*Disclaimer: It is an intentional writing choice to not write out the numbers in order to provide greater clarity.
Video games are often perceived to be quite an expensive hobby. This can be contributed to the high initial cost of gaming, which often involves the purchase of hardware, software, and accessories. It also does not help that a plethora of game developers exist within today’s gaming landscape, producing a wide range of entertainment of various genres and experiences, that it is nearly impossible to play every game that one so desires.
It must also be noted that the cost of developing video games has seen a significant increase over the past two decades. The newest iterations of video game consoles are capable of producing an output of graphical fidelity and scope unseen in past years. It’s hard to imagine that a retro side-scrolling platformer like Super Mario Bros. would cost roughly the same amount for something produced in the modern era akin to God of War, and rightfully so.
As a result of the circumstances, it has been proposed by certain figures within the gaming industry that games, notably triple-A titles, bear a price increase from the industry standard of $60 in order to offset the cost of development. On the surface, this appears to be a legitimate proposal. There are games existing today that certainly burden a much heavier price tag or a greater value proposition than its competitors. Yet despite the notion, I strongly affirm that given the latest string of events within the gaming industry as a whole, marking up the base price of games cannot go without proper justification. Additionally, the largely secretive nature of the gaming industry from a developer perspective to a business perspective provides no grounds for consumers to witness imminent price increases. Most importantly I believe the sentiment maintains a dangerous precedent for game pricing into the future, that if proceeded unchecked will be detrimental to the reputation of gaming and the disinterest of consumers.
This piece will focus on tackling the various arguments proposed in favor of general price increases in video games before proceeding to assert alternative solutions to the predicament alongside other factors requiring ample consideration.
Before fully proceeding into the core tenets of the piece, however, I want to clarify who I am referring to when I say that “certain figures within the gaming industry” are advocating for price increases. While certainly not the exclusive proponents, it is safe to note that gaming journalists tend to be the individuals that contend this line of thought most frequently, although I admittedly prefer to reference some as gaming enthusiasts rather than gaming journalists based on their work. They often point to the shared impact of inflation and development costs as the primary justification, which will be discussed with greater depth briefly. Unfortunately however, I would implore one to look to other sources as well to develop relevant knowledge on the matter, as some gaming journalists could be considered amongst the least credible spokespeople in this situation.
This is not specifically a jab at the entirety of gaming journalism. Rather, it merely comes down to the entrenchment within the gaming industry itself that many of these individuals are explicitly tied to. A grand majority of the gaming outlets like IGN and Gamespot are mostly known for game coverage, and most importantly their game reviews. For those unaware, a handful of gaming outlets are typically sent early copies of video games tied under an embargo for the purpose of review. Unless there are circumstances unbeknownst to the average person, video games that fit this criteria are distributed for free. Depending on the prevalence of video games received by gaming outlets that fit this criteria, there could exist a severe conflict of interest between the outlet who is spouting certain rhetoric and the consumer who is receiving and reciprocating said information.
The dissonance is clear: hearing someone as a gaming journalist tell you that the price of games requires an increase when they themselves are not always financially bound to the burden of playing video games lacks impact. In fact, it is quite simple to state this line of thought knowing it will not necessarily carry great consequence. Instead, people with actual knowledge of a game’s budgeting and development process remain more qualified to disclose relevant details, and they certainly do exist. Despite this though, information is scarce. If no one is willing to fully and officially cement proper justification for increasing the price of video games, I am only left to dissect the arguments that are present right now.
With that out of the way, I proceed with the first argument: rising inflation rates has demonstrably made games much cheaper in the modern gaming market relative to past years. Out of the various arguments that I have seen in favor of increases in game pricing, it appears to be a logical conclusion. The median price for games could range anywhere between $40-$50, there were multiple exceptions such as Street Fighter II and Chrono Trigger that could retail upwards of $70. Calculating the value of $70 from 1992 to 2018 results in an astounding $125. Considering that the biggest retail games today cost roughly $60 on average excluding downloadable content, the cost-to-value clearly tilts away from the older console generations. We also live in a society where the cost of other industries are experiencing higher expenses: (healthcare, technology, groceries, energy), and gaming appears to be stagnating in comparison. From the look of the scenario, it appears that gamers today should be quite fortunate that their purchases of video games carry more value than they ever did before.
