Pachter: Activision's Modern Warfare pricing strategy 'is a test'

Analyst Michael Pachter reckons Activision's controversial decision to raise the price of Modern Warfare 2 has nothing to do with a weak Great British Pound.

"The price increase is a business decision," he told Eurogamer, noting that the pound is worth more today than when Call Of Duty 5 launched last year.

"Activision knows it has a 'hot' game, knows that the market will pay an additional ten per cent, and has decided to increase price accordingly."

Pachter thinks the question of whether this is fair is "a difficult one" to answer. Games, he explained, are cheaper to buy today but contain better graphics, gameplay and online functionality. And the latter service, while free to users, costs Activision to provide - although Xbox 360 owners must pay Microsoft for the privilege.

"My guess is that this is a one-time test for Activision, and that they will re-think the strategy after seeing if it angers consumers," offered Pachter. "If there is no consumer backlash, I think we may see higher pricing on other games, regardless of the GBP/USD translation rate."

And, he added: "The repercussions could be significant and lasting. If Activision is successful, we may see increases for other 'hot' games in the future. We see tiered pricing to the downside for more casual games, so why not tiered pricing to the upside for hot games?"

Activision revealed the suggested retail price of Call of Duty: Modern Warfare 2 would be set at GBP 54.99 earlier this month. Retailers may only take this figure as guidance, but the bump will be felt nonetheless.

And it's not just MW2; Pachter suggested keeping in mind the price of the Guitar Hero franchise, which has generally gone up. Band Hero, he adds, will be more expensive than GH World Tour, and Tony Hawk Ride and DJ Hero will cost a considerable GBP 107.99. And on all platforms; no discount for PS2 and Wii any more.

What does Activision have to say? "I'm afraid we don't comment on our product pricing strategies," a spokesperson said this morning.

"This is the year that Activision raises prices selectively for several games," concludes Pachter. "and the US increases don't have anything to do with foreign currency translation."