Topic: The Price is Right? Gaming Price Discussion

The recent news article about Shadow of the Tomb Raider’s quick price drop has be thinking about gaming prices in general and I wanted to know the community’s feelings and discussion on game prices in general. So this is not meant to be about a specific game like Tomb Raider per se, but rather where are gaming prices going, and what do you as a video game consumer consider fair pricing?

Let me start with some food for thought to initiate discussion. These are just observations:

• We know that standard new release AAA game prices have been locked at $60 (sorry, I don’t know the British or European equivalent off the top of my head) for a long time. Much too long probably. Games have actually been more expensive many years ago in the cartridge eras, I believe (I didn’t really buy them but this is what I’m told) and I think that $60 has been standard since PS2, despite inflation and increased development cost.
• Publishers have tried to close the gap and compensate by adding DLC and microtransactions to effectively keep the base price down but keep their profit margins.
• Another interesting observation is that despite all games being $60 at launch, their price will settle in at different price points within a few months. Some stay at $60, some come down drastically.
  I’m no economist, but I think the long term price of games is effected by a few things — obviously the popularity of the game is one. Also the availability of the game (many Japanese ‘niche’ games remain more expensive due to shortages). The second hand market I believe effects the price greatly. I’ve observed that as soon as used copies flood the stores, typically PSN sales start happening which mimic the pre-owned prices.
• Despite the market norms, some high quality games have hit market at $40 or $50. Lost Legacy and Ratchet and Clank come to mind. And obviously indie games and AA games hit lower launch price points as well.

So taking these and your other thoughts and observations into account —
Would you be willing to pay more for a new game if it meant less DLC paywalls and microtransactions? If so how much is a fair price? What do you predict PS5 new game prices will be? Do you think game prices are too high? What do you think about price drops? Do you wait to buy a game due to inevitable sales and decreases in price? Do you fear the move to digital will do away with second hand game availability and take away market pressure to reduce the price of games after they have been out for a while? How do you feel about that?

Basically whatever you want to rant or discuss about pricing, have at it. 😃

@Th3solution

It's often been my train of thought - that even including hardware, gaming is one of cheapest past times there is. It's also inflation busting. As you say, a new console game from a well known studio now will cost around £40 - £50; just as a new MegaDrive drive game cost that many years ago.

While production costs vary - it's the split where we end up with post release sales opportunities.

Once a cart was out, that was it - the cartridge was relatively expensive on the whole, and the developers and publishers got paid.
While that really hasn't changed all that much, now for a £50 game, there's usually an intense, expensive, multi-faceted marketing push to go with the incredible production budget that just wasn't there before. So - the game still ships at £50 - but likely cost (at least, conservatively) ten times the cost to make than a game did 25-30 years ago.

So - you have to go with a free to play model, which is potentially very lucrative, a post release content model or an amalgamation of both to make as much money as possible.

I have no particular issue with post release paid content... if it's new, if it's an addition to a game, be that in story content, items, cosmetics, music - whatever. It's there, it's a choice.

Where I do object is when that post release content is obviously cut from an otherwise complete, full price release. That's something that I think is very subjective for different players. So 'right & wrong' perhaps are too simple terms to use.

I don't particularly object to season passes even - but again, if it feels like I'm paying for content that's just missing from the game I've already paid full price for - EA's Star Wars Battlefront for example - then that's just a crappy way to make money.

Personally, I'd rather pay more for a complete game, not pay slightly less then a third/half/same again for 'extra' content. I'd rather feel like that a developer who does release extra content for a game has developed that content AS extra content - not just something snipped from the main release to sell later.

Games generally cost a lot of money to make - and sell for around 50% below where inflation would have them as well as lots of people taking advantage of semi-constant sales. As we can see all to often these days - it doesn't take much for a studio to go under, even ones with a catalogue of beloved games and even recent successes.