But are we asking ourselves the right questions? Sure, game prices have remained consistent over the past couple decades, but that does not mean that we cannot look at the previous repertoire of video games that were released on previous consoles with little scrutiny. For those that purchased Street Fighter II when it released back in 1992, I want you to ask yourself this: looking back at the value Street Fighter II provided, how much do you believe the game should be worth? I only pose the inquiry for two reasons. The simple reason is because it is quite likely that most people would say the game could have been charged less to match its true value. Yet this brings up another interesting dilemma: it remains possible the games were overvalued throughout the 1980s and 1990s, with game pricing today reflecting a more accurate correction for a title’s worth. I don’t believe it is necessary to point out that Street Fighter II is nowhere near worth $125. Because of this, I decided to perform the opposite calculation: How much is $70 of today’s money worth in 1992? It turns out that it amounts to $39.11, which seems to be a much more respectable price point for the game that Street Fighter II is in retrospect.
Obviously, the people of generations prior lacked the benefit of hindsight to fully grasp the evolutions that the gaming industry would eventually take. Regardless, it stands to scrutinize why video games could be so expensive at the time. Perhaps one can chalk it up to higher manufacturing costs or strenuous development cycles with comparatively smaller teams, or even the extremely small install base. While these remain crucial factors to the economic state of gaming (especially the third), I want to play devil’s advocate and assert one more reason: people chose to purchase video games for their novelty. At the time, gaming was an unorthodox medium not adopted by the mainstream on immediate arrival. It provided a new degree of interactivity and a unique experience unmatched in film or television. The fact that someone could navigate an Italian plumber within a two-dimensional space stomping on mushrooms and saving princesses, control a super fighting robot that shot pellets to acquire new powers, or even blast through the stage with a blue anthropomorphic hedgehog, was nothing short of mind-blowing.
Unfortunately, that charm has slowly drifted away with the passing of time, not necessarily because the quality of these games has diminished. Moreso, they simply aren’t the revolutionaries of video games they were once championed to be. The average consumer is not purchasing Super Mario Odyssey because they can navigate an Italian plumber within a three-dimensional space stomping on mushrooms and saving princesses (that was Super Mario 64); it is typically because they want the Mario experience or interested in the twist to the formula the cap-throwing and possession mechanics provide. Additionally, Mario has been around for over thirty years; this has easily given rise to new iterations of both the 2D and 3D platformer, so the market is exponentially more saturated and competitive than ever before with quality outings. This creates the dilemma for someone’s time and money, immediately erasing the premium markup of video games that cannot hold up to the same quality.
I go on such a tangent to cement the nail in the coffin: games like Super Mario Bros. and its sequels were truly unique at the time, with a metaphorical monopoly on the two-dimensional platformer that went unmatched commercially. This extends to large portions of the catalogs of older game consoles as well: they could charge more because they had something special on their hands. With this speculation in mind, could it not be assumed that the price of games has leveled out with time? For modern context, consider the intense abundance of open-world or cinematic video games released amongst the past decade. Game homogenization certainly exists as a widespread issue; titles are becoming fundamentally similar on certain fronts that arise significant concern, whether it be the infamous “walk-and-talk” sections or the towers meant to display collectibles and open up areas of the world. In many regards, novelty is slowly becoming a relic of the past without the influx of truly creative ventures at the triple-A front to warrant greater price tags.
Moving onward from my comments on the significance of inflation, I want to underscore once more that it remains a valid concern within the discourse of game pricing. There certainly are titles that suffer as a result of undervaluation. While a general success, I remain baffled that a robust and gorgeous title like Hollow Knight is only $15, even though it could easily be sold for double, shackled by its perception as an “indie” title.
