THQ president talks up new $40 sales model, building a user base
32
THQ president Brian Farrell has some bold ideas about the future of the gaming industry's profitability. While speaking at the recent BMO Capital Markets Conference, Farrell explained, "What we're thinking about the business is we're turning it on its head a little bit," later adding, "It's not, 'how high a price can we get', but 'how many users.'" Farrell then described THQ's vision for capitalizing on that policy: As revealed in September, THQ hopes to launch the next entry into the MX vs. ATV series at a lower price point, and rely on DLC to bring in the big bucks.
"When we launched [MX vs. ATV] at $59.99, we'd do some units, and then when we brought the price down to the mass market-friendly price of $39.99, it would just pop," he explained to the conference's attendees. "So the thinking this time is, let's initially launch at $39.99 ... It's a AAA title, at that price point, but then with a series of DLC so people can extend their experience." The company's strategy makes a lot more sense, now. See, before, we just thought they were dropping the MSRP because they wanted to do a nice thing for us.
"When we launched [MX vs. ATV] at $59.99, we'd do some units, and then when we brought the price down to the mass market-friendly price of $39.99, it would just pop," he explained to the conference's attendees. "So the thinking this time is, let's initially launch at $39.99 ... It's a AAA title, at that price point, but then with a series of DLC so people can extend their experience." The company's strategy makes a lot more sense, now. See, before, we just thought they were dropping the MSRP because they wanted to do a nice thing for us.
Reader Comments (32)
Posted: Nov 11th 2010 5:23PM Cleric said
"and rely on DLC to bring in the big bucks."
I love THQ and all, but this line worries me.
I love THQ and all, but this line worries me.
Posted: Nov 11th 2010 5:28PM LaughingTarget said
@Cleric
What for? You don't have to buy any of it.
Reply
What for? You don't have to buy any of it.
Posted: Nov 11th 2010 5:51PM Stix Remix said
@Cleric
Know that you're quoting isn't an actual quote from THQ. If you read through the Gamasutra article, it explains their strategy a little better.
Reply
Know that you're quoting isn't an actual quote from THQ. If you read through the Gamasutra article, it explains their strategy a little better.
Posted: Nov 11th 2010 8:43PM XaiaX said
@Cleric
Honestly, "we're doing this to make more money" makes me trust them more. Since, that's obviously what they're doing, and if they just straight up say it, instead of pretending, it seems more legitimate than a BS price increase like XBL gold's "increased value" in a bunch of services I don't f'n want.
Best thing about DLC is it's optional.
Reply
Honestly, "we're doing this to make more money" makes me trust them more. Since, that's obviously what they're doing, and if they just straight up say it, instead of pretending, it seems more legitimate than a BS price increase like XBL gold's "increased value" in a bunch of services I don't f'n want.
Best thing about DLC is it's optional.
Posted: Nov 11th 2010 5:30PM InfinitiProject said
I miss the old days where games were in the $40-$50 range and on the way back home spending a few extra bucks at 711 buying snacks for playtime.
Nowadays it's buying a $60 game then going straight home and making a bowl of cereal or reheating last night's food to eat while playing.
Nowadays it's buying a $60 game then going straight home and making a bowl of cereal or reheating last night's food to eat while playing.
Posted: Nov 11th 2010 5:52PM Petebot330 said
@InfinitiProject yeah...you don't have to buy a game the day it comes out. The last 3 games I bought were all about 40 dollars.
Reply
Posted: Nov 11th 2010 6:16PM InfinitiProject said
@EGOvoruhk
I surely remember those days. I still remember my mom buying me Gyruss for $80 at Toys 'R Us and $90 for Pac-Man from a QVC segment o_O
Reply
I surely remember those days. I still remember my mom buying me Gyruss for $80 at Toys 'R Us and $90 for Pac-Man from a QVC segment o_O
Posted: Nov 11th 2010 7:15PM Drakkenfyre said
@EGOvoruhk
Where are you buying your games?
SNES and Genesis games used to retail $50-$60. If you were paying $80, you were getting badly ripped off.
You people paying $80-$90 for games from Toys R Us and QVC don't understand that those places ripped you off. That's how they made their money. Fingerhut would charge $80-$90 for a Nintendo 64 game. If you had gone to Wal-Mart, or any other store, you wouldn't have seen any prices like that.