To speak on the point of Tomb Raider, while I fully understand that people are upset - beyond the positive reviews, once the game is complete - shifting units is the most important thing. TR released in a busy window - sandwiched by probably the most heavily marketed game of all time, and the long - awaited GTA on horses sequel that's sure to sell ridiculously well too. I'm sure TR did OK, but Telltale did OK - or so we all thought.

@KALofKRYPTON Yeah, I think your thoughts are on point. I don’t mind the post release content existing as a means to maximize profits if it’s not cut from the original game. My concern is that next gen will usher in an entry price most likely of $70 or actually even $80 I think is a real possibility. The market could justify a 20-25% increase in price of a new game. However, the DLC and Season Pass practices are so ingrained in us now that I think we will still get post release additional paid content, so complete versions of a game may end up being over $100.
This coupled with the issue I alluded to at the introduction of the move toward digital will neutralize the pre-owned market competition and I foresee then that we won’t see as many sale prices on games post-launch.
The end result may end up being still spending $80-100 for a game that has been out 6 months, whereas now the same game would be $40 on PSN sale (or preowned.) I can’t imagine the market would support such pricing, but we are headed that way.

@Th3solution One of the reasons, well basically the only reason, why cartridges were more expensive was because the cartridges themselves were more expensive. The manufacturing costs were up to $30 per cartridge (and I don't think that price is adjusted for inflation). They also came in big boxes, took up more space, etc. The profit margin on those games were a lot lower than they are today. This also meant that prices were generally all over the place back in the day; these days it's mostly €60, but with the occasional exception for a remaster, remake, or spin-off for around €40. I definitely remember paying around €40 for games in the 90s, then it became €50, and €60 was the norm on PS3/360/Wii U. And it's not strange to find new games on the digital store for €70 these days. Breath of the Wild was €70 digitally, so was last year's FIFA game, and this year's FIFA 19. So in a way, prices have gone up.

More importantly is the increase in profit margins; the move from cartridges to optical media. The price of printing a disc is only a few cents compared to a couple of tenners for a cartridge. Digital is on the rise, and without the middleman, publishers are able to rake in an additional €10-20 per game; and it saves them a few bucks on manufacturing, shipping and storage costs. Add in DLC, MTX, deluxe editions, gold editions, etc., and I don't think that the average consumer spends €60 on a game anymore. The only difference is that most of it is now gated off by a paywall, instead of a price hike.

To answer the question of whether I think games should increase in price? Not really. Take this for example: Call of Duty: Black Ops 4 Makes $500 Million in Opening Weekend. $500 million! Considering that one of the most expensive games was Destiny with its combined $140 million budget in development and marketing; $500 million means it's guaranteed to have made its money back in its opening weekend, several times over more than likely. For comparison; The Witcher 3 and Horizon Zero Dawn had a budget of around $50 million. Yet it's always these high-profitable AAA games that also include MTX, special editions, season passes, etc. If $500 million wasn't enough, I'd wager there's something seriously wrong with your budget management.

I think many of those games would've been perfectly fine without all the MTX, and the extra fluff. By the way, this is a pretty interesting video on the topic: https://www.youtube.com/watch?v=0qq6HcKj59Q It shows that companies like EA and Activision actually spend less on development costs each year, yet their profits keep growing.

Anyway, unless they can provide us with transparent evidence that they actually need the money, no, I don't believe it. If the game is good, it will sell; and a few million copies across all platforms tends to be enough to make a profit for most AAA games. If the AAA companies were actually struggling to survive, you wouldn't hear them every year boasting about record-breaking profits; billions from micro-transactions alone. Nah, this isn't about ''needing'' the money, it's all about ''wanting'' the money. So yeah, $60/€60 is the right price I'd say!

Maybe Shadow of the Tomb Raider wasn't selling well? I mean isn't that usually the case when game prices drop so quickly after release?

Fist of the Northstar has already dropped to $51 on Amazon just after three weeks.

I'm hoping SCVI Deluxe Edition follows suit as well.

@WanderingBullet I’m feeling the same about SoulCalibur. After seeing reviews I want to get the game, but I’m suspicious that it will fall victim to early price drop as well, so I’m trying to decide.

