Why the end of the $60 video game is near

7:53 pm - 04/22/2012
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There's a war going on in the video game world, but it's over dollar signs, not virtual land.
A boxed copy of Call of Duty: Modern Warfare 3, the world's top-selling console game, costs $60. Angry Birds, the world's biggest mobile game franchise, costs $1 for software that you can download in under a minute. The pricing gap between what's traditionally considered the highest-tier premium games and the fast-evolving mobile, tablet, and social gaming market is widening, and it's spelling disaster for countless game makers caught in the middle.

According to The NPD Group, physical content sales were down 8% in 2011. This year hasn't been a cakewalk either, with sales continuing to slide. Though some of the blame can rightfully be foisted upon the decline of the once-mighty Wii, it's apparent that people aren't buying games like they used to, and the industry is scrambling to figure out why. But most agree that it begins — and likely ends — with the high cost of new games.
The sentiment that games cost too much is certainly not new. Wired's Chris Kohler recently outlined a list of reasons games cost too much and combated the argument that the used game market can be blamed. Nexon America's CEO Daniel Kim told GamesIndustry International that "Free-to-Play" games (often called "Freemium" because users are incentivized to pay small premiums for more content) are not going away and the traditional model will have to change.
He's right. $60 has always been an embarrassing, crippling barrier of entry compared to gaming's entertainment peers. A brand new book, DVD, or CD rarely breaks the $20 mark, and even the highest tier Blu-rays cap out at around $30. Why are new games so pricey?
Publishers have long blamed console games' high price on a plethora of issues. Skyrocketing development costs is a biggie, as is piracy. Most recently, publishers are taking aim at the used game market, charging that the buying and selling of used merchandise is taking cash out of their pockets. But whatever impact on profitability these concerns have, it doesn't change two monumental problems:
- Psychologically, $60 just sounds expensive. This isn't anecdotal, this is common sense. Unless you're financially independent, $60 outright repels a vast slice of the entertainment consumer populace that the games industry desperately needs to convert to grow and survive.
- People are having fun playing more affordable games. The choice and product quality at the bottom end of the pricing scale -- anything under $15 or so -- has grown tremendously in a relatively short period of time. Games like Draw Something, Angry Birds, and Infinity Blade aren't only played by 'casual' gamers.
That being said, the top perennial franchises like Halo, Elder Scrolls, Battlefield, and Madden aren't going anywhere, at least for a while longer. Games that critics and consumers universally laud as "must-haves" can continue to support this massive premium. But it's the mid-tier titles, the unestablished IPs, the riskier endeavors, the worthwhile games that don't quite master the magic formula, that will never get off the ground. Even highly-praised franchise entries like Rayman Origins struggle, and publishers like THQ have been threatened with NASDAQ delisting despite enjoying sales that "exceed expectations." Black Rock, creators of critical darlings Pure and Split/Second, were denied sequels by publisher Disney to focus on freemium content and eventually shuttered entirely.
The most egregious example of old-school thinking is the release of Plants vs. Zombies on PlayStation Vita. One of the rarer "crossover" successes, the game costs $3 on the iPhone but a whopping $15 on the Vita for an identical product. Why? Because it's a dedicated gaming device and core gamers are accustomed to paying higher premiums. How long can this madness last?
It's not just Facebook and smartphones that threaten to steal that audience. The consoles themselves have thriving online stores in Xbox Live Arcade and PlayStation Network, offering gaming alternatives with high production value and more relaxed pricing. Just look to successes like Battlefield 1943 (over 1MM units sold), Xbox's Castle Crashers (sold 2.6 million), and recent PS3 hit Journey, which quickly became the PSN's fastest-selling title ever.
If the Old Guard would just drop the charade that $60 is the only feasible price point, they might find an unexpectedly higher volume of purchasers to mitigate the reduced revenue per gamer. I realize that the $60 Call of Duty costs some tens of millions more to develop, market, and distribute than the $1 Angry Birds, but is there really a $59 differential there? Someone wiser than me in economics can surely model up a theory that finds a middle ground.


What do you guys think? I haven't bought a full-priced $60 game in two years (FFXIII was the last) and I don't see that changing, but I can also see why games like Resident Evil 5, Lost Odyssey, and FFXIII (games that I still replay even now) cost me $60 in the first place. I also think there's a really obvious reason why Angry Birds and Call of Duty have a $59 difference...

