Exclusive outtakes from industry leaders
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.
Microsoft's videogame chief Shane Kim came by our New York office this morning for the Reuters Media Summit and shared his thoughts on XBox 360 sales ("cautiously optimistic") and the outlook for the gaming industry amid the economic doom-and-gloom ("Who knows, maybe flat performance will be considered a remarkable achievement").
He also gazed into his crystal ball and served up some insights on the trends shaping the gaming business.