The CEO of Rockstar owner Take-Two has talked about changing the way video games are paid for.
Grand Theft Auto 6’s first trailer is finally here, after developer Rockstar revealed it early following a leak and ahead of The Game Awards on December 8.
The game’s price is also of interest, although it’ll almost certainly cost £69.99, which is what most new AAA games are priced at now.
But during a recent investment call Take-Two CEO Strauss Zelnick said that big budget video games should be more expensive the longer they are.
‘In terms of our pricing for any entertainment property, basically the algorithm is the value of the expected entertainment usage, which is to say the per hour value times the number of expected hours plus the terminal value that’s perceived by the customer in ownership, if the title is owned rather than rented or subscribed to,’ he said in the most confusing way possible.
To simplify, Zelnick is talking about the overall value video games offer, and that the price of a game should be based on how many hours they can expect fans to play the game.
Update: Take-Two has emphasised that Strauss Zelnick was not advocating a new pricing model revolving around hourly rates. Instead, he was trying to emphasise that publishers should try to ‘over-deliver on the content/experience relative to the consumer and their spend.’ Which will hopefully be as true of GTA 6 as other recent Rockstar games.
This formula still makes some sense, but it would likely lead to developers loading their games with endless filler to hit higher pricing targets, which is a real worry considering bloat is already an issue with many AAA titles.
Although Zelnick doesn’t mention GTA 6 specifically, that’s almost certainly what he’s thinking of, since obviously he knows what it’s like – and how long it is.
He does have a point when talking about the relatively low cost we pay for video games generally, as they haven’t increased much in the last couple of decades.
‘By that standard our prices are still very, very low, because we offer many hours of engagement, the value of the engagement is very high,’ Zelnick said as part of the company’s quarterly financial results.
‘So I think the industry as a whole offers a terrific price to value opportunity for consumers.’
The obvious issue here is that many current games can easily last you hundreds of hours. GTA 5, for example has a main story that lasts around 32 hours but most people will have played it for much longer than that, without even considering GTA Online.
Zelnick seems to think that the pay-by-the-hours model isn’t feasible, at least not at the moment, and his conclusion actually seems fairly reasonable:
‘That doesn’t necessarily mean that the industry has pricing power, or wants to have pricing power. However, there is a great deal of value offered, and look, it’s our strategy here to deliver much more value than what we charge consumers, that’s always been our strategy.
‘There have been precious few pricing increases in the business. The price increase to, for example, 70 dollars for certain frontline products [in 2022] was the first price increase for many years after many generations. So I think we offer terrific value to consumers.’
Curiously, Zelnick doesn’t distinguish between single-player and multiplayer in any of his comments, underlining that this is more a thought experiment than a hint at upcoming price changes.
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