Periodically someone floats the idea of raising game prices from the ancient standard of sixty dollars. And so everyone online has to put in their two cents. The most recent discussion has been triggered by 2K Sports raising the price of the upcoming NBA 2K21 to $70, leading people to suspect that the next generation of games are going to retail more than previous ones, such as with this Polygon article. This has become the question about the next generation of consoles: Will games go up to $70 next generation? Personally, I feel that it’s a bit unlikely given that it’s just NBA 2K21 so far – the NBA games are notorious for having a lot of microtransactions, and it seems that this is another attempt to get more profit out of the series. Until we start seeing other games start to retail for higher, I’m going to treat this as an isolated thing. However, this did raise a discussion about the pricing of games in general, something that I find to be extremely interesting. On the face of it, the proposal to raise prices makes sense – inflation has continued to rise, and we are told that games are costing more to make, meaning that per unit a game makes less profit, putting game developers in a tight spot. Logically, it follows that to cover increased costs, game prices would have to rise. But in spite of everything, game prices have remained at the stagnant sixty bucks, with smaller titles retailing from thirty to forty dollars on occasion. Somehow games have managed to stay at the same standard price over several generations. What makes games special in that regard?
Well, part of it is that games have actually increased in price to keep up with rising costs (and more importantly, the need for investors to have higher profits). Sure, the base game is sixty dollars, but there are now a wide variety of systems in place to have you spend more money on a game – such as DLC, microtransactions, and the despised loot boxes. DLC is fairly straightforward, you have a base game with a certain amount of content, and then you charge 15 – 30$ for more content after the game releases – postgame stuff to do, multiplayer maps, side quests, et cetera. It’s something that’s become so standard that often games ship with the DLC already on the disk, meaning that you are essentially already paying more for a game – you just don’t know it yet. In the same vein, microtransactions and lootboxes also exist to charge you more money – though usually less than a full DLC pack, it still can add up to a decent chunk of money, especially when you can’t get the one character costume or resource you need. All of these have controversially become a critical part of how games turn a profit, and it’s become standard for one, if not all, of these techniques to be used within a game to charge more money for content. While technically, these are separate purchases, overall the price of a game has increased beyond the standard sixty.
And what about the rise in gamedev costs? As the Polygon article has points out, the cost to develop a game has risen by a fair bit – so it follows that these features have been implemented to keep pace, right? I’m a bit doubtful of that reasoning. I won’t deny that the cost per game has gone up, but I wonder if publishers actually spend as much overall as before – yes, it sounds a bit weird, but let me explain with an example. In this excellent video by gaming youtuber Super Bunnyhop, he points out after looking at Activision-Blizzard’s finances that overall the expenses they pay, including gamedev costs, have gone down from 2009 to 2016 – except for 2016 itself when they acquired mobile gaming company King to the tune of almost six billion dollars. During the same period, the profits of Activision-Blizzard soared, making them one of the largest companies in gaming. Now, let’s dig a bit deeper. By my own count, in 2009 Activision-Blizzard published 18 games – this isn’t counting ports or DLC, just actual games. In 2016, they published four. Obviously, each of those later four games are more expensive than the 18 put out in 2009 – so even if Activision-Blizzard is overall seeing a reduction in costs, they still spend more on each game. Part of this is due to game costs rising, leading to less games in development – technology is more advanced, and the practice of crunch means that you have to spend more hiring teams of devs and paying them overtime. Likewise, plenty of those 18 games in 2009 are games that simply don’t exist now, stuff like Guitar Hero, cheap tie-in games, etc. But probably the biggest reason for this decline in games being published is simply to increase profits. Budgets are focused on a few games, especially ones such as Call Of Duty and Overwatch that have lootboxes and other microtransactions that will further increase profit. Game costs have risen, but this is at the same time that Activision’s profits have grown to 6 billion dollars a year – or about 75 million copies of Call Of Duty: Modern Warfare Operator Enhanced Edition retailing for 79.99$. When you release games annually, you will see a rise in the gamedev costs just due to the amount of crunch. But at the same time, these constant releases are far better for short term profit than a more spread out release, and with lootboxes and the like factored in, its a huge return on the money that is sunk in. Game costs may be rising individually, but this is due more for the investors’ need for short-term profit. The prices we pay for games have little relation to the cost of gamedev, and are only what publishers think will bring in maximum profit.
So what is the motivation to raise prices, if the costs that publishers see are falling and these other systems of microtransactions and DLC are already in place? Well, thinking cynically, to create more profit for investors – same as every other unsavory practice the game industry does, such as crunch or lootboxes. Investors want to see immediate, high profits, and so the game industry forces games to be completed in a shorter time frame (increasing gamedev costs, by the way) and the implementation of these systems to make further money. As microtransactions and lootboxes have fallen under suspicion for manipulating people and being a loophole around gambling laws, publishers are trying other ways to get people to spend more of their cash on games in order to maintain the same levels of profits. Potentially, that will be raising prices to 70$ – it could also be an expansion of systems such as microtransactions for resources, like those crappy mobile town sim games, or to cut the costs of gamedev and try to get games to ship faster. I doubt that a price increase will catch on, however, because raising game prices is simply too risky for most publishers. America is one of the cheapest places to buy video games, and even still, at sixty dollars, it’s a pretty significant purchase for most people. For me, that’s a little under two and a half weeks worth of groceries for one game. So of course, there’s no way that I’m gonna pay even more for a new game. Publishers are pretty aware that people are only gonna pay what they’re comfortable paying, and isn’t gonna be 70 dollars for a lot of people. It’s not something that the game industry even needs to do, really – profits for these companies are soaring, and at the same time they’ve cut expenses. It’s not like these publishers are in the red, though many of the studios they publish for probably are with the decrease in gamedev budgets. The need for investors and shareholders to see these insane profits is the reason we see the gaming industry in the state it is today, where we increasingly have to shell out a hundred dollars for everything a game has, with said game made by exhausted employees suffering through crunch on a 3 year contract before they’re let go and forced to scramble for another gig. So is it really gonna be 70 dollars for a new game next generation? Maybe. But so long as video gaming is run according to profit, you can be sure that it will be something that is going to demand more of your money.
Well, that’s the end of this opinion piece. If you want to read me talk more about video games, I did a Post-Mortem on the latest Cooking Mama game/fiasco. I also just reviewed the manga Blazing Transfer Student, since I actually like to talk about more than video games. If you want to read more Story Arc, Shred just put out a great review of the movie Under The Skin, and Skeith just reviewed Battle For Bikini Bottom Rehydrated as well. Finally, as always, be sure to follow us on Twitter and join the Discord (invite is on the twitter). And I mean, if you read this far, feel free to follow and or direct criticism to me on twitter @theDiiKay
I almost forgot to do the end of the article blurb this time, lol