Why Nintendo games never go down in price, according to Satoru Iwata
In the book Ask Iwata, former Nintendo president Satoru Iwata is quoted as having said:
After a piece of hardware is released, the price is gradually reduced for five years until demand has run its course. But since the demand cycle never fails, why bother reducing the price this way? My personal take on the situation is that if you lower the price over time, the manufacturer is conditioning the customer to wait for a better deal, something I've always thought to be a strange approach. Of course, this doesn't mean that I'm against lowering prices entirely, but I've always wanted to avoid a situation where the first people to step up and support us feel punished for paying top dollar, grumbling, "I guess this is the price I pay for being first in line."
What do you think of what he said here?
Quickly before I get in the shower:
While he makes a great point about "the price of being first in line", it's a bit disingenuous to then extend that to never lowering prices. At some point, you need to be able to draw in more buyers. Many people (myself included) balk at buying Nintendo games because they are so expensive, and never go on sale. I'll buy a hundred discounted steam games for every one Nintendo game. If Nintendo did some regular sales (summer and winter maybe?) I would predict a nice bump in sales at those times which would likely offset lulls at other times.
Seriously, I'd buy way more Nintendo product if they would just lower the damn price. TotK was the first Nintendo game I bought in 5 years - the previous one being BotW.
It's the main reason why I buy physical copies for my switch rather than digital. If it's a new game I know that I'll be able to resell it again for near full price once I'm done with it sometimes years later depending on the game, and if it's an old game losing its value I can pick up a used copy of it for significantly less than the digital price.
I don't even really bother to do this with other systems. I wonder if the family console aspect of it that they see more people buying digitally that way rather than those going to the secondary market. I just can't bring myself to buy games digitally for my switch when it still costs $60 for a game there that I can pick up for $30 from Gamestop and still have the option to resell it later.
Definitely on the family console aspect. We got a Switch about a month ago, and I've gotten a few games physically (cheap ones that I was more on the fence about or thought I might want to eventually resell), but then bought pretty much every Nintendo game we have digitally. The reality is, we're never getting rid of Super Smash Bros, Mario Kart, Animal Crossing, Mario 3D World, or Mario Party, because my kids (or I) will want to play them for years.
Also, the voucher program where you can get two for $100 helps a bit. Even better was that I just got a Costco deal where I spent $80 for $100 in Nintendo bucks, then used the vouchers to get two games. So... not that much worse than physical prices if you can swing it!
Edit: I don't even think you have to have a Costco membership, just be in the US: https://www.costco.com/%24100-nintendo-eshop-digital-gift-card-multi-pack-(4-x-%2425).product.4000152900.html
Even on the family games that we're not likely to sell I still go with physical games. We ended up with 3 different switches with us as both myself and my wife had one, and then my step-daughter got a switch lite that had stopped working from a cousin and after $20 of fixes it's in perfect working order. So having physical games that can be switched between the consoles as people play them is super useful as well.
I can see that use case, for sure. I’m 99.9% sure we’ll only ever have one, so having the games living on the device is a lazy dream!
For the Costco deal, if you don't have a membership they'll charge you a 5% fee, which amounts to $4.50.
That’s good to know. $84.50 for $100 isn’t too bad, either!
Well also that Nintendo's digital policy is ass. I have games on Steam I bought almost 20 years ago. Can play on any x86 machine. If a game doesn't work, they have a decent return policy. Nintendo? New system = buy again. Port is garbage = too bad, you wasted your money.
For such an ultra portable device it's a shame to have to carry cartridges everywhere.
As a consumer I don't love it, but he is 100% correct that many people will wait for a sale.
Nintendo is special in that their games are beloved and only made by them, do they can get away with a little anti consumer practices without major backlash.
This is becoming a trend in the indie market too, for example rim world and Factorio. At least with Nintendo though you can pick up used games.
Edit: I also think there is a negative connotation they want to avoid seeing a Mario game marked down 80%. Makes the game look bad, like it's not worth full price. Conversely, seeing older games still at first price gives the opposite impression
Except most games get like ~90% of their sales in the first month or so.
(I don't have an actual source rn, so I'd have to look it up, but I've seen it stated by different devs and such. 90% may not be wholely accurate)
So most people won't wait for a sale. And while I agree an 80% sale might incur unfavorable opinions from potential customers, the fact they don't even have 10%, 25%, or 33% sales is absurd.
I literally won't buy a switch bc I am not going to pay full price for all those games. Especially when they've released dog water games like super Mario party, that felt half complete for full price, and still don't discount them.
Hell itd be nice if they even did like a bundle with TotK where you got BotW for 30% off or so. Having to spend $120 on top of a switch to play the series? That's crazy.
