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Halo 3: The Nickel & Dime Generation

This generation of video game consoles has paved the way for a new generation of pricing. Publishers settled into the idea of charging $60 for a new game rather quickly, but that’s hardly where the abuse on our wallets ended. Armed with a new line of online consoles, publishers also had a new potential revenue stream: the ever so popular microtransaction. There are many examples of modern console games that have used this model to produce a tremendous amount of capital; games like Rock Band and Guitar Hero are among the best examples. With the recent debut of Microsoft’s Halo 3: ODST, we’ve been handed a stunning illustration in the art of padding your bottom line.

In many ways, Microsoft deserves much of the credit for many industry trends. The successful attach rate of software in conjunction with the Xbox 360’s relatively strong position in the market has made their third parties happy to follow in their footsteps. It could be argued that Microsoft introduced gamers (and perhaps other publishers) to the concept of hidden costs; their online service carries a subscription cost; their accessories are proprietary, allowing them to dictate total control over pricing and availability; and the Xbox 360 was the first gaming platform to provide the framework for these types of transactions. The success of this model meant that software giants like Activision and Electonic Arts wouldn’t be far behind, and the rest is history.

Now that we’ve established the basics, let’s take a more detailed look at what this means for the consumer—the gamer. Before we can go any further,  we should audit the real cost of the Halo 3 experience to date:

  • Halo 3 (standard retail SKU): $60 USD
  • Heroic Map Pack (DLC): $10; 800 Microsoft Points
  • Legendary Map Pack (DLC): $10; 800 Microsoft Points
  • Mythic Map Pack (DLC): $10; 800 Microsoft Points
  • Halo 3 ODST (standard retail SKU): $60 USD
  • Two years of Xbox Live: $100 USD
  • Total cost: $250

It’s only fair to point out that these prices only reflect initial costs. If you’re just entering the Haloverse now, you could easily obtain the original release at a discount, or simply purchase Halo 3: ODST and enjoy the full 24 map multiplayer experience at a significantly lower flat rate. If you’re a dedicated Halo fan however, chances are that you consumed these products with haste.

Since ODST is effectively an expansion itself, let’s also compare this new price format with the old way. Way back in 2003, Infinity Ward and Activision released the first entry into the now famous Call of Duty franchise. A year later, they released a full featured expansion pack, United Offensive. This package was launched at a discounted price, and included 11 new multiplayer maps, 13 new campaign missions, and three new multiplayer modes. The amount of content deployed in a traditional expansion pack would have dwarfed what ODST delivered, and they were a fraction of its price.

These initial costs are astounding when you compare them to previous generations, but they’re even more ridiculous in light of contemporary alternatives. For the total costs of the Halo experience, you could have purchased four entire Call of Duty titles! If you include the cost of the console itself you can put it on the same page as World of Warcraft*, its expansion packs, and a two year subscription!

If this sounds a little bit like a rant, well, it is. I am not however picking on Microsoft, or Halo. The fact is that the entire industry has caught on, and the competition has played a role in proliferating “nickel and dime” pricing. I remember a time when additional multiplayer levels were an expected form of post release support. In a few isolated scenarios, this is still the case, but as the market continues to move briskly towards a downloadable future, the microtransaction is here to stay. How we’re treated as consumers is largely up to us – as cliché as this sounds – we vote with our wallets.

*If you’re reading this, you already own a rig capable of venturing into Azeroth.
25 comments
TheCongressman1
TheCongressman1

The price of video game consoles have greatly dropped comparing games when they first came out; an atari ($200) to a much more advanced Xbox 360 ($300). But it is true, consoles make the money off the games and peripherals. The price of a plastic guitar is outrageous. The video game companies are not starving. They make plenty of money, because they know how much they can charge and get away with it. Hopefully this trend will die down leaving lower prices for the consumer.

BingoBrown
BingoBrown

Funny that the article points out the cost of the Halo 3 multiplayer map packs, but neglects to include that cost for Call of Duty when claiming that you can purchase four Call of Duty titles instead of the entire Halo package.Call of Duty 5: World at War alone has had three multiplayer map packs, all at $10 a piece. So that's $90 for just one Call of Duty title. Or exactly the same price as Halo 3 and its multiplayer map packs.

guy
guy

You forgot to mention the hidden price of all the pizza slices you would have ordered while playing Halo games.Oh, and the hefty price of a big screen LCD, bescause nobody wants to play Halo in low-res.And the rent! You're not going to play it on the street, are you?Dumbass.

guy11111
guy11111

You forgot to mention the hidden price of all the pizza slices you would have ordered while playing Halo games.Oh, and the hefty price of a big screen LCD, bescause nobody wants to play Halo in low-res.And the rent! You're not going to play it on the street, are you?Dumbass.

deftangel
deftangel

I never said they were purely because of that at all, just that it bears consideration. Especially if you are considering the practice of premium DLC for games other than the likes of Halo (guaranteed successes) or Valve (businesses aligned to take advantage of giving away content for free).