@Th3solution I guess it depends on if you want to the season pass contents or not. Personally, I wasn't keen on paying (full price for the season pass) $40 extra for the Deluxe Edition.

There are also retailers to consider in this. I know the push for digital only is real - but I really like being able to go to shop or order a game online and have a physical copy delivered. While their mark up is sometimes/often ridiculous, I'd rather help keep them in business too.

They don't help themselves occasionally - most recent example for me is GAME selling the Ace Combat 7 Streangereal Edition online for a clear £40 more than 365games.

Also, while we're at it; as I said - this is all very subjective, and when it comes to the bigger franchises some have mentioned - namely CoD and FIFA, I know several people - friends and acquaintances alike - who only buy those games. They gaming lives are revolve around spending their year with that annual release, then moving on to the next.

I think I bought just 2/3 games on D1 this gen and all the remaining once on sale, mainly for well known issues: half baked games needing patches, less time to play meaning a new game is out but I still have to finish the last I bought, GOTY editions that offer more content for less money...
RDR 2 is € 75 here in Italy and the extra € 5 may be related to the second blue ray, nothing strange. But even if it's surely a great game I wanna play, why shouldn't I wait few weeks to buy it saving something? One can find retail games for few coins everywhere (just got Metro Redux for € 10 and two months ago Ni No Kuni 2 for € 20) so I prefer to buy "the-game-everyone-talk-about" few weeks later, investing the money I saved buying it for less in good games I've never had the time to play with due to the rich PS4 library.

@RogerRoger That’s true that there is a difference in what we, of the more enthusiast variety of gamer, and the average or casual variety will be willing to pay or be used to paying. These companies do have to keep us all happy so that’s a good point. And we, along with the gaming journalists, take the responsibility and ‘fall on the sword, so to speak to police the practices of publishers regarding their trying to pull one over on us. I hadn’t considered the need to simplicity regarding price for the less informed consumer, so that’s a good point. It would make sense for Red Dead Redemption 2 to be $70 or $80 due to the large production value and sheer number of hours on entertainment it will likely contain, but many would be driven away at that price based on perception, when other games are $60. Rockstar certainly realizes the increased number of sales trumps the fact that many of the hardcore would pay $80. Basically the early price drops are the market speaking in the same manner. Squeenix feels they stand to gain more from increased sales numbers of SotTR than from the price. I, like you, have no buyers regret for being an early player of the game. It was worth it to me for immediate satisfaction and to support a franchise I love.

I feel like the next trio (so switch 2/super switch/whatever is included) will bump up prices to 70. with the switch handhelds as a stand alone console are dead so the prices are normalizing to 60 (mostly not including things like remasters and really really old ports as in more than 3 years as their prices are all over the map) now which means they can slip in the 70 (or deluxe edition as ubisoft does it) as the norm. Xbox TWO and ps5 can just say that its due to graphics/dev cost. I will say that I'm leaning towards buying the season pass up front and buying the game once the pass is done and discounted (if not outright waiting for a definitive/GOTY edition).

Very rarely do I pay full price for games. I have such a huge backlog to get through that I have plenty of gamed to play right now so in that aspect it's not like I don't have anything to play untill X game releases.

Also I have other things that I need to pay for before I can even think about getting a new game bills, groceries, and other necessities that are more important.

And last it doesn't matter to me when I get to play a game as long as I get to play it. I am not one of these fanatical gamers that OMG I MIGHTY DIE IF I DONT PLAY X GAME AT LAUNCH who are at every midnight launch event. It's a hobbie, there's more important stuff in life to do.

Also with GameFly if I need to have it launch day and don't have the $60 I can just rent it from them.

So yeah $60 doesn't bother me too much although it have wondered why a base game goes for $60 where as say a base movie on Blu-ray non collector's edition or anything along those lines goes for much less. You take something like Avengers for example and the cost to make that costs about as much as some of these games like Red Dead 2 or past Call of Duty games. Yeah I guess you can say that movies make alot of the money back in the theathers but still tickets don't cost $60 a person. Just seems odd.