Virtual Racing for the Genesis went for $80 because they had to use more ROM chips, thus jacking the price up of the game. But that was hardly the norm. I think the most expensive 16-bit game (not including NeoGeo games) would have been Formula 1 Racing for the Genesis. When it came out it retailed for $150 due to the amount of ROM chips they had to use for the game.
Most expensive SNES I ever bought was Super Street Fighter 2, and it was $63. I didn't even pay that, I got it for $20 because another store in town had a sale, and I got the price matched.
Reply
Where are you buying your games?
SNES and Genesis games used to retail $50-$60. If you were paying $80, you were getting badly ripped off.
You people paying $80-$90 for games from Toys R Us and QVC don't understand that those places ripped you off. That's how they made their money. Fingerhut would charge $80-$90 for a Nintendo 64 game. If you had gone to Wal-Mart, or any other store, you wouldn't have seen any prices like that.
Virtual Racing for the Genesis went for $80 because they had to use more ROM chips, thus jacking the price up of the game. But that was hardly the norm. I think the most expensive 16-bit game (not including NeoGeo games) would have been Formula 1 Racing for the Genesis. When it came out it retailed for $150 due to the amount of ROM chips they had to use for the game.
Most expensive SNES I ever bought was Super Street Fighter 2, and it was $63. I didn't even pay that, I got it for $20 because another store in town had a sale, and I got the price matched.
Posted: Nov 11th 2010 8:34PM LaughingTarget said
@InfinitiProject
Top shelf games would retail at $80. Final Fantasy titles for instance.
Reply
Top shelf games would retail at $80. Final Fantasy titles for instance.
Posted: Nov 11th 2010 9:30PM JMoney156 said
@InfinitiProject
Or try using Amazon. With their $20 gaming credit on preorders and $1 release day delivery, I've bought Super Mario Galaxy 2, Madden 11, Halo: Reach, Fable III, Black Ops, Need for Speed Hot Pursuit and Assassin's Creed Brotherhood for $41 each.
Reply
Or try using Amazon. With their $20 gaming credit on preorders and $1 release day delivery, I've bought Super Mario Galaxy 2, Madden 11, Halo: Reach, Fable III, Black Ops, Need for Speed Hot Pursuit and Assassin's Creed Brotherhood for $41 each.
Posted: Nov 11th 2010 5:36PM Jonman said
@ILT2
Yeah, but if you buy a boxed copy at Gamestop, the retailer and MS get a cut of that too.
No difference there.
The difference with DLC is that you're not burning through the profit margin on extraneous stuff like manuals, boxes and disc pressing. So actually, the developer could potentially get *more* of a percentage of the price with DLC.
Yeah, but if you buy a boxed copy at Gamestop, the retailer and MS get a cut of that too.
No difference there.
The difference with DLC is that you're not burning through the profit margin on extraneous stuff like manuals, boxes and disc pressing. So actually, the developer could potentially get *more* of a percentage of the price with DLC.
Posted: Nov 11th 2010 5:39PM Dante G said
That sounds to me like there will be less content in the game at launch than there would have been if they hadn't drop the price, so that they could sell the missing parts as DLC...
Posted: Nov 11th 2010 5:43PM dogmaticatheist said
I've made a personal choice to never buy a game at the full $60 price again unless I have a gift card. I find most titles these days (even a lot of AAA ones) to not be worth $60.
Posted: Nov 11th 2010 5:44PM dogmaticatheist said
@dogmaticatheist And I'm not saying I will buy all my games used, but I will just wait for price drops or sales. Over the course of a year, the savings will add up to hundreds of dollars.
Reply
Posted: Nov 11th 2010 6:12PM Lerkero said
@dogmaticatheist
Don't worry, I'm with you on that one. Publishers don't seem to know how many initial sales they are missing out on when EVERY game is priced at the highest retail price. There are plenty of games that are better priced at a fraction of the typical full price. I rarely buy above $40 these days.
Reply
Don't worry, I'm with you on that one. Publishers don't seem to know how many initial sales they are missing out on when EVERY game is priced at the highest retail price. There are plenty of games that are better priced at a fraction of the typical full price. I rarely buy above $40 these days.
