Why are Video Games So Expensive?

[Marine Mike]

http://news.yahoo.com/s/newsarama/wh...expensive#full

With the news of higher losses at every major publisher this year, many fans wondered if the cost of video games today is too prohibitive at a most often price of $60 for current gen systems. Playing a bit of devil's advocate, here's the breakdown.

First, there's the most obvious, and that's production cost. Many games are essentially small movies now. Some, like Metal Gear Solid 4 included enough cutscenes (non-played movie sequences) to fill multiple feature length films, and most story driven games have at least some cutscenes. In addition, many big names from Hollywood have gotten into the game voiceover business. Even a lesser profile game like The Legend of Spyro: Dawn of the Dragon featured a cast including Christina Ricci, Elija Wood, Gary Oldman, and voiceover artist extraordinaire Mark Hamill, amongst other known "names."

Some games are still coming out with 5-7 hours of gameplay, but the average has been on the rise. With the raucous success of role playing games like Fallout 3 and Fable 2 this season alone, gamers are making it perfectly clear that they don't mind putting 40, 50, or even 100 hours into a game, and that's just in a single player campaign. The longer a game, the more variation it has, the higher the production cost goes. With major productions, the total number of developers, designers, concept artists, writers, producers, and project managers, often sits in the 80-90 range, if not higher, according to Red Fly Studio Programmer and Developer James Clarendon. In addition, there are the aforementioned voice actors, plus quality control testers and focus groups. In Santa Monica California, home to several development studios, a programmer makes between $51,000 and $65,000 a year, according to Salary.com.

All this adds up to a production cost that has considerably grown in the past generation, and more so the past two generations of game consoles. DVD printing, packaging, and manuals all go into the production cost, as well. The BBC predicted in 2005 that games' production costs would start meeting and exceeding the $20 million dollar mark. According to Reuters, some games have hit as high as $50 million to make. Former Sony PlayStation Europe CEO Chris Deering claimed earlier this year that only 3 out of 10 games earn back their development costs, and that's in a growing games market.

All this talk of production cost doesn't even cover the entire cost of making a game. Activision was spending as much as $4 million dollars on marketing a single game as far back as 2001. Joystiq.com had Mike Griffith, Activision's Publishing head, say they plan to release 70 SKUs next year (seemingly including multiple SKUs for single games, i.e. a PS3, Xbox 360, PC, Wii version, etc.), and even factoring some getting more marketing than others, that's a lot of money. Retailers need a cut, as well, which is usually about 15-25% of the in store price. For the retailers to sell them, the games have to be distributed, and that adds to the price as well.

This is a very long-winded way of saying that prices of video games are not likely to fall any time soon. Many games are starting to use in-game advertising to recoup some costs. Proponents say these ads make the games more realistic, as they're using real company and product names, while decriers say it is obtrusive to the gaming experience. Regardless, it does help to keep costs where they are, at least for the time being.

For some historical perspective, the average cost of games in 1982 was $35, and SNES and Sega Genesis games sold anywhere from $40-$60 in 1991. Adjusting for inflation, those costs are $74 and $60-$90, respectively. Cartridges did cost more than DVDs to produce, but overall, game prices have essentially been frozen, not even adjusting at inflation rate for nearly two decades, even with the rise in production cost and quality.

So, is $60 too much to pay for a video game? Well, the answer ultimately lies with each gamer and each game, entirely objectively. Are companies justified economically in that price point? The answer appears to be "yes." Hopefully, companies don't decide to meet inflation with the next generation of consoles.


What do YOU think? Knowing all this, is $60 still too much for a video game? Would you rather see lower production quality and lower prices? Sound off below!

[ADRiiAN`]

That's why people wait for reviews.
I don't mind paying $60.

As long as the game is very good.

[Mr. Al]

Actually, some of the prices are going up.

I had to pay 64.99 for Naruto: Ultimate Ninja: Storm today.

There aren't just a handful of people that make a video game. Look on the back of your instruction manual, there are tons of people that part of the development team that brings you these games to the shelf.

