Why 60 Dollar Videogames Cost 60 Dollars
Since the birth of video games the cost of new copies has only gone up but it is almost a mystery as to why games have remained at $60 for more than a few years now. The cost of everything we have used from our early years as kids up until now has gone up. A bag of chips now costs $1.69 when it used to cost only one dollar about a decade ago. Time does not stop inflation but the price of video games has not changes since 2005 when the Xbox 360 was released and prices for videogames first began hitting the $60 price range. So what’s keeping the price of video games at $60?
Where does my money go?
Essentially, every company involved in the creation, publication, and distribution of these sixty dollar games needs their cut of the profit. According to GameRant, about out of those sixty dollars $27 goes to the publisher like Activision, around $15 goes to the retailer such as Amazon and GameStop, $4 goes to general costs such as distribution, and $7 goes to returning games that don’t sell and platforms like PlayStation and Xbox. Used game sales are a different story, in that case the money goes directly to the used game retailer like GameStop. This used games retailer makes its money from used game sales since they don’t make as much from the sale of new games.The cost of making video games has been on the rise, you can see this in the budgets for The Witcher series. The Witcher 1 had a five-million-dollar budget, the second Witcher had the budget of 10 million, and the third installation had a budget of 26 million. The game is beautiful and I don’t just mean its appearance is the only thing good about it, it’s also the story and mechanics of the game. It looks like they spent a good amount of time making it. The Witcher series has rightfully proven itself to be well worth the money.
A cost that is rarely addressed in the production of videogames is the addition of Digital Rights Management (DRM) protection software which keeps pirates off for at least a little while. This leads me to believe that GameRant’s pricing points for the production cost of video games is off mark. Some websites claim that around 95% of players are playing pirated games so the appeal for DRM to deter pirates for at least the initial release is more attractive. It would be insane for a new game not to consider DRMs such as Denuvo which has proven itself in the fight against pirates on multiple occasions. One example is of a hacker team called 3DM which took 9 months to crack an earlier version. They claim to have fixed the hole that allowed them to hack that in the release of Just Cause 3. Having a window before pirates get through DRM is crucial to the sales of that game. Plenty of people argue that DRM protection is dead because it can be hacked but the truth is that companies understand this it is time to sell that these companies are after, not ever lasting unhackability.
People always argue that if a game is no good it won’t sell, but what’s more important is that people see the game to begin with. It wouldn’t matter if you had a great game if nobody knew it existed. The cost of marketing video games along with the cost of production in all its senses is what pushes games to cost so much to make. For example, the Witcher’s budget sky rocketed from 10 million to 26 million which resulted in a fantastic looking game but even for looks, the big jump from 10 to 26 million wouldn’t be enough of a justification for their budget. So, it has to be the marketing or putting it in front of people’s faces so that they consider buying it over any other game. Aside from making the game appear in all types of advertising spaces was the extra things they did like free downloadable content known as DLC. The franchise could have easily offered the first DLC with a pretty price tag but they didn’t which is rare for a AAA game. Nobody wants to pay extra for things that a lot of people would say are things that should have been included in the initial game to begin with. When it comes to profit the Witcher three made over 100 million in the first two weeks in comparison to the 6 million of its previous iteration. Not every game is as big of a success as this but one can only hope their game and marketing strategy pull through.
Why do prices remain static in the face of inevitable inflation?
The secret behind the 60-dollar price tag is that we’ve become accustomed to paying that amount and if we are going to pay more then we expect more. Companies have also stuck with the base price of $60 to keep up with the competition. If one game is on sale for $80 as opposed to $60 and they’re both shooting games what do you think would sell more? The cheaper game might sell more and eventually become a better game with its new-found sales money. Besides companies having to fall in line to keep money flowing they also must put out extra content or jeopardize their standing in the industry. Games like Call of Duty are completely playable even if you don’t have the DLC. If you needed the DLC to even play your games then you might be upset that you have to cough up some more cash. An example of this is Fallout 4’s initial lack of survivor mode which a lot of people would say is the only way to play it. Some people found the hype behind the game to be nothing more than talk because to a lot of people the game wasn’t fun and challenging until survivor mode came in. Returning a game might not even be worth it if you’re disappointed with the games because then you won’t get the same amount of money that you bought it for. The video game ecosystem will probably keep churning out games for about the same $60 for another while but it’s sure to change in the future.