Chris
Chris

good article - well thought and also well written

Edgar
Edgar

That's some pretty creative math you've got going on there. First off you added the price of Halo 3 ODST to the price of Halo 3, two seperate full fledged video games. I know everybody is going to say that ODST is just an expansion, but I'll be shocked if I get anything less than 40 hours out of that game. Then you went on to add the price of XBox Live into the equation. If XBox Live only worked for Halo games then you might have a point, but XBox Live works with hundreds of different video games. I also like how you ripped on Rock Band and Guitar Hero, two games that add tremendous value to their fans for the price of their downloadable content. Think about it, a song on iTunes can cost $1.50 easily, but for the same price on Rock Band you get the song and a much more interactive experience. Personally I like some micro-transactions, and I dislike others. Some games such as Fallout 3 have added tremendous value for a very reasonable price with micro-transactions. That's not to say there isn't some abuse, but I can easily point out abuse with full fledged games, just look at the Wii's line up.

Ariolander
Ariolander

Halo is probably a bad example if you bought ODST and are just getting into the Haloverse now the game comes with a special Halo 3 multiplayer disk that comes with all 3 map packs oplus 3 extra maps.If you wanna see rediculous DLC pricing take a look at Idolm@ster with its $2000 of DLC in Japan.

chad
chad

Putting the full price of xbox live on halo 3 is in most cases wrong, unless all you do on xbox live is halo. Anyone here never use the feature for something else?Since Halo 3 was released I've spent $120 on halo games, and only 10% of my time on xbox live is devoted to halo, so that's like 10 bucks for two years of service. That investment has a grand total of $65 a year, or total $130 for the two years. Even speaking as a half hearted fan of halo, that's a price I can live with.

Branden Brushett
Branden Brushett

Spot on analysis. I really want to play ODST, but I just can't bring myself to fork over another $60 for it. I know it costs the developers money and they need to get paid and all, but I don't believe as a gamer, I am getting as much game for my buck. Considering they mentioned ODST was going to be $40 originally, I would have been happy if they stayed at that price point.People who did not buy Halo 3, got a pretty good deal with ODST due to the multiplayer maps being included. I kind of regret buying the Map Packs each time they came out now. We're all a bunch of suckers!Who's to say ODST wouldn't have sold twice the amount they did, had the cost been lower? Who knows? Just a thought.

Lloyd
Lloyd

What amazes me is the willingness of gamers, not only to accept the Nickel and Dime model, but to avidly defend it. You'd think they'd defend their hard earned cash a little more.

gobbulmaicoque
gobbulmaicoque

I agree with the sentiment of this article. Why in the hell should any gamers care about development costs, unless your job is in the game industry? Inflation hasn't had nearly the same increases as the dev cost increases you mention. That's their business: make the best game they can while making the most money they can... find ways to cut costs, I don't give a crap. If tech increases like it always has, then this means we'll be paying $100-150 per game 2 years from now... not to mention Rock Band 6 or a driving simulator peripheral for over a thousand bucks each.

Name
Name

Halo 3 does not justify taking in the 2 year xbox live cost (and it is cheaper online to buy at amazon.com). Discussing the game prices is 1 thing, but Xbox live has many features that justify its price tag, not you own halo 3/ODST and 2 years down the road you spent $3.__ a month to play online along with other stuff. And also, not everyone buys the map packs, or ODST, some do, and to them its probably somewhat justified if they shell out the $$ in the first place.Just a few additions

tybalt
tybalt

If you buy CoD for Xbox, the pricing isn't much less than Halo, include the console, the myriad of games released at $60, the same fees and what not.If you're going to say 'play it on the computer!' Well, a gaming computer can cost you about $2000 and will be obsolete tomorrow.

