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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Cirruslvr who wrote (94566)	2/22/2000 12:07:00 PM
From: Scot	Respond to of 1573850

Do you or anyone else know how the royalty works with Nintendo, Sony, or Sega? I can't speak with any authority on the issue. I did, however, happen to read an article this morning that mentioned it: mcvnow.com Bonnell: Lower Pricing Is Key to Mass Market, Piracy War Broadening the market for entertainment software has nothing to do with technology. It's all about game design and price. That's the message from Bruno Bonnell, chairman and CEO of Infogrames, who spoke at this week's Milia festival in Cannes, France. And with next-generation platforms portending a significant jump in development costs, resolving the conflict between the mass market's demand for cheaper software and publishers' need for higher return on investment will be the key issue, Bonnell said. On developing for next-gen platforms such as PlayStation2, Bonnell said, "We're talking $4 million to $5 million a game. It's true that the publisher wants to see a return on investment and therefore increase the price of the game. I do believe that the tendency is going to be the other way around and [that] we will see in the future prices [that are] more accessible to the mass market." Combating piracy will be key, Bonnell continued. "In terms of pricing, we have a responsibility as publishers to fight against piracy. Today, software costs about $39 to $49 [for a premium-priced PC title]. In the schoolyard today you can find pirated copies for less than $2?. We can fight with ad campaigns, we can fight with a lot of [court] trials, but the best way is still to lower the price. It might sound strange as a publisher, but the only way to lower the price is to increase our installed base, to promote interactive entertainment, to extend the number of people having PCs or consoles at home. [We must] go on believing that this market is going to be strong, and bet on the future of this market. "I think the right price should be around the CD audio price." "I'm definitely convinced that price is the key to the piracy problem," Bonnell stated. "I think the right price should be around the CD audio price. "If you take a $40 CD-ROM, maybe a kid is going to buy two [games] in a year, [and] it's going to generate $80 of business. If you lower the price to $20? it will probably go to 5 or 6 [copies sold]." Cutting the price of PC software is one thing, but on console it's more difficult, as Nintendo, Sega and Sony charge a licensing fee of several dollars. Bonnell said, however, the console makers are listening. "They?re very receptive, and they've changed their business model, which is good news, especially on PlayStation." Based on the PlayStation's big installed base, Sony is preparing for the launch of PlayStation2 and "realizing the mass market is not the $40 or $50 business," he added. Bonnell also called for a global negotiation between publishers, manufacturers and distributors. If the industry is to expand the business, "I think that it's reasonable to expect that people would be ready to listen," he said.