There are certainly improvements that must be made, but it stands to reason that pointing to inflation alone cannot provide the full backing for increasing game prices, with more complications to take into account.
Then there comes the next argument: development costs are on the rise and require appropriate price increases to remain afloat. Without a doubt this is categorically true on all fronts. The current repertoire of consoles available to consumers are capable of astonishing graphical and technical feats; a quick glimpse of Horizon Zero Dawn from Guerrilla Games should tell all (and a playthrough shall bring great joy).
And in addition to the costs of development, this simply cannot account for the various expenditures dedicated to marketing needed to promote the game accordingly. I can only fathom how much it costs on average for studios of various tiers to effectively produce and market games.
That feeling in itself is the big problem though: I seriously cannot fathom its actual cost! Unless the game is an anomaly like Grand Theft Auto V or Destiny, or a Kickstarter title with public benchmarks for funding, which in the latter case may not be fully represented given future unpredicted costs, most game developers and publishers fail to disclose the expenses burdened with game development. And yet we cannot always use Grand Theft Auto V as the industry standard because it was predicted to become a huge success, hence the allowance for larger funding. It also may or may not have sold eighty-five million copies…
As a result, it baffles me that someone can wave their finger at game development as a contributing factor to increasing the price of games when the majority of us lack a true understanding of the matter. The closest article to uncovering more information originates from Kotaku news editor Jason Schreier in his piece titled “Why Video Games Cost So Much To Make”. The link to the article is embedded here for further reading, but nevertheless I will provide a brief summary:
According to multiple sources that Schreier consulted within the game development space to better understand associated costs, the general consensus was that a solid benchmark to rely on was “$10,000 per person per month”, encompassing factors such as salary, insurance, and equipment. Noted was that specific numbers were difficult to uncover at larger game companies due to the massive degree of secrecy. With the information, Schreier performs calculations for the different tiers of studios with estimated team sizes and development length.
Singling out his calculation for what he considers a “massive publisher”, the estimated cost was approximately $144 million. This assumed a three-year development cycle with a team of 400 striving to “hit the graphical fidelity” expected.
When I first initially read this number, I was admittedly shocked at the revelation, especially if this was a baseline. These numbers certainly vary from the figure posed depending on various circumstances, but astounding nevertheless. And I want to note that I greatly appreciate the information presented here that serves to educate readers on the big picture of game development.
Yet it still remains too vague to grasp the extent of development costs, and certainly lacks the punch to affirm that games feature a pressing need to be more expensive. Many desire quantitative factors such as a breakdown of development costs as well as the revenue distribution of sold games on the digital and physical marketplaces. How much do these games cost to develop on a case-by-case basis? Are most games capable of breaking even at the original selling price? Does digital distribution truly provide significant financial advantages to physical distribution?
With the information currently available to the public, we can often assume but not conclude. It’s a major shame because with more answers and more transparency, the skepticism I hold for increases in game pricing could be diminished. The frustrating part remains that there appears to be no tangible reason for the confidentiality. Drawing comparisons, companies in the film industry provide the courtesy of releasing general numbers on the production budget of most movies without fail in order to provide a baseline for determining box office success.
So why can’t game companies do the same? If there is something I remain unaware of that compromises the ability for a game company to divulge such information, I seriously hope that it will come to light in the near future.
Are We Already Paying More?
Earlier on, I passively mentioned that most triple-A video games retailed for approximately $60……at its most basic state. A plethora of the hottest releases on the market come partnered with downloadable content or microtransactions that provide hidden costs not recognized on the surface. For the purpose of this video, I would rather not place much focus on the debate around gaming monetization, but I must mention that not all methods of monetization are created equal. Take Assassin’s Creed Odyssey for example, a widely acclaimed title within the titular franchise marred by incessant microtransactions across most corners, including a $10 fee to provide an experience boost. Depending on who you talk to, it will ultimately bother some and not others, requiring further nuanced discourse on the matter.