Rob
Rob

You're off on the Halo vs. Call of Duty comparison. If you count Gold membership in Halo, you need to count it in Call of Duty as well

Worf
Worf

Technically, if you are a Halo fan, you wouldn't have bought the standard version of Halo for $60, or even the Limited edition for $100. You'd have sprung for the $150-ish Legendary edition, and the $100 Halo 3: ODST collector's edition.Though, it might be unfair to include 2 years of Xbox Live Gold service in the price, since if you purchased all 4 Call of Duty titles, you'd also have to put up $100 for that over 2 years, also. It's true if you used your Xbox exclusively for Halo, but if you do Rock Band, Guitar Hero, etc., you'd have to ante up that price as well. And nickel and diming has been around for years. Prior to the iPhone, the best-selling phones were "free" phones, while you got nickel and dimed elsewhere, notably in the contracts. In fact, Halo isn't the first example I'd use on the Xbox - if we stick with the 360, I'd say the accessories that Microsoft dings you for. If you need wireless, it's $100. If you need 20GB of hard drive, it was around $100. These days, it's $120-ish for 120GB drive, something you can buy on the street (laptop) for much less. Or the various bits of themes, gamer pics, and other crap that's being charged for.

Daniel
Daniel

Because, of course, the designers, programmers, and testers all work for free right?

website design
website design

That would be great if it were indie developers, but look at who the biggest offenders are here: EA, Microsoft, Activision Blizzard (with their game-hating CEO), Capcom... do you really feel warm and fuzzy when you give them more money? These are corporations no longer any different than all the other biggest corps in the world, and if you think a slice of that $2 you pay for a new map is going to the designers or the programmers or the game testers, you are wrong. Its going into the company vault, its going to the government, its going to investment, and its going to the exec board. And its going down on a spreadsheet to show to stock holders so they can get capital to develop even more DLC-intensive software.

website design
website design

That would be great if it were indie developers, but look at who the biggest offenders are here: EA, Microsoft, Activision Blizzard (with their game-hating CEO), Capcom... do you really feel warm and fuzzy when you give them more money? These are corporations no longer any different than all the other biggest corps in the world, and if you think a slice of that $2 you pay for a new map is going to the designers or the programmers or the game testers, you are wrong. Its going into the company vault, its going to the government, its going to investment, and its going to the exec board. And its going down on a spreadsheet to show to stock holders so they can get capital to develop even more DLC-intensive software.

deftangel
deftangel

He means Call of Duty 1, back in 2003.

Grift
Grift

Halo 3's one day sales dwarf Call of Duty's too. That's also a different order of magnitude. Halo 3 would have been instantly profitable, regardless. It's insane to even consider that the prices this generation are *purely* a reflection of increasing development costs. They're a reflection of the markets willingness to pay out...Valve must be bleeding money, giving me all of this awesome content for free!

deftangel
deftangel

If you are going to compare last-gen prices it would be fairer to also consider last-gen costs. Halo 3 cost $30m to develop and another $30m in marketing before it had sold a single copy. On top of that, Bungie have to run several massive server farms to handle the provision of match-making, stat tracking and user-generated content. This is not an insignificant undertaking, B.net recently hit 15m unique players.The first Call of Duty likely cost 10-15% of this initial cost maximum over it's lifetime. It's a different order of magnitude. The rise in costs have outstripped the rise in what I've paid by a significant margin. I don't want to denigrate from your thrust too much as gamer concerns with regard to premium DLC are legitimate and Microsoft could certainly have handled Halo 3 better in this regard. They are certainly gobbling up profit from it but it's also fair to say though that the days where it's viable for most developers to invest tens of millions of dollars on a AAA game and ship it for $50-$60 and leave it at that given current production values are over. Assuming gamers want to see increased production values and not less then somehow a circle has to be squared. Premium DLC is one way of doing that, there are others but if the balance is right it isn't in itself the root of all evils. Misuses of it are.I would certainly argue that Microsoft haven't supported Halo fans who have bought all the DLC already with ODST well at all. I couldn't argue with the concept in general because it has it's place. Not everybody is a Valve who own a distribution network and can realise tangible benefits from releasing free content.

philliplynx
philliplynx

I would just like to point out that adding two years of live for $100 is overpriced, and assigning that cost as part of the Halo 3 experience is a bit odd given that it enables online Multiplayer for all games that support it. Also, I would like to point out that while ODST started out as a value oriented expansion, it soon ballooned into its own game. In short, it's like going to a movie, then going to that movies sequel, and adding up all the costs (popcorn, gas, tickets) and saying that was the cost of experiencing the first movie. While gas makes it easier to get there, it's not required. Same for popcorn.

Daniel
Daniel

Not arguing with the article (I wholeheartedly agree, but I can't live without my Rock Band DLC), but just an aside w/r/t MMOs: In the 5 years I spent playing Final Fantasy XI, I bought maybe 2 other games. A $15/month subscription is peanuts in comparison to the $70/month I've been spending on new games and DLC since I quit.

heartlessgamer
heartlessgamer

On the other end of the spectrum, a smart gamer can play a ton of quality games for $0.