[stockstar1138]

games offer way more value than 99% of entertainmnet out there.

i think the people who complain are the "casual" gamers who might only play a game for a few hours and put it down.

[Mr. J]

Originally Posted by ADRiiAN`

That's why people wait for reviews.
I don't mind paying $60.

As long as the game is very good.

+1

[LynxFX]

Most games are just too short to justify $60, especially if they have little to no replay value. I bought over 50 xbox games during its life, which at the time didn't seem that bad spread out over 4 years, but then I did the math. It really sunk in when I realized I didn't play 90% of those games more than once through.

Now I'm a renter with maybe 1 or 2 games purchased per year and that is at a massive discount. As long a the renting model remains, and the next gen doesn't head towards pure download only, I'm content with the amount of money I spend on gaming. I do like the PSN trend of addictive cheap downloadable games. I've purchased a dozen of those and will gladly support those small studios.

[Sussudio]

i dont mind paying 60 so long as i know i'm getting a good game that will last.

what i dont get are the $70-$100 collectors editions which are the exact same game in different cases and with an additional comic book or trading cards or behind the scenes documentary. unless i'm actually getting something extra in the game itself (more levels, characters, etc) i'd rather save $20+ and get the standard edition. but to each his own.

[jamclaur]

The games are expensive because you buy them day 1. Wait a few weeks and see if the price isn't a better number.

[ADRiiAN`]

Originally Posted by Mr. Al

Actually, some of the prices are going up.

I had to pay 64.99 for Naruto: Ultimate Ninja: Storm today.

There aren't just a handful of people that make a video game. Look on the back of your instruction manual, there are tons of people that part of the development team that brings you these games to the shelf.

It's because we're in Canada.

Our dollar is disgusting and so I've been seeing places like BB jack up games $5.
EB Games is still $60 though.

[MAPdead]

You can catch some games on sale a month after its been out or buy it used or ebay I got Silent Hill: Homecoming for PS3 on Ebay for 30 bucks just a week ago. But if I KNOW I am going to like the game I will pick it up and pay the 60 bucks.

[zombieking]

Most AAA titles have small movie-like budgets already, and sometimes 100-200 developers working on them. Those people have to eat too. $60 is a fair price for a must have game. And a game's success when deserved always means we get to play a hot sequel a year or so later.

[metsfan1545d]

its price gouging the disc costs about 15 cents to make.

thats y i buy maybe 2-3 games a yr and only when there a incrdible deal except madden which is a must have every yr

[Moefiz]

I usually wait to pick up a game.I don't mind spending 60.00 on a game but I usually play one game at a time and I usually don't put alot of hrs in daily.
So by the time I am finish I can usually find a game that I would like as drop in price.

[oldmike]

Originally Posted by metsfan1545d

its price gouging the disc costs about 15 cents to make.

thats y i buy maybe 2-3 games a yr and only when there a incrdible deal except madden which is a must have every yr

Blu-rays cost 15 cents???? umm were you get that info
and madden is the supper rip off i get it ever other year at best

i am a gamer junky i got 4 games last week and 3 blu-rays

[toef]

I'm wondering when another studio will come out and do what 2k did a few years ago with their sports games.

For those who don't remember, they were releasing all the new sports games for something ridiculously cheap, like $19.99. Not a bad deal considering a lot of people think the 2k football series became better than Madden, in its final years. That year was probably the first year in history that I bought the new NHL, NFL, and MLB games...all of which were the 2k versions.

In the final days before the PS2 came out, there was a SOCOM ripoff that was released for PS1, and only cost $5.99. Sure, it wasn't exactly SOCOM (it had no online play) but it was probably worth the $6.

One potential problem is that people might be scared away by the price. A lot of people associate price with quality, and if they see a game being released for $29, when every other game sells for $59, they might think it turned out very badly, and the company dropped the price to try to sucker as many people in as possible.

Going off on a tangent... The one game that seems to stand out the most, from the next-gen games, is Burnout: Paradise. Criterion seems to be trying something new, by offering all these free upgrades, and dropping the price of the game, when they could easily have packed it up, and moved on to something else. As much as I love CoD4, it's frustrating to think Infinity Ward can't be bothered to even patch in dualshock, let alone trophies, when Criterion has done both, and more.