I think that's an exaggeration. Even 2 years after release, this is pretty rare now. I think most publishers have learned not to devalue their games too quickly. There's no way Capcom is dropping Resident Evil 4 emake to $6 in the upcoming Steam Summer Sale. RE8 is 2 years old now and still hasn't gone below $20 on Steam.
It's pretty rare to see discounts beyond 33% in the first 6 months unless the game flopped.
I don't think it's an exaggeration, but the exceptions to this rule are examples of survivor bias. Nintendo games on top of everything else are know for having extremely long tail ends, where they can double or even triple their lifetime sales over the course of 3-5 years. That's unheard of even for other AAA titles.
But the statistic comes more from a time of retail, where you won't have your game be available for sale (in new print runs) for over a decade unless your game is GTA (...or Nintendo. Those dang pokemon cartridges). Most others would get release month sales, a small tail end, and then go off the retil shelves. The statistic probably needs to be adjusted in the advent of digital sales, but we have even less access to those numbers.
I don't know anything about Rim World, but for Factorio I think the difference is that it has ongoing development. Perhaps Factorio developers would shift their perspective on the pricing of the game if they were no longer developing it and had moved onto another game, but the perspective they have makes sense to me in that their time spent today isn't worth less than it was 3 years ago and they're still developing the game.
For games that are released and that's just what they are, there's no ongoing development. They had a certain expectation of what it would sell, over a certain period of time, they meet their goals and eventually the game reaches the end of its life...at that price point. When the work they did once can be replicated an infinite number of times, it only makes sense that inevitably it's worth less. In cases like Factorio, they aren't just doing work once and calling it done, they're still working on it.
The one thing I'm not seeing people acknowledge about sale dynamics, and maybe it's even more true for Nintendo, is that those games might cause depression in demand for newer games. Everyone has a finite amount of time, so if you can buy cheaper games that take up time you use for recreational purposes, that is potentially a void that could have been filled with a newer game. The flip side to that is, a game that was already produced and paid off years ago is potentially a higher margin item for them at certain sale prices. I'm sure as with all things, there's a balance to it depending on various factors.
I'm fairly confident that the Factorio devs have been pretty clear that they never intended to put the game in sale citing an expectation that people would "wait for a sale". Their most recent Friday facts blog post had the following to say:
Additionally, to my knowledge they have been working on Factorio 2 (or some kind of expansion) for several years now.
Either way, it's an interesting strategy. I personally feel that you can only get away with no sales if your game is exceptional. Most games will sell at launch, but if it's not a good game a large sale is the only way to get more people in. A great game will always sell (it's why Skyrim is still basically full price)
Well that explanation isn't mutually exclusive with what I described. The sales being consistent is partly influenced by the game's ongoing development. If they had stopped at 1.0 and called it good, I'm fairly sure the sales would have fallen off. Their ongoing work makes sure the experience people had when they first started playing the game is similar to what they would have playing the game today, compared to competitors etc. It just makes sense for them to not undersell their ongoing development as long as what they're contributing continues to keep the game engaging.
I'm mostly curious what their perspective would be if they just dropped Factorio and moved to another game entirely if they'd have the same perspective of "sales" because that would back up my argument that they're not against sales, they're against paying themselves less for work they're still doing. Once the development goes somewhere else, they almost certainly won't be seeing consistent sales of 500,000 each year.
in all fairness it makes sense for those specific indie games. Nintendo will maybe put out a few patches, a few paid DLC, and overall call it done in a year. Factorio in 2016 and Factorio in 2022 are arguably completely different entries, with the dev team continually providing updates and major features to maintain the value of the game. you can argue the launch price was a bit too low to begin with in 2016.
I'd personally rather have long term price hikes with promisees of that sort o support over an arguably worse attempt at a sequel, as we are seeing right now with current feedback from City skylines 2 or Kerbal Space Program 2.
I wonder if one layer of it is that when consumers know the price won't fall, they aren't choosing between "now and expensive" or "later and cheap", they're choosing between "now and expensive" or "later and expensive". The obvious decision is "now", which has the effect of making Nintendo releases big. I wonder if the benefit of the network effects outweighs the long tail of smaller sales that they're leaving by the wayside.
Maybe I'm underthinking this, but it seems obvious to me: You [are willing to] pay more earlier to enjoy the product sooner.
This is also being seen at the opposite end of the spectrum as well. People (myself included) will pay extra for early access to a launch date.
re Nintendo's practices: I agree that in theory this will condition the consumer to wait for a sale and potentially devalue a brand. "Ubisoft games are always on sale 3 months after release, I will just wait."
But, overall this generally has the opposite effect on me. Unless a Nintendo game is really what I am looking for, why would I spend my limited gaming budget on 1 title when I can get 3-4 other titles (albeit older or not Nintendo quality).
