Another Look into the Rise of Xbox Live Arcade Prices

Editor's note: Inspired by a post on Kotaku, Thomas predicts future XBLA prices based on current trends. I agree with Lance Darnell's comment, though -- I'd love to see this data cross-referenced with average review scores. Those have to be trending upward, too. -Demian

Kotaku recently reported that Xbox Live Arcade prices are on the rise. Stephen Totilo’s analysis was correct, but I did my own study of XBLA pricing and uncovered a few more interesting trends. I used every XBLA title that has not been delisted from November 2005 to July 2009 and did a yearly analysis of the average cost of XBLA titles.

Year	2005	2006	2007	2008	2009
Total Games	14	27	63	72	51
Average Microsoft Points	514.29	518.52	628.57	800.00	847.06
$ USD Conversion	6.43	6.48	7.86	10.00	10.59
Standard Deviation	244.50	243.43	212.08	222.66	306.17

Average Difference between 2005-2006 and 2007-2009	$2.97

2007 was a major turning point for XBLA: The average price of XBLA games increased by $1.38 USD compared to 2006 (from 2005 to 2006 the average price increase was $0.05 USD); the number of games almost tripled, 27 to 63; and the standard deviation of XBLA prices decreased significantly, meaning more games at a more expensive price point. Looking at XBLA currently, the average price difference from 2005 is $4.16 USD.

This data can be intepreted in many ways. Perhaps more XBLA games are fully-featured rather than simple rehashes of old IPs. Maybe Microsoft was testing the market to see how downloadble games should be priced, and started on the low side. Or maybe Microsoft isn’t finished raising prices. I'll extrapolate how that scenario could work out below:

Expected Values

Year	2005	2006	2007	2008	2009	2010	2011
Average	470.60	567.32	664.04	760.76	857.48	954.20	1050.92
$ USD Conversion	5.88	7.09	8.30	9.51	10.72	11.93	13.14
# of Games	12	33	54	75	96	117	138

There have been 51 games released so far in 2009. That is double the amount of titles released in all of 2006. If this trend continues, the expected number of XBLA titles for 2009 is 96, for 2010, 117. And if this pricing trend continues, the expected average price of XBLA titles in 2010 is $12.00 USD. Will the projected increase of XBLA prices act as a catalyst for better quality games, or will this oversaturate the service with mediocre titles priced too high? I hope the former becomes true.

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Comments (8)

I think you should cross-reference the cost to the average rating of the games of that year. I think you will find we are paying more, but getting more. Great work too!!!

Lance Darnell, August 06, 2009 11:21

I think that we are receiving better games. Compare 'Splosion man (for example) to any game that came out in 05-06 (save for Geometry Wars) and I bet it beats them all. I think the price increase is fine, as long as the quality of game is worth. A great example is the new Turtles in Time game. I don't want to pay $10 for another re-hash that has 15 year old controls and levels, but I have no problem paying $15 for a game like Castle Crashers, Shadow Complex or Braid. Anybody who won't buy a game because it's more than $5 or $10 no matter what is just ignorant. It's like saying I wont buy a next-gen game because they aren't $50 anymore.

Alex Bowen, August 24, 2009 09:45

@Alex splosion Man does not beat UNO ;D

Toby Davis, August 24, 2009 09:56

I agree with Alex. So this data seems to be biased. To really find out if prices are rising, you should break off original IP and ports. Penny Arcade live games were $20 each but Trials HD is only $15. And just based on my experience, the price if games has not changes significantly. Although other ares of the market place, movies and DLC, seem to be creeping up.

Joshua McCluskey, August 24, 2009 10:03

Standard Deviation AH!, Thank you for bring back haunting memories of the two stat courses I had to take on college.

Rich McGrath, August 24, 2009 10:31

There is one extremely simple explanation for why XBLA prices started to go up in 2007: In March of that year at GDC, Microsoft finally relaxed the size limit from 50 to 150 MB, which started the whole trend for XBLA games to get bigger and more featured. Back when the 360 was released, Arcade games were cheap, bite-sized games that had to be small enough to fit on the 64 MB memory card - it was part of their "We can say we're cheaper than the Wii if the base version is only $200!" strategy. We can all thank the XBLA version of Castlevania: SotN for forcing MS to relax the size limit: that sucker came in at a whopping 97 MB! :o Since there's no real size limit on Arcade games any more (how big was The End Is Nigh, 4 GB or something?), I doubt that prices will keep increasing at the same rate. The median price should probably stay at 800, with enough 12/1600-point games to skew the averages.

Brian Petro-Roy, August 24, 2009 10:53

@Toby: Please, don't mention UNO -- I've had bad experiences with that game. Eeeeewwww. Regarding the article: As long as the quality of games keep rising, I don't mind if the prices rise, either. Hell, I would've payed more than 1200 MP for Shadow Complex -- it's one of my favourite games!

Michael Burridge, August 24, 2009 14:27

This is interesting data. A more thorough analysis, including sales figures, review scores, and perhaps average length of the game (or average play time per purchase, if those numbers are available) could address the issue of whether or not the "value" of titles is changing.

Matthew Reichert, September 02, 2009 08:51

WHAT THE HECK IS A BITMOB?