Analyst: Activision Priced Stimulus Package Too Low

April 15th, 2010, 23:40 Posted By: wraggster

Activision may have been too generous with its pricing for the first Call of Duty: Modern Warfare 2 downloadable content (DLC).

Electronic Entertainment Design and Research analyst Jesse Divnich told IGN that Activision could have priced the Stimulus Package higher than $15 and still achieve its record first week sales.

"The accepted commercial success benchmark for DLC for a console game is 20% of the install base," said Divnich. "The stimulus map pack was able to reach that benchmark in just a week, and should reach 30 – 35% (of Modern Warfare 2 owners purchasing the add-on) through its lifetime,"

"It is evident that 2.5 million Xbox Live players felt that $15 was either just right or a good bargain and given the enormous quantity sold (2.5 million), I'd argue that Activision could have charged more and still obtain the same results," he added.

Divnich said the $5 price increase may pose a problem for Activision, however, as it continues to release more downloadable content in the future.

"Unfortunately, now Modern Warfare 2 consumers are anchored with the calculation that 5 maps equal $15, so deviating from that will be difficult for future Modern Warfare 2 DLC content," he explained. "However, Activision could employ some psychological tricks, maybe 5 new maps (no remakes) for $20? Or 5 maps and 2 skins for $20?"

"Whatever the case, you can bet that DLC prices are going to rise to the point where pricing reaches its most optimum in relation to demand," Divnich added.

Divnich said it comes down to what consumers feel is the best value proposition for their dollars, and that choice will ultimately decide what publishers charge for downloadable content.

"Of course the rate hike from $10 to $15 was met with many complaints from consumers, but the commercial success makes it evident that gamers felt the price tag was a good deal," said Divnich.

"It's not a rate hike on a necessity such as electricity or water where consumers have no choice but to accept higher prices. Consumers have a choice and there are plenty of available options if you felt that $15 was too much for 5 maps."

"The consumer has spoken," he said.

http://uk.xboxlive.ign.com/articles/108/1082840p1.html

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