GameSpot spoke with Allison at length regarding the pricing.

GameSpot: How do retailers react to a price reduction like this?

Steve Allison: It depends on if they expect it will help them move units. In the case of NARC, all our retailers so far love it.

GS: What's the typical retailer reaction been?

SA: The first question is: Why is the software going to be a disaster? And if your answer doesn't resonate with them, they call you to the carpet on it for sure.

GS: Did they proffer a thumbs-up or -down?

SA: After we talked EB and GameStop through it, they were pretty stoked. They think it's going to really amp up their sell-through.

GS: Your goal is to …

SA: We’re going to blow this out. We're doing a soundtrack CD with some of our retailers, and these guys are going to help us blow it out.

GS: Is the pricing decision based only on the specialty retailer environment?

SA: It's not just an EB sort of game. It's also a game that can move at Wal-Mart, and in the case of a game like this, they really like it, especially when they understand we're trying to get the attention of people who like crime games.

GS: What's putting pressure on prices these days? Saturated genres, crowded shelf space, or is it something else?

SA: Despite what many other game executives will probably tell you, there is absolutely downward pressure on pricing right now. This Christmas, the battle between EA and Sega Sports shows that [to be the case] in the sports segment, but you can look at pricing history of all recent games: When they start at $49, they take a hit faster than they used to in the last couple of years. NARC was originally planned to be a $49 game, but the world has changed a lot.

GS: How does the consumer factor into the equation?

SA: We're definitely part of the cycle where price is starting to matter, because we're getting another wave of customers to the table, and those customers are the ones who are price-sensitive, or more mass-market. In some cases, you can get a big win when you come out with the right price, but if you come out with the wrong price, one that's too high, you could kill yourself.

GS: Does retail pricing affect your R&D allocation? Are you going to look at this move with NARC and say, “OK, we're going out at a low price. Let's pull back on R&D in the next quarter or two”?

SA: We can’t. We really can't. This price was a big debate in the company, and after talking to our retailers and looking at this Christmas, the information from our retailers on pricing and where things are headed--and how it would affect our orders and our partnerships and presell programs, and retail programs when the title ships--we made a decision based on all that.

GS: What did Christmas tell you?

SA: This Christmas was a Christmas where the big titles could hold that price, but the titles that weren’t big, that shipped in that quarter of blockbusters, got absolutely destroyed. I mean, titles got wiped off.

GS: Wall Street doesn't always react favorably to lower retail prices, so how do you expect analysts to react to this particular pricing announcement?

SA: I have no idea how they're going to react. I think they'll react depending on who they are and what their position in Midway is.

GS: Overall, your goals are what with this title?

SA: I want to move a good amount of units and see it succeed...and then have a chance to talk about NARC II.

GS: Thanks, Steve.

For the most recent coverage of the game, read the preview of NARC published earlier today.

In addition to today's pricing news, Midway confirmed the game's release date: March 26.

By Curt Feldman, GameSpot