But there remains another point that presses for greater attention: the “special editions”.
Above is a chart that displays the perks associated with the multiple editions of Assassin’s Creed Odyssey available for purchase. While I utilized a chart from Wikipedia for the sake of clarity, an official comparison chart can be found on Ubisoft’s official website. And either way….. it’s almost nauseating. Set aside that it’s blatantly excessive and notice how content is spliced up amongst various editions to arise confusion, likely to nudge potential consumers to purchasing the “Ultimate” edition of the game just to guarantee they receive everything, which costs an astounding $120 at launch. And if we remain candid, the content received in subsequent editions could not ever hope to justify its prices.
Major companies that develop games akin to Assassin’s Creed Odyssey undoubtedly compromise their integrity with such tactics. If there was confidence the game was worth greater than $60, it would make sense to adjust it accordingly to fit those expectations, even amongst the risk that consumers will fail to come through with their wallets. Even the use of expansion passes in the cases of Spider-Man and Xenoblade Chronicles 2 can provide genuine value atop a game that already provided a fantastic experience in the base game. Yet it remains an unsubstantiated risk, given that no gaming company has been bold to cross the $60 threshold without an expansion pass or downloadable content. This is tricky for two reasons: consumers will now evaluate the worth of the season pass apart from the base game to determine if a purchase will bring good value, and it could be argued that the use of downloadable content to generate extra revenue is more effective than a price markup. I will not claim to have insider knowledge on revenue distribution for digital content, but I can only assume that the developer and publisher receive a greater portion of the pie than usual because it lacks the need of physical costs to manufacture packaging materials. I would not be surprised if greater revenue was earned by the publisher if the consumer chose to purchase downloadable content from a digital front after purchasing the base game, than choosing to purchase a “special edition” that bundles the cost of such content within a retail space.
There also comes the other concerns that some content is “walled off” behind these practices, but I don’t find it appropriate to fly off a tangence here. Either way, just as it is universally true that games cost more, it is universally true that most triple-A games are becoming more expensive through atypical means. So as a result, I want to fairly pose another question: would an increase to the base price of games incentivize companies to stop using expansions and downloadable content as hooks? Unfortunately, that answer for the largest game companies would likely be a resounding no. It was reported that as a result of incorporating more games-as-service models within its titular releases, gaming companies Electronic Arts and Activision grew in value by nearly $79 billion since 2012. Based on the information, it would be shortsighted to believe that increasing a game from $60 to $65 or $70 or $80 would quell them for good. The optimal solution then becomes to not purchase a game outright, while ensuring that its stranglers do not indulge in its extra costs, but government regulation could also swiftly quell the issue. To make clear, I personally do not endorse the use of government regulation within video games, as it could open floodgates that severely compromise the creative liberty and freedom afforded to games. Game prices could subsequently increase as a reactionary response to regulation in the cases of Electronic Arts and Activision, which in my humble opinion is even worse because franchises like Call of Duty and Madden NFL fail to rationalize the need to charge $60 year-after-year for annual installments with minimal changes or compromises and infinite potential for monetization.
Flexible Game Pricing
Throughout this post, I have served as a bringer of problems rather than solutions, and therefore it remains imperative that an alternative solution be posed to serve a counterbalance. And I believe it remains much simpler than some would have you believe: flexible game pricing. For the longest time, price benchmarks have been assigned to video games depending on their status, but especially as a triple-A developer. If you attempted to sell Uncharted 4: A Thief’s End for $40 at launch, many assume a lower value proposition. But if you sold a title like Shovel Knight at that price point? You can bet it would arise questions.
