Could you soon be paying over $200 for a single video game?

Truth or jest?

That’s the question surrounding the recent comments made by Activison CEO Bobby Kotick in this week’s earnings call with investors.

The debate started when Tony Gikas, of middle market investment firm Piper Jaffray, probed the CEO for his opinion on current pricing policies.  In response, Kotick offered this playful retort:

Tony, you know if it was left to me, I would raise the prices even further.”

- Bobby Kotick, Chief Executive Officer, Activision

No matter what the intent, it hasn’t stopped Activision from already invoking a subversive price hike on the public over the last few years.  The company began testing the boundaries of the market back in 2005 with the release of the original Guitar Hero, a package that included the game and a proprietary guitar controller.  The bundle retailed for an MSRP of $69.99, roughly $20 more than a typical video game.

In the time since, Activision has only further grazed the edges of consumer patience.  However, thanks to a drop off in sales of music-based games over the last year, it’s starting to look as though these limits are about to be reached.  As a result, the company’s upcoming portfolio is beginning to seem quite risky by comparison.

The steady incline can be observed by taking a look at the recent (and upcoming) Activision portfolio, beginning with the first sequel to Guitar Hero:

Guitar Hero II — $89.99

Guitar Hero III — $99.99

Guitar Hero: World Tour (complete band kit) – $189.99

DJ Hero — $119.99

DJ Hero Renegade Edition — $199.99

Tony Hawk: Ride — $119.99

Modern Warfare 2 Prestige Edition — $149.99

From a business perspective, it’s easy to see why they’ve taken a shining to these accessory-laden packages as of late.  Thanks to the relative low cost of accessories on the manufacturing end, net profit widens significantly for those games bundled with cheap plastic.  To wit – was the guitar included with Guitar Hero III of such a high quality as to merit a $50 jump in suggested retail price?  In a word, no.

Ironically, as development costs explode for studios, there’s even less tangible reason for consumers these days to feel obligated to pay more, as each game is now pressed on a DVD costing pennies – a stark contrast to the exponentially more expensive cartridge format of the 80’s and 90’s.  Though Kotick seems to have been acutely aware of this truth all along, thus opting to use these gaudy accessories as his conduit to higher retail prices.

But the days look to be numbered for Kotick’s seditious strategy.  With so many big-budget, big-risk packages coming out in the next four months, Kotick and co. shouldn’t be surprised if they have to come hat-in-hand to investors to explain that their company suffered such a sharp drop-off in sales.  Call of Duty can only take you so far.

NOTE: All prices are courtesy of IGN.com (original MSRP’s) and Amazon.com (future MSRP’s as of 08/07/2009) and are listed for the Xbox 360, except for the original Guitar Hero, which was exclusively a PlayStation 2 release.

Images Courtesy of Forbes and Wikipedia