get all of the following titles if they were priced at 10-15 bucks: Crysis, call of duty 4, assassin creed, Timeshift, super mario galaxy ?(instead of choosing because of budget) this will roughly be the same price as 1 or 1.5 title right now. Now don't tell me that you will get them even if they were 50-60$ anyway because you can afford it, the vast vast majority of people CAN'T! GET IT RIGHT games are not cars, its not like you gona buy "one" game and then feel that you've had enough. Games are products like garments, you consume them, when you had enough it and don't want it wear it anymore, you want to get a new shirt, a lot of gamers don't want to make a choice between games, if they had the money, they will get them ALL. Basically what I'm trying to say, if games were priced @ 10-15 dollars, not only it will be possible to counter piracy effectively, but also, it will return a higher financial incentive to publishers believe it or not, i.e. More Profit. because instead of selling 100k units @ 50$ = 5 mill $ in revenue, publishers will sell 1 mill @ 10$ = 10 mill in revenue. If you give it a quick though, it all makes sense. Especially when a shooter that lasts 8-9 hours @ 60 bucks doesn't make a lot of sense.

    PEACE^^

  • roryk666

    Posted Nov 6, 2007 5:50 pm PT

    ea r my fave developer and they make the best games ever. i love you ea. please make an ea console

  • articunocc

    Posted Nov 6, 2007 2:32 pm PT

    lol the prices arent going down, instead they should keep the prices and give us better content

  • afrothunda312

    Posted Nov 6, 2007 9:08 am PT

    as all next gen consoles are able to connect to the internet, the publishers should be able to sell them digitally over whatever online network, psn, xbox live, etc. It would deliver the product direct to the consumer and cut out the shop - I think direct transactions would be beneficial - they did it with calling all cars, right? and isn't liitle big planet doing the same?

  • eayoshi

    Posted Nov 6, 2007 8:43 am PT

    When FFIII for SNES first came out, I paid $84 (inclusive of tax) dollars for it. It was expensive for games to have 24MB of ROM and a battery back up. Street Fighter 2 for SNES cost $74. And forget it if the game had 32MB (like Chrono Trigger). Way before that, I bought Super C for my Nintendo and paid $64 for it, including tax.

    There was no eBay or widely spread Internet to get the games from elsewhere - you were confined to your local stores. There was also no such thing as 'platinum hits' 'best sellers' etc - the only games that were under $20 were the ones that no one bought.

    If you factor in inflation, etc, today's games are actually cheaper than they were - they're the same retail price. But I agree that game media is going to go away sometime in the future in favor of direct Internet distribution. If you want proof, just look at the music industry. Look at how many people said that would never happen.

    The framework's already here - systems with 40+GB hard drives, online connectivity. Heck, XBLA and Virtual Console are already doing that. When IPv6 and Gb internet hits the states widespread, it will be a no-brainer.

  • RAPJR

    Posted Nov 6, 2007 8:15 am PT

    "how about online distribution? it would cut costs of packaging, storage and distribution"

    That only really works for games that are download-only. Look at Orange Box - 50 either way for PC (download or box) and still 60 for X360 and PS3 (after the pre-order discount goes away) in packaging. With big titles it's really not going to matter if it's available for download, some people will still want a physical disc. That and companies won't be willing to part with the extra cash they could be bringing in by making it a higher price. At least not until someone else takes the first step and does it.

    I think we'll see the current pricing scheme (~40 for PC, ~50 for PS2/Wii, ~60 for PS3/X360, various for the XBLA and VC games, etc.) for a while still. And depending on next generation's media and distribution capabilities, it might even continue to rise. Hopefully not, but that's definitely a concern that we'll be facing again in the next few years.

  • PTMags

    Posted Nov 6, 2007 12:41 am PT

    EA is the devil, not even Bioware/Pandemic could resist the lure of the darkside.

  • klactose

    Posted Nov 5, 2007 10:33 pm PT

    Neo-Geo games used to be over a hundred dollars a piece

  • vonderheezy

    Posted Nov 5, 2007 9:22 pm PT

    "I don't know about you, but I remember paying $19.99 as a standard price for Genesis cartridges. What the hell kind of exotic imports were you buying?"