Posted: Nov 11th 2010 5:48PM BobbyRobby said
I'm for the $40 pricing on game. It makes it easier for me as a consumer to justify buying games, taking a risk, and giving developers a chance. If games like Enslaved and Vanquish were $40 as opposed to $60, I'd be much more willing to purchase them. That said, the hours to dollars equation is a hard pill to swallow at $60 for a short game experience, especially when you have groceries and rent to pay.
Posted: Nov 11th 2010 5:54PM SisypheanLife said
@BobbyRobby
Exactly. $20 is my perfect price. I'll buy any game that seems decent for $20, because I can always get my money's worth. Beyond that, the relative value curve gets pretty steep.
Reply
Exactly. $20 is my perfect price. I'll buy any game that seems decent for $20, because I can always get my money's worth. Beyond that, the relative value curve gets pretty steep.
Posted: Nov 11th 2010 7:37PM Flapjackal said
@BobbyRobby Enslaved is $40 @ Amazon right now, and the PS3 version for about $33. They were selling it for $25 two days ago. And Vanquish is $50! Not quite $40 but still better than $60.
Reply
Posted: Nov 11th 2010 5:53PM Faceless Troll said
Turns out more people are willing to take a risk with a $40 game than a $60 one? Who knew!
Posted: Nov 11th 2010 6:33PM KiraXD said
this sounds much more reasonable than activisions pay for online, and EA's online pass.
I mean.. basically as long as THQ doesnt actually "dumb down" the game for a 40$ price tag, and keep all the goodies that we would normally get when buying a 60$ game... then i see no harm in this... im actually a fan of paying 40$ for games lol. In all honesty, i see this actually raising profit for them, while retaining loyal fanbase and creating new fanbase ( i know parents will be happy too)
I mean.. basically as long as THQ doesnt actually "dumb down" the game for a 40$ price tag, and keep all the goodies that we would normally get when buying a 60$ game... then i see no harm in this... im actually a fan of paying 40$ for games lol. In all honesty, i see this actually raising profit for them, while retaining loyal fanbase and creating new fanbase ( i know parents will be happy too)
Posted: Nov 11th 2010 6:36PM Tapejara said
I actually really like this idea, so long as they don't cut integral parts out of the game and sell it to me as DLC, I think I could get behind it.
Posted: Nov 11th 2010 6:39PM Drew327 said
Tell that to Activision and there $300 bazillion day one in sales
Posted: Nov 11th 2010 10:25PM Misfit Toy said
@Drew327
There are always exceptions. However, Enslaved is already at $40 retail. How many more sales might they have had if they just sold it at $40 day one rather than $60?
Reply
There are always exceptions. However, Enslaved is already at $40 retail. How many more sales might they have had if they just sold it at $40 day one rather than $60?
Posted: Nov 11th 2010 8:01PM leemahi said
There's a problem with that and it is consumers will see the 40 dollar price and think the game isn't as good.
Posted: Nov 11th 2010 9:35PM Naji said
This is not a new idea from THQ. When I was at Atari Bruno Bonnell launched this exact model in 2006 with Test Drive Unlimited. Let's give proper credit for ideas that benefit consumers.
Posted: Nov 11th 2010 10:24PM Misfit Toy said
I agree. $40 is more of an impulse buy. I will much more readily buy something at that price than $60. Otherwise I generally wait for a sale.
Posted: Nov 11th 2010 10:43PM jimmer411 said
I like the idea of $40 games but we all know that the initial DLC will already be included on the disc. I think DLC might just be the death of this industry.
The last game I paid full price for was mass effect 2, before that halo 2. Everything else I get off gogamerBdirt cheap
The last game I paid full price for was mass effect 2, before that halo 2. Everything else I get off gogamerBdirt cheap
Posted: Nov 16th 2010 10:40AM JCDoe said
This is good business logic. Its about time someone realized that selling 1 million units at $60 a piece ($60 million) is less than 1.7 million units at $40 ($68 million).
Featured Stories
Super Joystiq Podcast 004: 38 Studios meltdown, Gravity Rush, Civilization 5: Gods & Kings, Dragon's Dogma
Posted on May 25th 2012 3:30PM





