Next-Generation Xbox Games Might Eat Up Your Next Paycheck

'King Kong,' 'Madden,' 'Call of Duty' fetching $60 retail.

The Xbox 360 launched last week, garnering much fanfare for the $400 premium version of the system that gamers lined sidewalks to buy and that eBay bidders spent up to $1,500 to get their hands on. The $400 tag hasn't been seen on a game console in America since the 1995 launch of the Sega Saturn.

But that wasn't the only old-time price point making a return.

Those buying "King Kong," "Madden," "Call of Duty" or most other non-Microsoft-developed titles for the 360 will have noticed that — after nearly a decade of declining game prices — $60 gaming is back. Even within the gaming industry, the higher cost for games is getting a mixed reception.

Many developers and publishers say the reason for the price hike is simple: Next-gen games, because of graphics, coding, voice acting, cinema scenes and everything else gamers expect, cost more to make. "As a studio we can certainly speak to the amount of man hours and increase in staffing for next-generation content," said Cord Smith, the producer of February 2006 car-combat title "Full Auto." "As a gamer, it seems like it costs a lot to enter this new generation."

Smith said his team has had to include extra artists in order to render the combustible racing environments in "Full Auto" with the level of detail that will appear genuinely next-generation. Extra coders were needed to make sure the game can run on new hardware. That adds up to Smith's "Full Auto" team being 50 strong, compared to less than 20 who worked on "Cel Damage," the first Pseudo Interactive title for the original Xbox.

Smith's explanation has been echoed by several publishers and developers working on the Xbox 360, but not everyone in the industry thinks that an increase in prices makes business sense.

"What other entertainment medium that's mass market is at $60 a pop?" said Cliff Bleszinski, lead designer at developer Epic's 360 title "Gears of War," due next year. "If video game pricing continues to go up, we will crash."

Bleszinski, like Smith, acknowledges that developing a next-gen game is more expensive than making a title for an Xbox or PS2. He estimates that his "Gears of War" team will max out at 30 or 40 people, as opposed to the 25 he would have used to make a game for the pre-360 era. But he thinks increasing prices is not the answer. "I think video game prices need to go down," he said. "Fifty dollars is far too much for an impulse buy. Sixty dollars is completely out of the question."

At the launch of the 360, only the Microsoft-developed "Perfect Dark Zero," "Project Gotham Racing 3" and "Kameo: Elements of Power" are available for what has been the industry-standard price of $50. Titles from Electronic Arts, Sega, 2K Sports, Ubisoft and Activision all cost $5-$10 more than that.

"We believe that premium titles command premium pricing," said EA spokesperson Tammy Schachter when asked why EA's first-run 360 titles were selling for $10 more than the company's first-run titles for Xbox, PS2 and GameCube. "These are deep, rich, complex games."

Publishers acknowledge that some of the price jump is being used to cover the overall company cost of learning to create games for new gaming hardware. When asked why "King Kong" costs $10 more on Xbox 360 than it does for Xbox, Tony Kee, vice president of marketing at Ubisoft, said, "Today, creating and marketing games is more expensive than it ever has been. Higher prices on select titles compensate for those additional costs."

When interviewed by MTV News in September, Peter Moore, the Microsoft vice president in charge of marketing and first-party game development for Xbox, suggested another way to cover those costs: selling gamers extra content for their games via Xbox Live: "It may well be that we sell the game at $50 but then have a plan to maybe somehow get an extra few extra dollars revenue by value — adding to the consumer on top of that."

That approach could reap a company some cash in exchange for new tracks in a racing game or new levels for a first-person-shooter while keeping game prices down. But Smith, a Sega veteran, said there could be pitfalls. "Early market tests at Sega had people saying, 'Don't penny-pinch me,' " he said. " 'I don't want to pay 50 cents or a dollar after I buy a game for content that should have been there to begin with.' "

Joseph Olin, president of the RIAA-esque Academy of Interactive Arts & Sciences, pointed out that consumers didn't shy away from $60 in the past. "That price point was the norm during the glory days of the cartridge business back in the late '80s and early '90s until the advent of the PS1," he said.

In fact, games for the Sega Genesis, Super Nintendo and the mid-'90s Nintendo 64 sometimes went for even more. "I can remember spending $80 on a cartridge," said Smith, who, while in the seventh grade, had even spent $100 to import the Japanese version of "Strider" for his Genesis. It was Sony's entry to the market with the first PlayStation in 1995 that began to push prices down to $50 and even $40 for new games.

Still, the historical context doesn't pacify Bleszinski. "I'm a fairly successful video game designer who can afford a lot of $50 games," he said. "But there's a psychological barrier that I have there with a game that stinks that I spent $50 on. [It] still stings."

So he doesn't want $60. He doesn't want $50. "I would kill to have a [top-quality] game that's jam-packed with an amazing story and amazing moments and four hours long and costs 20 bucks." He said it's possible, if only the industry cut costs by making games shorter and sweeter, but that too many gamers and publishers demand 20-hour games that are filled with the padding of having gamers repeat the same tasks again and again.

Does this mean that "Gears of War," at least, won't cost a bundle on the 360? "I honestly don't know," he said. "It could very well come out and be $60 or whatever and I could sound like a hypocrite or whatever, but I am just one gear in the machine."