Many people in the video game industry hold this mindset in one way or another; I have certainly been guilty of it myself. Over time, however, I came to realize that perhaps this thinking was too stringent, that it was time to instill change into the gaming industry to the satisfaction and disarray of consumers across the board. Looking at the most objective parameters, Red Dead Redemption 2 is not comparable to Fallout 76 despite both featuring initial $60 price tags for the base game. Aside from obvious gameplay differences, the former could justify an $80-$90 base price tag for its sheer amount of content, while the latter should have been a free-to-play online shooter, before the Internet collectively exposed the game as a glitch-infested disaster
Although it would be a grave disservice not to acknowledge those that price accordingly. The releases of the Crash Bandicoot: N’Sane Trilogy and the Spyro: Reignited Trilogy are remakes of older games bundled together for $40 each during their respective launches. Not to mention, most independent studios tend to price their game fairly depending on the scope of their projects. We need more of this, more thought and consideration to the financial expenditure of game pricing in relationship with the intrinsic value of finished projects.
And with triple-A publishers, perhaps they can reevaluate the priorities to craft games with greater cost-effectiveness. While I enjoy God of War in its current state and appreciate the immense detailed crammed into every inch of its world, one could assert the superfluous graphical details could have been toned down, with greater focus instead placed on refining a combat system with significant flaws, some occasionally attributed to the graphical fidelity. Such games prove that consoles are capable of feats unprecedented even years ago, but it doesn’t mean all games should strive to feature the best visual production. Games created amongst the oldest consoles remain beloved today, that alone should be suffice indication.
At the beginning, I cited the call for a general call to price increases of video games a “dangerous precedent” that prompted avoidance. It is because a solution with flexible game pricing exists that I came to that conclusion. Claiming that “video games” need to brace a price increase could merely increase the baseline rather than effect genuine change.
Say some triple-A games now cost $70 as a new base price. Now everyone initially charging $60 becomes tempted to raise their price to meet the industry standard, even if a jump dodges all logical reasoning. Do you really want to start paying $70 for Madden NFL 21 when the next generation of consoles hits just because others claimed it was necessary for the industry? Or more importantly, would Madden NFL 21 actually be worth $70, because I certainly doubt it costs anywhere near $144 million to produce a single title at the rate these games are pushed out. Instead, let’s call for game publishers to truly evaluate the worth of their game based on the experience it provides, and candidly suggest a price point that feels suitable. While it carries with itself a greater aura of subjectivity to consider, it carves the path for game developers and publishers to serve the greater interests of everyone involved.
Admittedly, I had second thoughts writing this piece because I harbored great concern that I was missing the big picture. Did I do enough research to warrant my arguments? Are my opinions founded in too much assumption? It honestly took some time before I had to take that leap of faith, to express that opinion out to the world with the assurance that it could be a learning experience.
At any rate, I want to establish once and for all that I love gaming. When I am not contemplating on the negative directions that parts of the industry take, I dive into the imaginative and engaging worlds of fantastic proportions, eager to uncover the secrets hidden within a beautifully apocalyptic world, or compete with friends in an exhilarating arena. I only wish the best for the industry, and never under any circumstances want to suggest or encourage actions with the intention of destroying it.
Yet that sentiment is imperfect. Every day I hear stories about gaming companies with their sights completely locked on reaping the greatest profits without consideration for their consumers, or gaming studios shutting their doors down and leaving people with dangerous uncertainty about their future. Regrettably, I read and hear too many stories from people who have demonstrated hostility and intolerance while reporting on the gaming industry, lacking understanding of other perspectives on various matters.
In such the massive industry that is gaming today, the lack of valuable information on game development and the uncertainty of the industry’s sustainability is jarring. I sincerely hope my arguments convinced some of you that this assertion is a pressing matter that needs to be shattered. Game pricing is not the greatest concern of mine: I care more about the developers that work for years to create memorable experiences, and I also care more about the games themselves, but unfortunately they all suffer from the burdens of secrecy. And it is due to this secrecy that I cannot fully vest my trust within the rhetoric and workings of the gaming industry, let alone that games need to “increase in price”.