[jeabombers]

Maybe you people could quit whining and grow up already. Apparently most of are too young to have been alive when the NES was around. ALL of their games were $50-$60. Would you pay $60 for that NOW? NO. But nobody complained back then. Just think. With inflation and the vast increase in production time/values, games should really cost $120. That's THE SINGLE BIGGEST counterpoint to stating that games are too "expensive". Maybe instead of growing up, you guys should just go back to asking your parents to buy your games for you so that YOU don't have to worry about the "terribly expensive cost." Oh, I forgot. The economy is "crashing." PFFFFT. Maybe anyone that believes that that we're still higher up than we were 20 years ago, by a large margin.............

[andyman1970]

Originally Posted by stockstar1138

games offer way more value than 99% of entertainmnet out there.

i think the people who complain are the "casual" gamers who might only play a game for a few hours and put it down.

You have a point. I am or was a casual gamer and I just couldn't see paying $60.00 for a game that I may or may not finish. So, I sold my XBOX 360 and just use my PS3 as a Blu-Ray player. I would much rather have the movies and I can buy 2 or 3 BD's for the price of a game. Now, I have a friend who is a hard core gamer and spends most of his time on a 360 and I can see why he pays the money for the games. Because he gets his moneys worth by playing each game 2 or 3 times.

[toef]

Originally Posted by jeabombers

Maybe you people could quit whining and grow up already. Apparently most of are too young to have been alive when the NES was around. ALL of their games were $50-$60. Would you pay $60 for that NOW? NO. But nobody complained back then. Just think. With inflation and the vast increase in production time/values, games should really cost $120. That's THE SINGLE BIGGEST counterpoint to stating that games are too "expensive". Maybe instead of growing up, you guys should just go back to asking your parents to buy your games for you so that YOU don't have to worry about the "terribly expensive cost." Oh, I forgot. The economy is "crashing." PFFFFT. Maybe anyone that believes that that we're still higher up than we were 20 years ago, by a large margin.............

I'm not going to respond to this with a lengthy post, but you accuse people of being childish, and then launch a childish attack on those people.

I'll throw out some stats, and you can draw your own conclusions:

Global population in 1985: Just under 5 billion.
Global population today: Just under 7 billion (will break 7B sometime in 2009)

US population in 1985: 238 million
US population in 2008: 301 million

Maybe games HAD to cost a lot a long time ago, because the technology was new, and wasn't adopted by many people. So each game sold on a shelf had a larger burden of the development cost to carry.

I don't find it surprising then, that any increases in production costs seem to be cancelled out by the larger base of people to sell games to (in terms of a growth in total population, and the sub-population of 'gamers'). So your conclusion that games should cost $120 is absurd. If games SHOULD cost that much, they WOULD. So much for that SINGLE BIGGEST COUNTERPOINT.

[Marquoz]

I only complain about the cost when the game does not justify the cost of it. Final Fantasy where I can put in literally hundreds of hours on the game is well worth the cost. Heavenly Sword where I only played maybe 9 hours wasn't really worth the cost, it was entirely too short. If the games are becoming shorter because the cut scenes are too expensive, then remove some of the cut scenes and make the game longer. I don't want a 20 hour game that's 15 hours of cutscene. I want to be able to enjoy the game, and feel that it was a good purchase.

Replay value also is an added vaule incentive to my purchases. Most RPGs that I play, I play through the first time and achieve maybe 70% of the game with all the extra hidden weapons, quests, etc. It's fun going back later and picking up the rest of them, or even re-starting and exploring more. I'm not about to restart a game because I missed one or two things though, so add more for people to do.

[Pepelutivruski4]

last time i have paid retail price for a video game was in the late 90's for Zelda:Ocarina of Time.

i almost bought GTA4, but i waited, and i found it for $40 at radioshack, and boy am i glad i didn't pay $60 for that game.

i even got Valkyria Chronicles w/ a coupon at EB Games and it even came w/ a limited edition art book!! score.