Take-Two CEO Strauss Zelnick has said during the publishing powerhouse’s latest earnings call that he feels video game prices are generally too low for what consumers get out of them.
The executive offered insight into how Take-Two calculates video game prices, and reckons as a whole the industry offers “terrific price to value opportunity” for players.
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.
You’ll see that that bears out in every kind of entertainment vehicle. 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. So I think the industry as a whole offers a terrific price to value opportunity for consumers.
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.
Take-Two was one of the first major video game publishers to raise the price of its titles for PS5 and Xbox Series X/S, although it caught a lot of criticism for charging $49.99 for its barebones PS4 port of Red Dead Redemption.
[Source – Take Two Earnings Call via RPS]