After the big announcement about GTA 6, the CEO of Take-Two, the game’s publisher, explains how video game prices should actually be calculated.
The GTA community is eagerly awaiting a trailer for GTA 6, which is rumored to be released in December. While the hype following the official announcement of GTA 6 is palpable throughout the gaming community, the publisher shares exciting pricing insights.
Strauss Zelnick is the CEO of Take-Two and explained in the latest earnings call to investors (via RockPaperShotgun) that video games are quite inexpensive. Considering what you get for the price.
“… our prices are still very, very low”
What does Zelnick say? He explains that players get a lot of value for the money they spend. They want to provide consumers with a premium experience:
As for our pricing for any type of entertainment property, the algorithm is basically the value of the expected entertainment usage, i.e., the value per hour times the number of expected hours plus the end value that the customer perceives as an owner when the title is owned and not rented or subscribed.
By these standards, our prices are still very, very low, because we offer many hours of engagement; the value of that engagement is very high. So I think the industry as a whole offers excellent value for consumers.
This does not necessarily mean that the industry has or wants pricing power. However, a lot of value is offered, and it is our strategy to provide consumers with much more value than we charge them; that has always been our strategy.
We want to ensure that our experience is top-notch, and the nature of that experience is not only the quality of what we offer but also what you pay for it. Everyone knows this anecdotally. That’s how we see it. There have been very few price increases in our business. The price increase to, for example, 70 dollars for certain frontline products [in 2022] was the first price increase in many years and after many generations. So I think we provide consumers with great value.
Keep this in mind: In many games, the “purchase price” doesn’t cover everything that can be utilized. Games like GTA Online rely significantly on microtransactions. This allows you to buy in-game currency instead of having to earn it through many hours of work in the game. This way, new content from free updates can be quickly bought with money.
What do you think about Strauss Zelnick’s pricing philosophy? Do you agree, and should games actually be much more expensive?
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