Game Prices and the Switch 2.

Hello, you exceptionally exceptional Patreon People!

I hope that all of you are doing absolutely amazing, that all your dreams and wishes may come to fruition and even more importantly, that every single one of you who plans on grabbing a Switch 2 actually manages to get your pre-orders in, before the console sells out. Or that the pre orders will actually start at some point if you are US based, what exciting times to be alive!

So first things first, as some of the most observant of you may actually already have noticed, there is a little video embedded above this text.

What is going on?

What evil witchcraft is this?

Well, the thing is the following.

I thought it might be a fun idea if I were to actually waffle these little updates into a microphone, because I have a suspicion that might be something that some of you appreciate.

It gives all of us a nice little podcast-like format that we can tune in while cooking, or while grinding our cooking skill in runescape, or whatever!

I’m not entirely sure if I’ll be able to record every single post, but it’s something that I plan to do whenever it makes sense going forward. 

Just to add a little bit of value to your hard working Patreon dollars!

The text below is ident to my waffeling in the video - I thought I still post the script to the video as well however, because you never know: Maybe one of you still prefers to consume their media via this hip cool trend of the 1770's called reading!

So let's talk about value!

You see, at the end of the little DK Bananza trailer analysis video I mentioned that I think the price increases don’t make much sense from a marketing point of view.

And I want to share a bunch of additional thoughts on that matter.

You know, how to price a console and their games, what Nintendo maybe was thinking with their price increases and whether all of this is likely to be swallowed up by consumers.

That’s not meant to be a complainy “high prices are too high” hot-take, but a why high prices so high hot take, with only a couple of flavorful drops of complainium mixed in there to slightly increase the fragrance.

So first things first, in case someone missed the bad news.

Nintendo plans to increase the prices for first party games on the Switch 2.

In the US new first party Nintendo games will cost either 70$ or 80$, and either 70, 80 or 90 euro in the EU. 

The bigger difference in EU prices is because the EU is going to pay 10 euros extra for physical releases, something they plan to do in Japan as well.

As far as I can tell physical and digital prices will be the same in the US but that is really difficult to confirm right now, because famously the pre-orders aren’t live yet.

Which already brings us to our first rather interesting question doesn’t it.

How in all the fuzzies' names did Nintendo end up with this pricing policy?

Games for 70, for 80, for 90, different prices for old games, different price hikes, different prices for games in retail vs physical, different pricing policies depending on the country, different prices for their new releases and a lot of confusion.

There has been an insane amount of misinformation floating around lately when it comes to the prices and for once I have to defend the internet for spreading misinformation.

It is really surprisingly hard to figure out what Switch games are actually going to cost in any given country.

I’m writing a script on the matter and even I am still slightly confused.

The messaging has just been all over the place.

Which raises a question, doesn’t it.

What happened?

What in all the fuzzies names was Nintendo’s line of thought here?

How does something like this happen?

Well, I’m glad you are asking, rhetorical patreon person, because I got a little cat-spiracy of what might have happened.

Let’s swap our shoes for a moment.

Let’s leave our own comfortable pair of crocs or whatever it is that you are wearing behind for a moment and let’s slip into the shoes of the crafty little marketing experts at Nintendo.

You see, at some point in the past those experts were evaluating how the Switch became so successful - looking for ways to repeat this success.

And there is one thing that is just plainly obvious when looking at the Switch era from a distance.

The Switch had an insane advantage over all the other consoles this generation.

People just bought a lot more games on it, then they did on any other console.

The software sales were incredibly high.

This very fact is what printed Nintendo so much money.

And marketing people, being marketing people, obviously take this historic trend and extrapolate it into the future.

They probably expect that Switch 2 games will continue to sell as well as Switch 1 games did.

So far so good.

We got the Switch 2 and we expect that all games that we release on it will have equally high attachment rates as Switch games will.

All that we now need are lots of games and we got a winner.

But.
Oh no!

A problem!

A catastrophe!

Where do we actually get our games from?

If they want to continue to print as much money as we did in the past, then we will have to release equally many games!

How are we supposed to produce so many games as we did in the Switch era?

Afterall lot’s of successful Switch games weren't Switch games but actually Wii U ports.

But Nintendo is all out of Wii U games.

The portening is over, there is nothing left in the port to be ported.

They kinda overported it. 

The porty is over.

Oh and no!
But how does Nintendo sell old games to new customers if there are no Wii U games left in the basement?

Well, that’s the big marketing challenge that we in our role as Nintendo’s marketing overlords now have to solve.

And nifty as we are, we find a solution.

We solve the problem via upselling!

We evil little geniuses!

You see, upselling is a common strategy in marketing.

The idea is that it is really easy to sell someone something on top of a product, once they have already bought the product. 

A person that already bought the much more expensive original product, is much more likely to pay a little bit on top of it - or so the theory goes.

