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Analyst: Activision Price Hike is a "Test" of Consumers

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Analyst: Activision Price Hike is a "Test" of Consumers

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Industry analyst Michael Pachter says Activision's recent decision to jack up the price of Modern Warfare 2 in the U.K. is a test to see how far it can push consumers.

Activision revealed last week that it will be charging £54.99 (roughly $90) for the standard edition of Modern Warfare 2 in the U.K., a substantial increase over the usual price point for major game releases. High development costs and a weak British currency were blamed for the hike but Pachter says the reality is something entirely different.

"The price increase is a business decision," he said, noting that the British pound is worth more now than it was when Call of Duty: World at War was released in November of last year. "Activision knows it has a 'hot' game, knows that the market will pay an additional 10 per cent, and has decided to increase price accordingly."

"My guess is that this is a one-time test for Activision, and that they will re-think the strategy after seeing if it angers consumers," he continued. "If there is no consumer backlash, I think we may see higher pricing on other games, regardless of the GBP/USD translation rate."

Despite how nefarious it all sounds, Pachter said the higher price isn't necessarily unjustified. Games today are cheaper to buy, he said, but contain increasingly advanced technology, better gameplay and improved online functionality which Activision has to pay to provide. He also pointed out that other upcoming Activision games like Band Hero, DJ Hero and Tony Hawk Ride will be more expensive than their predecessors across all platforms.

"The repercussions [of the Modern Warfare 2 price increase] could be significant and lasting," Pachter said. "If Activision is successful, we may see increases for other 'hot' games in the future. We see tiered pricing to the downside for more casual games, so why not tiered pricing to the upside for hot games?"

Source: Eurogamer

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So, they're being jerks?
For once in my life, I'd be OK with other people pirating the game.

Alright then, I definately won't be buying this... I don't care how good it is, a stand MUST be taken somewhere or they'll keep gouging us.

I'm American, but I still think that this is dumb. It's a situation where Activision is doing something no one wants because they can.

This is not going to end well.

Unless I'm mistaken, his argument is basically "They're going to see how much they can leech off of them before they start noticing how much they're getting ripped off. If it turns out they actually prefer paying less as opposed to more, they'll back off, unless they object only a little."

This angers me greatly. If it wasn't for the prestige edition with the night vision goggles i would most definately not be buying this game

And 2 weeks after the release, Activision will shout:

"BOO HOO WE DIDN'T GET A PROFIT BECAUSE EVERYONE PIRATED THE GAME!! IT'S ALL THEIR FAULT!"

They should know after AoC and countless EA sport games that "testing" consumers can be a VERY bad thing.

$90 = 320 PLN

I can get an E6300 @ 2.8GHz, for God's sake! So bite my soggy ax.

and they wonder why Used Game Sales are on the rise... maybe they should stop RIPPING PEOPLE OFF and more people would by new.

Push and piss off the loyal fans who spend billions on games

Great tactics Activision

EMFCRACKSHOT:
This angers me greatly. If it wasn't for the prestige edition with the night vision goggles i would most definately not be buying this game

You probably still shouldn't buy it, the "night vision" goggles are just a shiny distraction to make you forget about the rip off price.

Pre-Order/Collectors Edition bonuses are the Opiate of the Gaming Masses!

Sonofa..... Hey Activision, GO BURN IN HELL

90 Bucks!?! Are they barking mad? Holy cow I certainly hope no one purchases this...

It's like I said all along since the increased cost of video games for the 360 and PS3 and downloadable content. The current business leaders in the video game industry are bleeding the consumer base dry. Imagine buying Call of Duty 6(MW2) for ninety dollars UK and then buying downloadable content for an extra 20.

I'm sorry but this generation of business leaders really are hurting all consumers, especially the old guard.

It's up to you England, you must pirate the game so the rest of us can enjoy games at the same price they are at now. Stop Activision in it's track!

I don't think they should have told us that.

and watch the game still sell millions, because people are idiots. I didn't care for the game before and I certainly don't care for it now.

Well you know, the analyst said this isn't completely unjustified. Development costs for games are increasing as we keep demanding higher quality games. It's only natural that we would have to pay more for the finished project. We can't really judge if Modern Warfare 2 is worth this price until we actually play the game.

But you know, let's bitch and moan about having to pay more instead. That's much easier.

Try telling your boss "I'm going to charge you extra for a while, just to see if I can." and see how quickly you're shown the door, probably flanked by security. I've always loved how quick companies are to bitch that they're losing money. One year they'll be posting record profits, then the next their profits will be down a crippling four percent, resulting in mass layoffs and closures. Of course four percent off of more money than God isn't exactly a lot, but any port in a storm.

The problem with this is that no matter how ridiculous it is, how utterly blatant an outright assault on consumers this is, no matter how many of us complain about it, there will be enough people that will buy this at whatever the price is set at. And Activision will hold it up as proof that even in these tough times consumers will still support their decisions. $90 per game won't be an outrageous gouge, it will become standard. It's not hard to see it, even in the past year games have jumped five or ten bucks a pop. And as much as it may suck, we have two options: pay to play, or put the console away. Because supply and demand doesn't drive the market anymore, the people setting the price do. This is their game, and we play by their rules.

Of course this could all be fixed if games would stop costing $40 and $50 Million a pop to develop, but since 98% of the population seems more concerned with "ooh, shiny!" than "ooh, fun!" I guess we're fucked either way.

I think that might actually hurt sales by making the game do damn expensive (case and point: PS3 costing so much and being so behind in sales of the 360 and Wii).

