Project Natal, Sony Motion to Drive Game Pricing Down, says EEDAR

With the introduction of the Xbox 360 and PS3 also came new software pricing. Although many gamers complained about the higher $59.99 price point, publishers believe it's justified due to inflation and the fact that it costs them more now than ever before to create a high-end video game. That said, within every console generation prices on software due tend to decline as times goes on.

Time isn't the reason this happens, however, according to a new report from EEDAR. Looking at past console cycles, EEDAR found that software pricing "only declined due to a catalyst (the introduction of a new console) and not the result of the progression of time." For the current generation, EEDAR believes that one primary catalyst to cause prices to fall will be the new motion sensing systems.

"Looking ahead, EEDAR believes that median pricing for titles released in 2010 for the Xbox 360 and PlayStation 3, will decline to $49.99, but likely will not occur until the beginning of the 2010 holiday season. The expected decrease to $49.99 will be a directly attributable to the continued penetration of the casual market, an increase in quantities of low-cost casual games, and a decrease in development costs," EEDAR wrote in its latest report. "Additionally, Sony Motion and Project Natal will play their role in driving prices down. EEDAR believes that both the Sony Motion and Project Natal will create resurgence in demand among the casual market. Given that the casual market is more price sensitive and that overall economic health is not expected to dramatically improve in 2010, it is expected that there will be a sufficient increase in lower priced games targeted at this casual/mainstream audience to drive down the median price of titles for the Xbox 360 and PlayStation 3."

High quality games rated 80 or above are likely to remain priced at $59.99, the firm added, and the only reason for this to change would be if a sudden price war erupted between competing brands, similar to what happened with EA Sports and 2K Sports several years ago.

As for the Wii, EEDAR noted that it's in a "category of its own." The games are already starting out at $49.99 and its "unique demographic" makes its "radically different" from the PS3 and Xbox 360. The Wii has seen price erosion about a year earlier than in the previous generation but EEDAR this is "occurring due to the casual and non-traditional gaming demographic that is more prevalent on the Wii than its competitors and previous generations." The firm added, "While many view these lower price points as a slippery slope for the entire industry, EEDAR believes differently. Nintendo the company and its consoles operate in a vacuum; its sales trends, formulas for success and even its technology, runs perpendicular to the rest of the industry."