    I remember paying at least $80 for one or two N64 games, and they weren't over-priced imports.

  • gipper07

    Posted Nov 5, 2007 8:45 pm PT

    "I remember back in the 90's when some games used to cost as much 90 dollars lol,now that was insane"

    I don't know about you, but I remember paying $19.99 as a standard price for Genesis cartridges. What the hell kind of exotic imports were you buying?

  • Lumenadducere

    Posted Nov 5, 2007 8:34 pm PT

    I'm really hoping that Riccitiello is truly the guy he seems to be and that he's carrying the beast known as EA towards a better future that has less deplorable business practices.

  • Filaki

    Posted Nov 5, 2007 5:12 pm PT

    how about online distribution? it would cut costs of packaging, storage and distribution

  • NandoSupes

    Posted Nov 5, 2007 5:11 pm PT

    thats a good point,but heres another one.the reason games cost 60 bucks a pop, is because it cost developers millions of dollars to develop a game in the first place.you think they are going to lower the price anytime soon?,no way.they need to make a profit too.I know theres games that are not worth 60 dollars, but some games are,and those are the ones we should buy .I remember back in the 90's when some games used to cost as much 90 dollars lol,now that was insane.

  • matrixman2k

    Posted Nov 5, 2007 12:29 pm PT

    Son i always paid full price for the games that i really want and must have in my collection. If i think a title deserves the cash i'll pay for it and get it on release date.

    Others i'll get off ebay or secondhand - depending on the desire and so on example, i always get my FF titles on release sometimes even on import (U.S) - in that case i am made to pay a premium for the privilege. Still i don't care, i must start a save ASAP.

  • WeeklyReader

    Posted Nov 5, 2007 11:34 am PT

    gutastef, that depends on how you game. Many gamers don't have the time to run from game to game, completing them and then rarely returning to it. Many gamers play only on the weekends and enjoy playing the same game over and over. Should they pay $15 for 8 days play on a couple games.

    Before you say "well they're not real gamers" remember that real life circumstances dictate how we game, and the older you are, the less time and resources you have to contribute to recreational activities. The Wii has shown how numerous these casual gamers are.

    Additionally, remember that financial climates differ from region to region. A person may only be able to afford one game all year at $60, but he or she could get that game in December and play it for the entirety of the year until next December. While a $15 a month charge may unfairly limit him or her to only playing 4 months out of the year.

    You noted that the $60 scheme will still be around at the time this may be implemented, and I hope it is.

    Well this is all speculation anyway based on dreams from one company's CEO.

  • NinjaMunkey01

    Posted Nov 5, 2007 8:18 am PT

    Games do need to get cheaper. Some are not worth 40-45 puounds. They should put it down to 30-35 pounds instead like with ps2 games. the only games I have played worth 40 pounds were Oblivion, GOW and rainbow six vegas. Others I would rather pay 30 pounds for.

  • gutastef

    Posted Nov 5, 2007 5:00 am PT

    A lot of people are renting the games - and this (along with second-hand market) is very upseting for games puplishers, since they feel they dont get enough from thier IP's.

    The monthly subscription would rectify this, as it would erase this "rental" channel also.

    For people that would like the old classic "buy your copy for ever" scheme - rest assured it will not disappear. It may appear cheaper to fork 60 $ for a game than 15$ a month, but this is true only for ONE GAME. Try substituting ONE game with ALL THE GAMES EVER and 15$ a month is very-very cheap.

    With this monthly subscription we will not have a FIFA or Madden each year - rather EA will try to make monthly/weekly upgrades to keep you interested all the time - and this is better for us and also for them.

    We will also have games that are released with 2-3 levels only, and - if there is interest, more levels will follow. This is great news for devs - since they dont have to put up a whole game on the market only to find out that everybody think it suck. It's also great news for us, since we dont have to spend 60 $ for a game that can suck big time.

  • Bronson2k3

    Posted Nov 5, 2007 3:26 am PT

    this comes from the same buttholes that bought out the NFL license after NFL2K5 was $20 and sold way better than crap arse madden...EA sickens me and i hope it does all u peeps as well trying to monopolize on our games we play and how we go about buying em... Boo at EA

  • GrimBee

    Posted Nov 5, 2007 3:19 am PT

    Nobody really pays full retail price for a game. Alot of stores do trade-ins. Alot of stores have more sales of games because of the sheer amount of stock to sell.

