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Strauss Zelnick didn't say games should be priced per hour, but is he right about their value? | Opinion
17.11.2023 - 13:31 / gamesindustry.biz
A story has been doing the rounds that Strauss Zelnick, the CEO of GTA publisher Take-Two, thinks games should be priced by the hour.
This has come from a quote in Take-Two's Q2 earnings call when a Goldman Sachs analyst asked Zelnick for his views on subscription pricing in the broader entertainment market.
Zelnick's answer actually doesn't suggest games should be priced hourly. Instead, his response is simply the same long-held view from executives in this business that video games (broadly speaking) are good value for money because of the depth and, yes, length of the experience.
Here's the quote: "In terms of pricing for any entertainment property, basically the algorithm is the value of the expected entertainment usage, which is to say that 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 or subscribed to. And, you'll see that, that bears out in every kind of entertainment vehicle.
"By that standard, our frontline 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. It's always been our strategy here. We want to make sure the experience is first-class, and the nature of the experience is not just the quality of what we offer, it's also what you pay for it, everyone knows that anecdotally."
"Our frontline prices are still very, very low because we offer many hours of engagement"
Zelnick is speaking to the idea that video games are worth the asking price because of the amount of entertainment you're getting out of them. 80 hours of gameplay in GTA 5 for $60 is better value for money than two hours of the Barbie movie for $12, for example.
Now Zelnick is talking about games generally. He's not arguing that Spider-Man 2 should be cheaper than Baldur's Gate 3 because of its length. But even so, is he right? Is the amount of hours of entertainment a major considering for gamers when it comes to their value perception?
It's worth noting that value is a complicated concept that differs by person, product and brand. Ask a gamer what they think about buying a mobile game $10 and how they feel about spending $70 on a console game, and you'll likely get a different answer, for example.
Looking at the data, and it seems clear that quality games that last a while tend to do very well. I've picked some of this
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