Why games are so expensive

[GasBandit]

Next time you hear about a game publisher whining about second hand video game sales not making money for the publisher (or Developer, if he can keep a straight face), just remember that Nintendo and Activision, two of the biggest names in game publishing, colluded like all hell to artificially inflate the price of video games. Well, at least they're getting taken to task for it.

In 2009, the EU let Nintendo (slightly) off the hook when it reduced the company's fine for engaging in price-fixing during the 1990's. Well, Activision asked for a similar reduction in its fine (same case), and has been denied.

 

[SpecialKO]

...
I think something must be wrong with Gawker's AJAX implementation for their new format, because clicking that link is taking me to a completely different article on Kotaku's site.

 

[GasBandit]

Well, fortunately I quoted the entirety of the article.

 

[SpecialKO]

Well, fortunately I quoted the entirety of the article.

Heh.

 

[Necronic]

See, I dunno. I still don't think games are overly expensive. In terms of entertainment provided per dollar a game has a vastly superior pricepoint than a movie. Music may be in the same area, but it depends on what kind of music listener you are.

 

[@Li3n]

See, I dunno. I still don't think games are overly expensive. In terms of entertainment provided per dollar a game has a vastly superior pricepoint than a movie. Music may be in the same area, but it depends on what kind of music listener you are.

Yeah, i mean what's a little price fixing between friends...

 

[Necronic]

Well, if there's price fixing that is in and of itself bad. But I don't think games are too expensive, I think their price point is pretty on the money for what you get from them. Maybe the thread should be called "Why games aren't underpriced."

Edit: and I mean FFS, it is a free market economy outside of consoles. If someone wanted/was able to make and sell a game for less than the 40-60$ price point that is standard then they could. If someone put out a quality game at that price people would be all over it. But they don't. The only games that get sold below 40$ on release are either sub par B-Studio games or mini-games/apps that don't really require the level of development or give the same level of entertainment as a full commercial release could.

If people are arguing that (outside of consoles) there is any price fixing then they are just crazy. There are too many studios involved, and there is far too low a requirement for entry into the market. Its not like manufacturing an automobile or setting up an oil refinery. Its not nearly as difficult to set up a game design studio, therefore if the product was over priced new competitors could enter the market and drive the price point down.

 

[GasBandit]

Well, if there's price fixing that is in and of itself bad. But I don't think games are too expensive, I think their price point is pretty on the money for what you get from them. Maybe the thread should be called "Why games aren't underpriced."

Edit: and I mean FFS, it is a free market economy outside of consoles. If someone wanted/was able to make and sell a game for less than the 40-60$ price point that is standard then they could. If someone put out a quality game at that price people would be all over it. But they don't. The only games that get sold below 40$ on release are either sub par B-Studio games or mini-games/apps that don't really require the level of development or give the same level of entertainment as a full commercial release could.

If people are arguing that (outside of consoles) there is any price fixing then they are just crazy. There are too many studios involved, and there is far too low a requirement for entry into the market. Its not like manufacturing an automobile or setting up an oil refinery. Its not nearly as difficult to set up a game design studio, therefore if the product was over priced new competitors could enter the market and drive the price point down.

It's actually pretty difficult to set up a AAA, multimillion dollar studio. No investment capital types want to throw millions at something whose defining characteristic is "We want to violate the de facto price point by charging $20 instead of $40." Then studios rationalize that price point by saying "hey development costs." But as such indie games as Super Meat Boy and Minecraft show, it doesn't HAVE to.

It IS supposed to be a free market, but even price fixing aside - it's still a market dominated by ROI and shortsighted decisions based on the malformed preconceptions of cranky investors.

And those investors demand the price be the highest the market will bear. And because the primary demographic of the video game consumer is males 15-35 with lots of discretionary income (as Brent from PVP said, "I'm a young single male... EVERY day is christmas. If I want it, I buy it."), the prices do tend to be inflated over actual value.

A properly adjusting free market would force the price to be as slim in margin as possible over production and manufacturing costs... which most often, is not the case. Because, when you come down to brass tacks, they're still a luxury item.

 

[Jay]

My only issue are DLCs that are available to be downloaded/bought the DAY the game comes out. To me, that's fucken bullshit.