    I mean, Sonic for the 360 (darn I hate even to write the name of this infernal game..) cost me £39.99 from Game. TWO WEEKS LATER it was in gamestation for £24.99..

    Games constantly drop in price, and the sheer amount of games that are released in different price ranges give people alot of choice. EA only are saying this because of the FIFA and MADDEN games, each new release overshadows the last version and strips them from the shelves because they are "outdated".

    Gamecube games were really cheap before, but now that the Wii is out, gamecube games have gone up in price. And this is because of the demand of the game.

    EA know that a new fifa game will overshadow the last one, and so they charge full price for the new one.

    You would think that with the new generation of consoles, a sports title would only need to update the music, roster and any graphical improvements over an internet connection, adding or replacing files from the previous game - not releasing an entirely new game disc which replaces the last one.

    Nobody pays $59 for a game now, if they like games that is. If you really like a game, you pay that much, and you get alot out of it. One movie after one or two views cost you about £14.
    But a game can be played for weeks and weeks more.

    Infact, the whole point games were expensive before was that they used to be arcade conversions. People thought it was financially better to own the game at home for $50 odd than to churn in coins into arcade games.

    Now the arcade influence is not here anymore - arcades don't push the boundaries of console games, consoles push the boundaries of games.
    So pretty much there is not much of a demand to pay such a high-price, which is why alot of people wait until a price drop (which usually happens quite soon) or trade something in for it.

  • CodingGenius Site moderator

    Posted Nov 4, 2007 7:52 pm PT

    I hate to break it to EA, but with game specialty stores selling used copies of old-ish games for $10-30 below cost and bargain bins at major retailers, the $60 price point hasn't been reality for many people for a long time.

  • f15srcool

    Posted Nov 4, 2007 1:11 pm PT

    Suprising that he would say this, but I totally agree.

  • Jazzism

    Posted Nov 4, 2007 10:12 am PT

    I agree with Shocker, but this has got to be the smartest thing ever stated by EA. They are big a strong enough to change things in the gaming markets though, I pessimistically feel it will not be possitive for the customer in the end. Look at what Sony and Microsoft are doing for their online console gaming and downloaded games, they force just a single player allowed to play. EA is selling ads for their games and passing players information to the ad company like in Battlefield 2142. More is coming.

    In the end I see customers are going to be taken for a ride and the gaming companies are just going to ad more ways to catch the customer.

  • wakko19991

    Posted Nov 4, 2007 4:25 am PT

    pay $60 a game for the neat 10 years?? Why not start dropping prices now. With 80% of releases not being worth $60 anyway adn 90% of those basically beign the same type of game (guns, guns, guns), why not go back to $39.

  • cReePy_CrAwLy

    Posted Nov 3, 2007 8:27 pm PT

    DonutTrooper This is only so true. The reason people illegally download music, videos, games, etc are either two reasons: too expensive or not worth paying for.

    Untrue, we just don't wanna pay for stuff in general. FACT : Humans love free stuff

  • linkthewindow

    Posted Nov 3, 2007 2:23 pm PT

    Im willing to play $100Au for collectors editions of games, but im a PC gamer-and our games are cheaper anyway.

    But, $120 for an Xbox game? No thanks!

  • mooseman721

    Posted Nov 3, 2007 11:17 am PT

    Yeah, great idea. I recently bought warhawk through psn, got the shaft cos we have 4 users in my home and only the purchaser could play! What a crock! If I bought the disk we could have all played. Once bitten, twice shy as they say. (somewhere).

  • DonutTrooper

    Posted Nov 3, 2007 5:28 am PT

    This is only so true. The reason people illegally download music, videos, games, etc are either two reasons: too expensive or not worth paying for. Since the quality with a lot of games I play are good, the only thing to do to avoid pirating is to lower the price 10, maybe 15 dollars.

  • ShockerX01

    Posted Nov 2, 2007 8:10 pm PT

    Typical. Coming from EA. Don't trust EA dudes. They're borg and assimilate everything. Plus releasing unfinished games for profit and using "exansion" to "make it up."

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