A note: this seems to be about hardware rather than software. Although their software seems to be following a similar trend lately. I believe they just consider their games evergreen products that aren't necessarily replaced by new product lineups.
What's he referring to with "the demand cycle never fails"?
I wonder if this was a lesson from (or in the context of) the 3DS' release and price drop. But I guess that wasn't exactly a product life cycle price strategy but poor judgment. I don't really mind that the price stays the same, as long as it's reasonable. There are often (small) deals to be found through retailer discounts or by buying used hardware. Nowadays, I get the impression that the hardware price isn't an issue so much as the "value" that the hardware can offer with an expansive and desirable library or, as with the Xbox, a desirable service.
How is the book by the way? I've been interested in reading it, but the idea of it largely being in a Q&A format sounds like it could make for a pretty dry and disjointed read, despite getting cool insights.
It's a good book. It's actually not mostly in Q&A format, it's mostly snippets from interviews and other anecdotes he told.
No sales give the impression of a premium product -- and people are obviously willing to pay anyway. Why would they change what works?
If you've recouped the development investment, the question you should be asking is: how can I keep selling my product to more people? Reducing the price over time is a way to capture the highest value out of people who are not price conscious but are eager consumers while opening the market to more price sensitive consumers over time. Surely being able to convert a 1/game a year consumer into a 2/game consumer at the same revenue is better. Isn't that why so many companies are going the subscription route?
There are a ton of reasons to do this, I'm surprised they don't benchmark against some of their competitors to see why they're the only one doing this.
I value a game sort of by the cheapest price it'll be available for shortly after launch, as well as by how long it is fun to play. I felt hurt when I saw Doom 2016 on sale for $5 less than three years later, so I totally get Iawata's point and even agree with him. If you can bring the price down that low just start at a lower price and keep it there anyway.
I’ve just bought my first Switch after years of waiting, mostly because I was never taken with the design of the console on paper (hadn’t been hands-on at all with it) and because I didn’t love the library of games at launch.
That said, I’m loving it, but I was flabbergasted by how 5 year old games still sell for full retail. The cost of games has been a big barrier to entry in all honesty, but I’m fortunate to have friends who are willing to lend me some of the classics like BotW since they haven’t played ‘em in years.
The Nintendo store really needs better sales, it's abysmal.
He has something wrong there, it might condition some people but many want to be the first to get to the game and others don't want to be left out while the game is still new. After a while the number of people playing declines and graphics are not as good as current games so it shouldn't be worth as much. Others, especially those without much money, will wait for a sale and if it never comes then the game will never be bought. If the games never come down in price then they won't even buy the console because why buy something you'll never use?
Mentioning graphics here is an interesting point because Nintendo’s consoles and games don’t sell as heavily on their graphic / cutting edge tech the way XBox, MS and PC games do. I wonder if this makes them more resilient to aging - the games are sold more so on stories, mechanics and IP which age more gracefully than the newest ray-tracing or graphics would.
It is interesting seeing their pricing strategy laid out though after having played right into it - I guess never feeling like I should wait for a sale makes me much more prone to buy new games.
Yeah,I'm not with him on this one. All this has done for me is make me less and less likely to purchase or even play Nintendo games. If I do play them, it's almost always either borrowing a copy from a friend, meaning Nintendo doesn't get my money, or I pirate them, meaning Nintendo doesn't get my money.
The price of being first in line is actually something I'm fine with if I want to be first in line. I've bought those fast pass line skipper things at theme parks and such before, literally paying more to get to the front of the line. There are plenty of games that come out and buying the deluxe edition or whatever gets you early access as well. People have shown time and time again that they are fine paying more for access to a game earlier. Imagine if Nintendo had said "for $80 you can have TOTK 4 days early." How many people would have paid the extra to be first in line?
If a new game is coming out that I know I'm going to absolutely love, I have no problem paying full price, and I also have no problem seeing it go on sale 3-6 months later. And if it's been multiple years, seeing a sale probably makes me recommend the game to friends, or if it's low enough, I just buy some games for people.
Also, for some games, being first in line also means there's no spoilers out there to potentially run into. I think of a game like Outer Wilds. If I hadn't played it early in its release, I might have run into spoilers that could seriously ruin a lot of moments in the game.
Honestly, he's right. I've seen articles on how that has become a problem for devs especially on PC where steam puts out some good sales where their game just isn't valued cause people will just wait for a really good steam sale. Granted this was a while ago but I even see it in the gaming forums i'm on (where people just are like, "I'm going to wait for steam to put it on sale like they always do").
It has pushed for them to really push for day one sales cause I am betting that's when they are going to get the people who won't just wait. hence more pre order bonus's and such.
I think it's a relief to see a games company that is prioritizing literally any long-term goal over revenue maximization.