I thought maybe it was a test of irony: to see if any of the Sony execs come out and demand for a price cut or else they will no longer allow for activision games to be published for playstation.

Unfortunately I'm sure this will end up being very lucrative for them and just another rip off for gamers; I guess we really have proven ourselves to be the biggest suckers huh?

They demand a PS3 price cut and then hike up their prices? How does that not make them look like giant dicks according to their PR guys?

Ok. Has anyone seen what games are being released on the 24th September?

Even if you bought all of these at launch, you wouldn't be physically capable of playing them all through to completion as fast as you'd like to.

...unless you happen to be an Octopus:

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Cheaper to buy? I'd love it if he'd be so kind as to point me where I can buy a AAA new release for the PC for less than the normal $50. That's often too high for me anyways. I feel bad for those who have to pay more normally and even worse for the Brits stuck paying $90 if they want this title.

PedroSteckecilo:
Alright then, I definately won't be buying this... I don't care how good it is, a stand MUST be taken somewhere or they'll keep gouging us.

I'm going to have to go with this. We can't let them know that we would buy a game that expensive, even if the quality was amazing.

The worst part about all of this is that Call of Duty: Modern Warfare 2 will still be a megahit, everywhere including Britain.

They're running this test on Britain because it's essentially "risk free" since I'm guessing Britain is a nice med. sized market where the figures/trends will be accurate but where a loss won't hurt the overhead.

However, gamers/geeks/whoever are an intensely stupid lot. Just look at how much people are willing to pay for Warhammer Merch. and similarly overpriced items. People are willing to spend money to get what they want and this is a sign that they will be willing to spend too much money for little return. I don't count myself apart from others willing to do this, I've done it myself on many occasions. I've spent far too much money to acquire a rare game or RPG product that I just HAD to get my hands on. I know from multiple experiences what people are willing to spend, and the numbers are silly and we are stupid.

Be ready, game prices are going to skyrocket soon.

Internet Kraken:
Well you know, the analyst said this isn't completely unjustified. Development costs for games are increasing as we keep demanding higher quality games. It's only natural that we would have to pay more for the finished project. We can't really judge if Modern Warfare 2 is worth this price until we actually play the game.

But you know, let's bitch and moan about having to pay more instead. That's much easier.

Yes I don't see why people are so pissed about this, arent games reaching the 20-30 million dollar mark to make. Games nowdays need to hit the 1 million mark to even begin to make money. And these games that sell huge numbers (COD4) finance the development of other games. You don't have to just make enough to cover your dev cost you also would need money for the next games down the line.

Plus a lot of N64 games were 60 USD and that was in the late 90s. So I'm not gonna complain.

Cost=higher sales=same To me that would justify higher prices. But I'm not in the biz so maybe i'm missing something.

The CoD Franchise is certainly a lucrative one, but there is only so much people will put up with. A BOYCOT, unless its a gift of course (y) =]

What?! 90 BUCKS?! Are they freaking insane? They can shove their night vision goggles up their arse, i'm not buying this. And i hope the only reaction they'll get will be a huge increase in pirating, but that's just wishful thinking. People will probably just buy it anyways.

Can someone explain to me why a price increase justifies pirating? If it costs to much, then wait until it costs less. It's not that hard.

I feel sorry for the brits here. I'm in Canada, so when this game makes huge money (and it will) we'll probably be one of the next places on the list to start getting the prices jacked.

OK, so one console, $200 - $400, then one game, $90-$100....

Ya, I think I'm gonna bitch and moan because I think I'd have fun doing that more than knowing I could spend my month's pay on 2 games and have enough left to eat some skittles.

If this is a test, then you'll lose Activision. I can wait two months for MD 2, just you watch me.

sneakypenguin:

Internet Kraken:
Well you know, the analyst said this isn't completely unjustified. Development costs for games are increasing as we keep demanding higher quality games. It's only natural that we would have to pay more for the finished project. We can't really judge if Modern Warfare 2 is worth this price until we actually play the game.

But you know, let's bitch and moan about having to pay more instead. That's much easier.

Yes I don't see why people are so pissed about this, arent games reaching the 20-30 million dollar mark to make. Games nowdays need to hit the 1 million mark to even begin to make money. And these games that sell huge numbers (COD4) finance the development of other games. You don't have to just make enough to cover your dev cost you also would need money for the next games down the line.

Plus a lot of N64 games were 60 USD and that was in the late 90s. So I'm not gonna complain.

Cost=higher sales=same To me that would justify higher prices. But I'm not in the biz so maybe i'm missing something.

They are bumping the price in a SINGLE region, not the whole market, and they're selling ABOVE the recommended retail price. Can you figure it out yet? I believe it's called a rip off which it is, as a guy who used to have to shell out $120 for a new game and as someone who will tell you quite politely that it's 90 USD it is 60 POUNDS learn to read.

And yet you'll all buy it. Quit posturing and just accept that on release day, you'll all be in line for your copy. =) That's like saying if games got more expensive in the States, I wouldn't pay for them. I know I 100% will.

We could all become readers instead of gamers. Then we can all bitch about the rising cost of print and how this author is more l33t than that author and this publishing house has tons of books "on the way" and will dominate in the "near future" vs this other publishing house who has a vast library already and gets all the new books because they have more money to pay for author exclusivity. Of course, there will be this other niche group of picture-book readers that love their simple books with large font and don't care about books over 25 pages that are well-written.

=)

Hmph, at least I'm in America...
But I feel sorry for all you Brits.
I hope that every British PC gamer that was going to buy MW2 will pirate it instead, and all console players just don't buy it. Activision will see how their little "experiment" turns out.

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