Pic is FFXIII-2 because it's what I'm playing right now, but I got it as a present because I knew this mess wasn't going to be worth $60
bishieaddict 23rd-Apr-2012 12:06 am (UTC)
I just wait until the price drops. I have a backlog of games so I wait until it's at least $40, if I really want the game. $30 if I can wait...and maybe even $20. The prices drop so fast. And there's also Steam sales for the PC.
I do buy some apps, but they can't compare to the games for consoles...
laurasue 23rd-Apr-2012 12:10 am (UTC)
Every game I've bought in the last few years was either used, or I waited for the price drop. I just can't afford to spend sixty or even fifty bucks on a game, as much as I may want it. I only have Black Ops because one of my best friends gave it to me as a gift. If I HAD a higher income I'd probably buy games all the time, but alas. No dice.
zeldana 23rd-Apr-2012 12:53 am (UTC)
Same reason why there's huge price differences among different types of cars... I don't understand where the confusion comes from.
emirasan 23rd-Apr-2012 12:56 am (UTC)
This is why I love Gamefly so much. If I'm not sure about a game, I can put it on my que there and play it. It helps me figure out if a game is going to be worth spending any money on or not and how much. I also love using Gamestop to reserve games I know I'm going to want. Pay a little down and then a little bit until the release date. Most of the time, I can have the game paid off well before it's out and that can save me a lot of time too.
myrasis 23rd-Apr-2012 01:02 am (UTC)
if this does happen, good. a friend of mine was telling me a while ago how there should be something that decides on the prices of games, based more upon the length of the game, or at least to have game review sites rate games based on how much a game would be worth to play. i think either of those would be preferable, having prices determined by playtime would also encourage having some meatier stories, even if that'd go hand in hand with having filler.
ayashi 23rd-Apr-2012 01:04 am (UTC)
Hmmmmmmm I dunno. I don't mind paying $60 for a game that I'm going to get a lot out of. Say what you will about Mass Effect 3, but I have played the shit out of that game and have gotten about $1/hour entertainment including multiplayer (and I bought the CE). Generally if I can get to the point where I get $1/hour entertainment, I don't mind buying a game at that price. Obviously iphone/facebook games tend to be a lot cheaper than $1/hour but I don't really play them as obsessively as "real" games either. The only iphone game I've played that I felt had as much/nearly as much depth as a standard console game was Infinity Blade.
nevermademe 23rd-Apr-2012 02:53 am (UTC)
yeah, that's something that bothered me in the article. An app game that cost $1 might be selling more than a console game, but I guarantee no one's playing that one game as much as I've played through some $60 games
patentpending 23rd-Apr-2012 01:08 am (UTC)
I don't think it's worth paying that price for games nowadays because it seems like developers nowadays are relying very heavily on downloadable content. Even though it's optional, because they rely on it, I feel like they release things that they could have put on the game disc itself to be included since someone paid full price for it, instead of waving it in their face and charging them even more than what they paid originally. I hate that a lot of the times, it feels like now, to get the full experience of a lot of games, downloadable content feels like more of a pressured must than an optional buy.
nevermademe 23rd-Apr-2012 02:58 am (UTC)
What do you think about games like Beautiful Katamari? I know a lot of people got mad because all of the DLC was already on the disc, but at the same time it was released at $40 with that extra $20 being DLC. By the time I bought the game it was selling for $20 so I didn't mind the DLC rly, but I thought it was a kind of different approach to lowering prices
patentpending 23rd-Apr-2012 03:19 am (UTC)
I've never played that game before but from what you're describing I don't know why people would be mad about that? I think that idea should be standard actually. I don't think there's any reason to make people pay $60 for an incomplete/half servicing game and then charge them extra to complete it. I understand they want to make their money but they really are discouraging people from buying games new/at full price with their shenanigans.
sadistic_dance 23rd-Apr-2012 01:45 am (UTC)
I feel like games are more expensive than ever but also shorter than ever. That's my problem with paying $60 for them.
mikeismyname 23rd-Apr-2012 02:33 am (UTC)
eh i got a job and a budget. buyer beware.

also, comparing a game where hundreds of people who poured 100s of hours of work to a flash game that was ripped off another flash game is stupid.
voyevoda 23rd-Apr-2012 03:50 am (UTC)
I once paid $100 for Hey You Pikachu! so games seem cheap and masterpieces compared to that.

Joking aside (though my father did pay that much for it, hooboy), I understand why some games are that much, and why you don't often see drastic price drops for them even months after they came out. It's taken several years for Red Dead Redemption to drop significantly in price- which I know because I was staking out new-and-used bins for it -let alone some other games. They take a lot of manpower, a lot of hours, a lot of money poured into them, and if they live up to that effort then they can continue to ask whatever price they want for years because people will pay for a 'good' game.

But I still don't buy many new games anymore. $50 felt like a decent price for a game. For $100 solid I could get two new pieces of entertainment that would last me (usually) a few months, if not a whole year. And true, the difference is $10-20 ultimately, but for some reason that $120 feels less justifiable than the $100.

Then there's also the fact that I grew up and got a job and lots of shiny bills to pay, so the excess hundreds for games aren't there anymore. Even if there were, though, I actually think it's gotten harder to just walk into a game store, reach into a bin and pull five games out that you want to play. Truly good and worth-the-money games are few and far between for me.

