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Embracer Group has been a recurring company in recent months due to its financial problems. And part of those financial problems are due to the current situation of developments in general. Much has been said, but a deduction emerges that they draw from Embracer Group to describe the immediate future of the industry. Games must be adjusted and be shorter, or assume that video games must be more expensive.
And it is something that we have been seeing with the current generation, since at the time, some companies justified an extra cost in games due to the need to invest more resources in their development. That was a long time ago, because after the problems with inflation, They were an even bigger problem.
Should video games be more expensive, or shorter? Embracer Group evaluates these two options for the future
And this is what has promoted, along with a large bubble in the number of players during the pandemic, that due to that excess demand, an excess supply was produced. Assuming the costs at that time has been complicated for many companies, starting with the one that has led the amount of cuts necessary to avoid ending up closing the entire business. Now, Lars Wingefors has returned to the scene to answer a question that many companies are asking. What to do about the problem of video games and their profitability?
Well, the answer is quite efficient, you can even say that it is logical. Given the controversy over the increase in the price of games, he states that it is not a desirable or easy decision to make. But by the same token, he argues that “the price of these products has been the same for many years,” promoted by a need to limit the profit margin in order to guarantee some success. This seems not to be possible now, because higher production costs must be assumed. With this, Wingefors argues thate “I'm not saying you can't increase the price”since it depends a lot on what game we are evaluating in this section.
With 4,500 layoffs and 80 games cancelled, this is how the restructuring of Embracer Group remains
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He gives as an example that “With 100 or 150 hours of gameplay, very polished and a unique experience, would the consumer be willing to pay more?”drawing the conclusion that “If they did, they would potentially have more products on the market”. However, he attributes this to being too big a risk, “It's something we've been discussing, but we're currently sticking to industry practice.”. As a consequence, the balance between cost and duration, as an argument presented as a reference, is broken.
“I just think there are consumers willing to engage in those amazing RPGs and other single-player games, and ultimately, they're willing to spend money on them,” and therefore, he concludes that the way to proceed is either to increase the price of the games and present them in this format, or to shorten them to be able to offer the same price. However, he assumes that “it would be very sad if everything turned into big multiplayer and in-game monetization titles,” because “There are millions of consumers willing to participate more in classic games.”
Be that as it may, the most veterans remember how in the past the games already cost around €60, if we convert it from the disappeared pesetas. It is evident that if we compare how much the price of everything has risen, in proportion, games have barely seen their price increase. It is normal that you do not want to pay more for a game, but everything must be evaluated from the perspective of the experience that each one offers and make it profitable in some way. Bigger games cost less to make profitable, even games as a service, They can be very profitable.
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But the question of the cost of playing video games is something that will always generate debate, where users will look for it to be cheaper, while companies are interested in making it profitable. A balance that is not always possible and that, For the CEO of Embracer Group, he has a possible solution in this model.