Optimal price for most video games is way, way below $60. A very large portion of video game sales come after the price is reduced or when it's on a deep discount, not to mention regional pricing.
Nope, 70-80% of income is being generated at full 1st world price, if price reduction is necessary to start generating income it's a financial failure.
I'm not sure I believe this, especially with the advent of massive amounts of DLC. It's probably true for AAA games that get lots of press coverage and end up being meh. Many games have very long tails.
If we look at CDP, we can see that they had an obvious bump on the release year of Witcher 3 but it didn't taper off anywhere near as much as you'd suspect if we go by your assumption:
Nearly all of CDP's revenues were made from a single game during this period(Witcher 3) so it makes them a good company to analyze.
From the report itself:
"In the first half of 2020 the CD PROJEKT Group's results were primarily affected by sales of The Witcher 3: Wild Hunt and its expansions (Hearts of Stone and Blood and Wine), sold separately as well as in the Game of the Year Edition bundle for the PC, Xbox One, PS4 and Nintendo Switch,"
While the chart obviously does not contain 2020, I don't think it's too farfetched to assume that applies to previous years as well.
From the horse's mouth itself, Witcher 3 made $50 million USD on Steam from October 1st 2018 to Feb 20th, 2020:
October 1st, 2018 is about 3 and a half years
after Witcher 3 launched.
But yes, there is a release bump. However, I don't agree that it's being maximized by the current prices. How many people end up picking a game up at $5(or pirating) would have actually bought it at release if it was $40 instead of $60? I'm partially judging this based on my own experience with DOS1 & 2, which were priced at $40 and $45 respectively -- I thought it was a good price that reflected their value. OTOH, Obsidian's Outer Worlds seemed ridiculous at $60.
Video games, from an economic standpoint, seem to be overpriced. Consumers expecting and waiting for games to go on discount before buying is a symptom of this.
[edit]
And for some numbers on a smaller, indie game:
The Age of Decadence:
2013-2014 (Early Access & Direct Pre-Orders): 13,124 units – $320,157 – $24.39 avg.
2015: 20,771 – $472,869 – $22.76
2016: 48,798 – $620,914 – $12.72 (50% discount is introduced in March)
2017: 43,808 – $293,714 – $6.70 (75% off on sale events throughout the year)
2018: 27,121 – $151,786 – $5.60 (reduced the base price from $29.99 to $19.99; 60-80% off sale events throughout the year)
2019: 24,141 – $86,794 – $3.59 (reduced the base price to $14.99; 66-75% off throughout the year)
What's interesting here is that he includes the average price paid for a copy.
Thanks for being transparent, Vince.
http://www.irontowerstudio.com/forum/index.php/topic,7822.0.html