The content was available but they decided to remove it from the game to get more revenue. I have no issue with DLCs being provided a month or months after the game comes out or even a year later, if I like the game I'd gladly pay it. Available DLC the say the game is in stores? Fuck off.

 

[figmentPez]

See, I dunno. I still don't think games are overly expensive. In terms of entertainment provided per dollar a game has a vastly superior pricepoint than a movie. Music may be in the same area, but it depends on what kind of music listener you are.

I don't look at entertainment on a per hour basis. It took me more hours to finish Far Cry 2 than it did to finish Sam & Max: The Devil's Playhouse, but I liked Sam & Max better, and gladly paid more for it than I did for FC2.

 

[GasBandit]

My only issue are DLCs that are available to be downloaded/bought the DAY the game comes out. To me, that's fucken bullshit.

The content was available but they decided to remove it from the game to get more revenue. I have no issue with DLCs being provided a month or months after the game comes out or even a year later, if I like the game I'd gladly pay it. Available DLC the say the game is in stores? Fuck off.

I, too, call shennanigans at concurrently developed DLC. That should have been included in the game.

Oh, and *fuckin'.

 

[SpecialKO]

I am okay with pre-order/launch bonuses being available *later* for purchase, but I agree with you folks about selling more stuff out of the box instead of including it.

Of course, if people didn't put up with it and buy it anyway...

 

[@Li3n]

Edit: and I mean FFS, it is a free market economy outside of consoles. If someone wanted/was able to make and sell a game for less than the 40-60$ price point that is standard then they could. If someone put out a quality game at that price people would be all over it. But they don't. The only games that get sold below 40$ on release are either sub par B-Studio games or mini-games/apps that don't really require the level of development or give the same level of entertainment as a full commercial release could.

Eh... the fact that they're slowly moving to a 60$ price point base solely on how long CoD MW2 was sold at that price ("they're more expensive to make" has been said for years already, if it was that it wouldn't have taken this long) tells me that it's more likely that the price point is what it is because demand supports it, and not because their expenses (supply).

 

[Hailey Knight]

Wii games still come out at $50.

And generally if you're willing to wait a week, brand new games will be down by 15 to 20 on Amazon.com. Assassin's Creed: Brotherhood was down to $35 not long after it came out, and I saw Dead Space 2 for $40 a couple days ago. Not used. Brand new.

 

[@Li3n]

Yup, the 50$ things is usually for the first few weeks, when most of the impulse buys happen... and a lot of the time the bulk of the sales too...

 

[figmentPez]

It doesn't seem to me that the price fixing raised the price of all games, I think it limited the variety of price points back in the day. The game industry is finally being forced to accept that games can be released at different prices based on a number of factors, not just if they're a major release or a "budget" title (and there weren't may of those in the SNES era. Almost all console games came out at $50+ in those days. I don't recall there being any cheaper deals, except in bargain bins for games that didn't sell.)

Even just a few years ago, before downloadable games caught on, you only saw two basic categories for new releases. You saw "real" games that were $50+ and you had "casual" games that were ~$20. There wasn't a lot of middle ground. That was largely due to the price fixing. It didn't cause a price-hike for Mario, Sonic, Street Fighter, Final Fantasy, etc, it stopped the competing games from undercutting them at $40. I think that really hurt the game industry for along time, and I'm glad to see that there's been some real headway in combating the notion that all good games come out at $50+ and anything that costs less must be crap.

 

[Jay]

The price in Canada for SNES games were more than 50$, heck, I remember saving 9 week's worth allowance at 10$ back in what 93-94? to buy AEROBIZ at like 80$+ tax.

Prices for games now aren't as high though quality/length is always a huge issue. Game back in the 90ies rarely had issue (no need for patches), console gaming is nowhere as refined back in the day and some games can be completed in a day when old RPGs would take you far more time.

 

[redthirtyone]

The price in Canada for SNES games were more than 50$, heck, I remember saving 9 week's worth allowance at 10$ back in what 93-94? to buy AEROBIZ at like 80$+ tax.

OMG thought I was the only person who EVER played that game.

I was a HUGE KOEI fan, except for the romance series. LOVED Uncharted & PTO. If they would make this stuff available on the virtual console I would actually turn the Wii on every now & then.

 

[Jay]

Romance series is amongst the best. Mostly because I enjoyed the book (biased as it is) and historical wars. Uncharted was fun, PTO a bit less but OK. What about Inindo?

