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Last Updated: Thursday, 19 May 2005, 12:45 GMT 13:45 UK
Price fears for next gen games
Alfred Hermida
Technology editor, BBC News website in Los Angeles

Screenshot of Dead or Alive 4 for Xbox 360
Much deeper thinking about how to exploit new consoles is needed
The games for the new consoles, such as the PS3, Xbox 360 and the Revolution, are set to wow players with heightened realism and cinematic graphics.

Some of the next-generation games showcased at the E3 games expo have already drawn gasps of amazement from the audience.

But there is a price to pay for getting to play something that is years ahead of current games.

New games are set to cost twice as much as current ones to make, say analysts.

With the bill for some big budget games now reaching $10m (5.4m), producers are facing costs of up to $20m (10.9m) a title.

We need a much deeper level of thinking on how we can exploit these machines
Simon Jeffrey, Sega president
"Teams working on a title can be one and half times the size today," said Scott Cronce, chief technology officer at games giant, EA.

"The budgets are bigger, the number of people working on it is bigger," he explained during a conference session on next-gen games at the E3 games expo in Los Angeles.

"EA has teams as large as 200 people or potentially as large as 300," he said, "but we also have teams as small as 50."

With so many people working on one big release, the bills quickly add up.

Price push

Many in the industry would like to push up the retail price of games, from $49 in the US to $59 or $69.

The question no one knows is whether gamers will be willing to pay a premium for PlayStation 3, Xbox 360 or Revolution titles.

Screenshot of Killzone for PS3
There are fears that gamers will get bored of the same games
"We are seeing some $59 price point for current generation games," said Edward Woo, financial analyst with Wedbush Morgan Securities, explaining these tended to be special collectors' editions.

But he questioned whether an extra $10 a sale would be enough to cover the cost of making the new games.

"You're going to have to raise the price by more than $10 to get a return on your investment," he warned.

One idea that has also been tried out is getting players to pay for added extras to a game.

For example, fans of the best-selling Halo 2 game can buy and download two additional maps for a few dollars.

Over and over

But there are some who are sceptical that these micro-payments will add up to big sums of cash.

"I'm super adverse to this idea of just getting more and more revenue out of our players," said Mark DeLoura, Manager, Developer Relations at Sony Computer Entertainment America.

I do worry that we are going to see decreased risk and decreased innovation
Mark DeLoura, Sony Computer Entertainment America
"Me as a player, I am not going to keep buying stuff over and over again, unless I am super keen on the title."

For game enthusiasts, the next-gen consoles could be bad news as spiralling costs could mean game publishers end up putting out new versions of current games.

"I do worry that we are going to see decreased risk and decreased innovation," said Mr DeLoura.

"I fear that players are going to get bored because when they go to the store, they will see the games they played last year."

Other big names in the games industry shared these concerns, realising the challenge and opportunity offered by the computing power of the new consoles.

"We need a much deeper level of thinking on how we can exploit these machines," explained Simon Jeffrey, President of Sega of America.

"We are all a little bit nervous as we don't just want to see current generation games with high production values."

Some of the next generation games demonstrated at E3 look remarkable. But many of those crowding into the Los Angeles Convention Center for E3 realise that pretty looks are not everything.

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