Except November. All the good games seem to come in November (which was great for my pocketbook this year when I moved in October cough but anyway).
suedeheadspike 23rd-Apr-2012 09:29 pm (UTC)
I once paid $100 for Hey You Pikachu! so games seem cheap and masterpieces compared to that.

Late comment is late, but THIS so hard- even if you are joking. I remember having to save my allowance for MONTHS in advance of Phantasy Star IV (it was just a hair shy of $100-) so it's hard for me to get worked up about the cost of games. I pay $60 for things that I need to have Day One, anything else I wait and buy it at $40.

gringotts 23rd-Apr-2012 07:25 am (UTC)
I'd KILL for $60 games :( Here we pay $100-$120 for a game except at a few stores who do new releases for $80.

I usually wait for a price drop or for a used copy though.
queenbathory 1st-Jun-2012 10:58 pm (UTC)
this is a really late comment but damn! where do you live?
gringotts 1st-Jun-2012 10:59 pm (UTC)
lithiumflower 23rd-Apr-2012 10:49 am (UTC)
I got FFXIII-2 Like New from Amazon, $35. Running around in my Ezio costume collecting fragments. :)

The last $60 game I bought was Uncharted 3, which I regret, since it wasn't worth it. Especially since I don't do multiplayer and I don't have time for people crapping out short, crappy single player experiences cause they think the multiplayer will make up for it. I not going to make that same mistake for AC: Revelations. Before that it was the Collector's Edition of Zelda, which I don't really regret...but I also haven't finished playing it and I'm not as enthused about the game as others because there is no end to how much I hate the controls.

I've played mobile games on my phone, but in the end, I always grow tired of them. They're fun for a week and then I can't be bothered. Especially since keeping the save data is a PITA, especially if you flash roms a lot like I do. It's just not worth it to accidentally lose my Cut the Rope data and have to do it all over again. Plus, I hate the physics, reaction time nature of a lot of the games (CANNOT STAND ANGRY BIRDS). If I want to play those types of games, you can find some of them on Kongregate for free.
rottenzombejohn 1st-May-2012 07:31 am (UTC)
Thats why I borrowed Resident Evil: ORC instead of paying for it. Was not dropping $60 after all the negative reviews and I'm glad for it. The game sucked control wise. I'm gonna hold off on Resident Evil 6 also. I hated 4 and 5 (ESPECIALLY 5!) so I'll see if this one makes the older fans happy first.
world_dancer TellTale Seasons23rd-Apr-2012 02:22 pm (UTC)
I also wait for the price to drop. It always does eventually.

I think TellTale, which did Back to the Future, Tales of Monkey Island, and Jurassic Park recently is on to something with doing "Chapter" releases. I haven't played the Jurassic Park one, but BTTF & Monkey Island were high quality adventure games and affordable: $25-35 for the whole "Season" or you can purchase episode by episode, but I can't remember the price for that off hand $8? Anyway, quality content at affordable prices, and the money flow into the company is pretty consistent so that they can continue to work on titles over time.

Here's their site for anyone interested. They're releasing Walking Dead this month: http://www.telltalegames.com/

Right now, I think the publishers are right that they need a lot of money to develop the $60 games. But I'm unsure on the economics of if that's the best plan, presuming the titles eventually drop to $20. I have no idea what the economic bell curve looks like for sales, only that fewer people buy at that price, and that knowing the price will drop dramatically reduces the demand even further.
weekendoffender 23rd-Apr-2012 10:40 pm (UTC)
People are complaining about $60 games? Come visit Australia where the prices for new games are double that.
neo_phoneix 25th-Apr-2012 10:15 pm (UTC)
Come to NZ where games are even MORE expensive. It's going to cost me $100 for Diablo 3 and Blizzard is making us pay in AUD when it would be cheaper in USD for the download.
rottenzombejohn 1st-May-2012 07:27 am (UTC)
I think they should come down in price. I remember back in 1992 when Street Fighter II came out for the SNES my father paid $85 for it at Toys R Us...$85 in 1992, just think about how much that is! One friend of mine had the Neo Geo $200 a game, I kid you not. I remember when the PS1 was around what was a new game $40? And you know what? Those games were far better than half the things I've played today on my 360. I feel like I'm paying $60 for all flash and no substance. Say what you will about older games atleast the content and gameplay was worth it. I want to get Prototype 2 in the worst way but I'm NOT spending $60 on it. I'll wait till it drops to the $20-30 range. I waited a long time to get the PS2 and when I did all the awesome games had come out and were $20 or less if I got it in the used section. The same thing happened to me when I finally got a 360 this year, paid much less for the system, and all of the games that came out since launch that I wanted.
queenbathory 1st-Jun-2012 11:00 pm (UTC)
like many of you I wait for a price drop
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