 

[sixpackshaker]

Software companies seem to take their one level of pricing from Motion Picture Houses. Because out side of the 3D surcharge, films at a theater, cost you the same whether they are Sci-Fi Blockbusters, Star-Laden RomComs, or Art house pictures with a million dollar budget...

 

[redthirtyone]

Romance series is amongst the best. Mostly because I enjoyed the book (biased as it is) and historical wars. Uncharted was fun, PTO a bit less but OK. What about Inindo?

Gonna have to sayyyy... no, since i don't know what that is. But the amount of time I spent playing some dumb game about managing an airline co or as a 16th century sea merchant was unreal. I could still hum the music to PTO, Aerobiz & Uncharted Waters today. I kept meaning to find a copy of Operation Europe to play for old time's sake, but I guess i'm still holding out hope for the virtual console.

Hell, PTO has done more for my knowledge of the geography of Oceania than anything else.

 

[Jiarn]

Uncharted Waters 2 was god's gift to SNES games.

 

[Adam]

I remember paying $80 for SFII back in 1995. Calculating for inflation, that's $111 in 2009 dollars.

Games ain't expensive, the hobby itself is expensive.

 

[Frank]

My mom bought Final Fantasy 3 brand new for 100 bucks from Zellers for me for Christmas. Games now are cheap in comparison.

 

[GasBandit]

I remember paying $80 for SFII back in 1995. Calculating for inflation, that's $111 in 2009 dollars.

Games ain't expensive, the hobby itself is expensive.

My mom bought Final Fantasy 3 brand new for 100 bucks from Zellers for me for Christmas. Games now are cheap in comparison.

That's not games being expensive, that's just gamers (or their moms) having more dollars than sense which is also part of the problem.

 

[Necronic]

Another part of the problem is that the purchasing power that defines value in the industry is concentrated around people who consider graphics and voice acting the end all be all. This is partly due to console games and teenagers being such a massive market share.

The reason this matters is that if you consider graphics and voice acting "bling" as opposed to value, you see that there are many many many very high quality games that cost almost nothing. See, I can go get an amazing game and spend less than 30$ on it. I can do it daily for years on end.

This is because I am willing to look at mom and pop games (Mount and Blade), older games with an amazing mod community (JA2, and Mount and Blade again), or the vast quantity of surprisingly high quality freeware (Dwarf Fortress, Battle for Wesnoth, Dungeon Crawl Stone Soup), or the nearly unlimited quantity of last-year or older releases (Rome: Total War). No doubt, these aren't CoD MW2, but that's not the point. They give lots of replay value with a high level of entertainment for an incredibly small price.

When I hear people complaining about the high price of games it makes me think of people complaining that Masserattis and Ferrarris are too expensive, and also thinking that they are the only car you can buy. Thanks, but I'm going to go jump in my Toyota Camry or Toyota Mr2/Spider or Honda Civic or Honda S2000 or Honda Del Sol and have a fantastic car for 1/20th the price.

Now, I'll buy a MW2 from time to time, but I see it as a luxury. The only reason that people think there is a monopoly is because they are incapable of seeing the entire marketplace due to their own myopic limitations. Don't blame the industry because you have a poor definition of value. Blame yourself.

Plus, the people talking about inflation are right on the money.

 

[Chibibar]

I have to agree with Necronic. The games are expensive because of all the "bells and whistles" that goes into it. I love high level graphics as the next gamer BUT I do like an old classic type game like Warsong (SEGA). Thanks to Steam there are tons of game that I can search and even demo (some have them) before buying. The current market has change and the devs really need to look into that.

I do occasionally buy new games at 50$ and even 80$ but most of the time I usually wait until the price go down or play something else.

Replay value is also important for me

 

[@Li3n]

Wait, wait, wait... CoD MW2 is an example of high end graphics now?! Man, graphic whoring really went downhill in the last few years...

The only reason that people think there is a monopoly is because they are incapable of seeing the entire marketplace due to their own myopic limitations.

Or actually take into account sales...


At the end of the day the fact remains that the price point for one copy only determines how many units you need to sell to make back your investment before 99% of the money for that copy become profit for all involved... and CoD MW2 is still 60$ because people actually pay that much for it even now... and the companies aren't going to lower prices if they don't have to, no matter how much they could lower them and still make a good profit.