It’s why nowadays most purchases end with a button asking us if we want to insure our copy of Mario Kart Jamboree or how Tesla came up with the brilliant idea of selling cars whose features you can only fully use if you also subscribe to a monthly subscription after buying the car.

When we sell people something on top of the thing we just sold them, it’s called upselling.

And upselling is at the core of Nintendo’s launch strategy for the Switch 2.

The idea is that people that already own a game are likely happy to pay 10$ on top of it for a nice little upgrade of said game.

So what upgrade could we possibly sell to people who already own our old games and now bought a Switch 2.

Well, what if we were to charge them a tiny little fee to actually use the features of the console they just bought.

Have them pay 10$ to up the resolution, raise the framerate and enable HDR, for example.

And thus, we wave our magical marketing wand and via the power of love we transform an old game into a new one.

Afterall people really liked Tears of the Kingdom, so they are going to love it if they can now play it in our upgraded version.

Awesome!

We are doing really good here because we not just invented a new product without doing any work whatsoever, we even upgraded an old one.

The 10$ upgrade for Tears of the Kingdom also increases the value of the base game.

You see, Tears of the Kingdom is an old game.

It’s a Switch 1 game.

Usually people don’t want to pay full price for old games.

But Tears of the Kingdom is no old game anymore.

We just sprinkled so much magical marketing dust onto it that it now is a totally new game.

It is now the Switch 2 version of Tears of the Kingdom.

An enhanced product, elevated not only by the vast unlocked power of our new console, but also by our lovingly created app that our interns cobbled together over the weekend!

You see, if there are people out there that are willing to pay 10$ today to upgrade a purchase they made years ago for 70 bucks, then we obviously can also sell Tears of the Kingdom for full price to new customers.

Afterall we pulled this trick all the time with Wii U games and people loved it there!

And thus here we are, proudly looking at our new premium product until …

But … oh no!

A new problem.

We overdid it.

We added too much value to the game.

Our brilliant upselling actually added so much unbelievable value to the game that we are suddenly charging more for it than we do for our actual new games.

Whoopsy!

We just raised the price of Tears of the Kingdom to 80$.

It’s not a good look if we charge more for Tears of the Kingdom than we charge for our big launch game is it?

Let’s better raise the price of our launch title as well and let’s make sure we don’t release any games below this price-point anymore.

But … oh no!
The next problem.

Hm … how do we solve this little mess again?

As it turns out our games are suddenly really expensive compared to the other games on the market!

Sony only charges 80 Euro for their games but we now charge 90.

We really shouldn’t charge more than Sony but we also really want to sell this nice little Tears of the Kingdom 10 bucks upgrade pack and we obviously don’t want to lower the price for original Switch games, because that would be absurd, so how do we solve this new mess?

Well, luckily we also find a solution for this little problem.

What if we give all the people that buy digital copies of our games a discount?

People love discounts afterall and physical games have been … you know, just like really annoying for ages.

You have to print the games onto those small expensive little cards, you have to worry about nasty shipping costs and icky logistics and whatnot. 

People underestimate how much of a nightmare it is to get a physical game to the right store, at the correct time and once you finally manage to get the dumb tiny game card game onto a shelf it may end up selling through the inventory immediately and you have to do it all over again.

But worst of all, people are actually able to sell physical games again that we sold to them - can you imagine.

There are people out there that sell our games without us earning a penny.

Digital games however.

Well, digital game are chill.

They are a lot nicer to work with.

So if we actually sell our physical games on a discount we solve a couple of problems at once.
We don’t have to worry about shipping and logistics, we are still selling our games at the same price as Sony is and best of all, customers are going to love it because they get their games at a discount.

It’s a brilliant plan, that makes a lot of sense doesn’t it.

That is, it makes a lot of sense while we are wearing those shoes.

But if we were to actually return our marketing shoes for a second and return back to the real world we might be able to poke a whole or two into this brittle little plan.

Because sadly, none of those nice little marketing optimization tricks that we just discussed make any sense whatsoever as soon as reality comes knocking.

What’s the big problem?

It’s that the Switch is not the Wii U.

Let’s talk about who actually buys Nintendo consoles for a second?

So there are maybe 30 million hardcore Nintendo fans out there that will buy the console and tons of games on it no matter how much Nintendo screws up.

It’s the people that bought a 3DS at launch, the people that still speak fondly about the Gamecube days and the people arguing that the Wii U was actually one of Nintendo’s best consoles and only failed because of marketing.

It’s delusional Nintendo fans that will eat up anything Nintendo serves them.

Dum-Dums like myself!
If we are honest for a second: I’d probably buy the Switch 2 if it was just a Nintendo 64 that they glued onto a CRT TV, and I’d probably still be happy about it.

