Videogame Prices Are Falling

Just as the leaves fall to the ground around this time every year, so do current generation videogame prices. Electronic Arts, the largest game maker in the world, was the first to slash prices this week on PlayStation 2 and Xbox games. Anyone who's familiar with the game industry knows that those who wait till be rewarded with savings.

EA cut the price of its bestselling "Madden NFL 07" on Xbox and PS2 from $50 to $40 this week. A total of 10 EA games across PS2 and Xbox all received similar slashes, including "Tiger Woods PGA TOUR 07" and "NCAA Football 07." Other games, like "NHL 07" ($30) and "NBA Live 07" ($40) shipped at lower rates because of competition from 2K Sports, which still sells brand new games like "NBA 2K7" ($30) and "NHL 2K7" ($20) for low prices from the get-go on Xbox and PS2.

The reason for these cuts, and I expect other companies to follow suit as we head into Thanksgiving, is to try to sell as many copies as possible before the shelves get really crowded. November and December account for over half the annual videogame sales for the industry. As a result, all the game publishers release their biggest games in October and November, which crowds shelves. This year, we also have the launch of two new systems with PlayStation 3 and Wii.

One thing that won't change is the pricing of next gen games, which still go for $50 to $60. That's because the gamers are willing to spend whatever price to get the best games first. The current generation gamers are often more casual, or those who are willing to wait for a better deal. And they're being rewarded at the cash register.