How do entertainment retailers come up with the prices they charge? Why is a movie theater ticket $10, a music CD $15, a rental DVD $3-$5 and a top video game $60?
We asked Strauss Zelnick, executive chairman of game publisher Take-Two. He says it’s simple math, based upon the value of that experience.
Prices are determined by the marketplace — if folks stopped buying stuff, prices would fall, etc. (Think gasoline). Balance that with cost. A game like Halo or Grand Theft Auto takes years to develop and costs as much to make as a Hollywood film.
Here’s Zelnick in his own words:
The reason the consumer is willing to pay $60 for front-line product is because they are going to get 20-plus hours of game play out of that product.
I’m a big believer that there is an equation for the pricing of front-line entertainment products, which is: The hours
of expected consumption times the value per hour, plus the catalog value.