It’s not that difficult to sell a Nintendo console to me.

But unfortunately for Nintendo, there are customers out there that have higher standards than I do and those consumers have a name.

We here in the hardcore capital G gamer business call those alien creatures: The casuals.

Casuals are what will make or break the Switch 2.

It’s parents that buy a switch for their kids, it’s your aunt that once sees Ring Fit Adventure in action and then buys the console as a way to stay fit, it’s people in their late 20’s that don’t really play video games anymore and mistake peach for zelda but that really enjoy playing Mario Party with their husband every once in a while and so on.

Nintendo needs to get the console into the hands of those folks if they want it to be a success, and those folks all already own a Switch.

Which is the first problem in Nintendo’s clever little marketing plan.

Here’s a question!

Why did games like Breath of the Wild continue to sell for the entire console generation?

Why were people still buying Breath of the Wild five years after it launched?

And the answer is kind of obvious isn’t it?

It’s because new people were buying a Switch every year.

And this is Nintendo’s problem.

Who exactly is the customer that they plan to sell Breath of the Wild for 70$ on the Switch?

Everyone who owns a Switch and had interest in playing Breath of the Wild already played it.

Because the Switch 2’s target audience are people that own a Switch.

Right now Nintendo’s priority number one is it to sell a Switch 2, to everyone who already owns an original Switch.

An already insanely difficult task.

But if most people buying the Switch 2, are people that also bought the Switch then that raises the question who the mysterious customer is supposed to be, that buys Tears of the Kingdom for 80$ as if it were a new game.

You see, I strongly suspect that someone at Nintendo noticed that Mario Kart 8 was kind of like a Wii U game, but it sold really well on the Switch, and thus came to the conclusion that all Nintendo games can continue to sell well during the next console generation.

They might believe that their old games don’t lose value.

And I have this strong suspicion that this very idea was put close to the center when they were coming up with their strategy for the Switch 2.

But that kind of ignores the fact that pretty much no one bought a Wii U while the Switch might end up becoming the best selling console of all time.

There are just barely people around that did not already play Tears of the Kingdom on the Switch that will get a Switch 2.

And I think this little problem here is at the core of Nintendo’s weird price messaging.

I’m super guessing here obviously, but if they refuse to acknowledge that their old games ever lose value, because that’s what happened with the Wii U … and if they plan to do heavy upselling on the old games they already released, then those two facts kind of dictate that the prices for first party games drastically raise to the point at which they are.

And I believe they then probably thought in reverse and thought that they at least can give people that buy digitally a discount, to offset how high the prices are right now.

And that’s how we end up with such messy messaging.

You see, they are doing tons of things at once with their prices. 

They are pricing old games as if they were new premium games.

They are pricing new games at the same price point as Sony does.

They are pricing games with a clear goal to reduce physical sales.

And they are pricing some of their games unusually high while at the same time launching Donkey Kong at the same price point as Tears of the Kingdom did last generation.

They are trying to do way too many things at once and this is causing so much confusion.

You know, depending on how you look at it we can argue that Nintendo is raising prices for their games by 50% while at the same time we can argue that there is no price increase going on at all.

Someone, somewhere in the marketing department obviously overengineered the pricing policy and the result is an incredibly confusing mess.

It’s a marketing messaging disaster and I personally strongly suspect that the core of the problem lies within the fact that they are not willing to just drop the prices of their original Switch games a bit, because selling Wii U software worked so well for them.

Awesome, so that’s one possible explanation on how we ended up with all the confusion.

But … that does not explain another thing.

Because all of this might cause confusion.

But confusion doesn’t necessarily cause outrage.

It does not explain why people ended up being so angry at Nintendo for their price increases.

Why were people so mad?

And this question is actually a lot more complicated to answer than it might appear at first glance.

You see, if we take a look at the US inflation data, then we see that 60$ in 2017 is actually worth roughly 78 dollars today.

Which means, you know, adjusted for inflation, Nintendo is actually launching their games at pretty much the exact same price point as they did on the original Switch. 

So why are people so mad?

You know, you always get a backlash when raising prices, but usually people don’t get this disproportionately angry when something gets adjusted for inflation.

Why is Nintendo running into so much opposition if all they are doing is to adjust for inflation?

And I believe that the big problem here is that Nintendo does not operate in a vacuum.

You see, people don’t calculate how valuable a game is to them in relation to the historic inflation chart.

They calculate it in relation to the price of other games.

And games in general do not cost 80$.

I can grab Minecraft for 20$, Hollow Knight is 15, I can get a physical copy of Monster Hunter Wilds at my retailer for 60 Euro, I can get access to avowed and starfield and whatnot for 20$ a month, I can buy a two year old Assassins Creed game for 25 bucks on a sale, and I can play path of exile or fortnite or overwatch or whatever for free.

The vast, vast majority of all game sales are just taking place nowhere near the pricepoint of 80$.

So in relation to every other game out there, 80$ is extremely expensive.

It just doesn’t matter how high general inflation is, if the general video game market does not follow it.

Nintendo is now selling the most expensive games on the market - period.

And lots of folks don’t perceive Nintendo games as being that valuable.

You know Mario Kart is a valuable brand, but they are charging a lot more for it then other companies do for their most valuable brands and those companies quickly drop the prices after launch, something Nintendo never does.

I believe it is this overestimation of Nintendo’s brand power, that makes people so mad.

Hooray, I guess!

So finally, will all of this have any impact on the Switch 2 launch.

You know, is Nintendo likely going to have troubles selling the consoles, or is this just one of those many gamer revolts that slowly fiddle into nothing as everyone gets used to buying games for that price.

And I actually believe that they will have trouble selling the console - but not necessarily because of the game prices - though those certainly don’t help.

The real problem that I believe they are about to run into, is that they overpriced the console as well.

So a hot take that I stumbled over quite often online, is that the Switch 2 is priced rather fairly, when compared to the steam deck.

And I actually do agree that the console seems to be priced fairly when considering the hardware and comparing it with similar products.

The problem here is just that casuals aren’t comparing the price of the Switch 2 to the price of a steam deck, they are comparing it to the price of a ps5 slim.

Historically handhelds have been less expensive than home consoles were so the expectation for the Switch 2 is to be cheaper than a home console.

This doesn’t necessarily make any sense when we actually talk about the hardware inside the console but expectations that people have for the price of a product aren’t necessarily logical.

Especially when it comes to low informed consumers, which … you know, a lot of Nintendo’s customers are.

When people go to the store and see that a ps5 slim with astro bot is 400$ but a Switch 2 with Mario Kart is 500, then they perceive it as expensive.

That doesn’t matter for consumers like myself, but it absolutely matters when it comes to the question whether timmy gets a switch or a playstation for christmas - especially when all the games on the switch shelf are more expensive than the games on the PS shelf, and it absolutely matters when it comes to the question if my aunt gets a Switch 2 with the next ring fit game or if the old one is still good enough.

So I personally think Nintendo is pricing old games too aggressively on the console, I think they are pricing their new games too aggressively and I believe launching with a higher price then a PS slim is way too aggressive.

Which kind of leads me to believe that they will have quite the rough console launch.

So should we be angry?

You know, should we take the fight to the streets, should we demand them to drop the prices?

And the answer is nah - who cares.

Why are people online always so quick to anger!

It’s really Nintendo’s problem if they price the console so aggressively that casual people don’t pick it up, not ours.

If anything it’s good for us as consumers, because historically Nintendo has been a lot more fun when they were with their back against the wall clawing for survival, than when Nintendo was too sure they got this in the bag.

I actually think that there’s lots of reason to be hyped for the console, because it appears as if Nintendo nailed the one thing that matters the most to me - the one thing they can’t fix later down the road - the actual console itself.

I personally really look forward to the console and you know it doesn’t impact my enjoyment of the console if Nintendo fumbles the launch.

I just think that it is really interesting that there are certain lessons that Nintendo just doesn’t seem to learn.

Hooray!

My little, hey let’s waffle the ten minute patreon posts into a microphone how much work can it possibly be - gone rogue.

Before we wrap this up there is one more thing that I quickly wanted to mention.

You see, there is a really interesting game releasing soon … actually tomorrow.

A really interesting game that a lot of you probably don’t have on your radar yet, so I thought I’d quickly mention it.

A little game called Blue Prince.

The game is a bit of a weird mash up of a puzzle game with deck building elements that takes place in an ever changing mansion and I honestly can’t say much about the game, because I haven't played it yet.

Which might make you wonder why I’m waffling about it.

Well, it’s because the review embargo for the game ended two days ago and I have never ever before seen an indie game debut to such glowing reviews.

It is currently sitting at a metacritic score of 92, which makes it the best reviewed game of the year so far and Jason Schreier, whose taste in games I usually share, called it one of the best games of all time.

I’m not affiliated with them in any way or anything. 

I just never before saw so many people getting so excited over a niche game - and since the game will launch directly onto game pass and onto the ps+ subscription thingy, I thought I bring it to your attention.

Hopefully it’s as good as I suspect it to be, because given the state of the world I really, really could need a good indie game right now.

Hooray!

That’s all that I wanted to waffle about today.

Let me know what your thoughts are on me waffling those little posts into a microphone and while you are at it I’d also love to hear your thoughts on the switch 2.

Finally, as always a gigantic and huge thank you to you for your support.

You folks are all seriously awesome and I hope you know it!

Till next time, lots of hugs!

Game Prices And The Switch 2 - Patreon Post 1. (YouTube)