@Tasuki I guess you could argue that films have a broader appeal. More people buying it (although let's be honest, how many people actually buy films, physical and digital?), means they need to make less profit per item.

On the other hand, I also think you could make an argument that games are on the expensive side, despite what we've been paying for them in the past (we just got screwed over even worse in the past ). I mean, just look at COD making $500 million in its opening weekend, that says enough. AAA companies don't have anything to worry about when it comes to the $60 price tag. They'll make their money back no problem.

EDIT: I remembered TV and streaming services like Netflix; they also pay a lot to get the film licences. That's another way they make their money back.

First off, the price at launch is 'High' but the Publishers can get away with selling games for that much. The cost of games has gone up though - half of its hidden behind DLC and Micro-transactions though. The cost of development may of gone up but not to the extent that publishers can justify selling games at higher price-point. The 'loss' of sales through the 2nd+ user has dropped significantly as the rise of digital has offset that!. Companies like EA and Activision have grown too - EA in 2010 was a $4bn company now its $33bn, Activision have grown by $50bn in the same time frame - yet bot are releasing fewer games, reinvesting money into the industry they are reliant on but instead would prefer to sell 'Live service' games - games that have a 'base' price but continue to generate sales.

The same games console owners pay $60/£45 for, PC gamers pay less for - its not because PC gamers get 'less' or cost less to make, its because the industry cannot get away with charging that money for where as consoles - thanks to the era of Cartridges, became accustomed to paying a LOT for games so they have continued to keep pricing high because they can. If you can sell high, you make back your investment with far fewer sales and start making a profit much quicker - if the game doesn't sell at that price, they can drop it to find a price that starts selling but instead of needing to sell 1m copies to be profitable, it now needs to sell 1.2m. They can still drop games to half their price and still be profitable - maybe after 3 or 4m sales but the higher the number of sales needed, the longer it takes to be profitable and maybe even won't as even the 'best' games don't always sell more than 5m - certainly not in the first few month's or so and the game market is very fast paced. By that I mean that the first few months are generally the 'best' for sales and then drop off as the industry has moved on to the newer - I know there are exceptions and sometimes DLC or some addition can create spikes in sales too but generally, the best week for a game is the first week and then the sales drop off so its best for publishers to have the highest price a launch.

If you want to look at the cost of games, look at games like Mass Effect: Andromeda. That had a £40m budget yet sold 'poorly'. EA still made money on that game despite selling less than £2m a the time they said it was profitable. That's around a similar budget to H:ZD and a LOT of other AAA games. The issue with 'profits' is that a company like EA will make 'promises' to investors and share holders, when a game isn't as profitable as predicted, that messes with their projected growth. Its not enough for a game to be 'profitable', it has to meet profit targets at the least in a competitive market. Shareholders dictate when games come out to a degree too with EA - they have to release within a certain financial year - hence any delay may well see a Feb/Mar release as we have seen with Hardline, Mass Effect, and next Anthem if they miss the most 'lucrative' Q4 Christmas window.

A game is worth what someone is willing to pay for it! If that means its worth the asking price at launch, then that person will buy it at launch - if not, they will wait until the price drops to a price point they are willing to pay. If someone is not interested in Multi-player or online content for example, only buying a game for its 8hr campaign, then they may decide the game isn't worth the release window asking price as they are only interested in half the game. If you can buy a AAA game for less than half the price - albeit a few months old, then why buy 1 'new' game when you can get 2 older games for the same money.

@BAMozzy @Octane @Tasuki @Ryu_Niiyama @beemo @WanderingBullet @KALofKRYPTON @RogerRoger @andreoni79
Thanks for the insightful and interesting thoughts. It seems there is a variety of opinions and feelings about game pricing and where it should go from here. I think @BAMozzy summed up things well with “A game is worth what someone is willing to pay for it.”
Feel free to continue to discuss and predict and anyone else’s thoughts, experiences, or feelings are welcome. I think the price trends is an interesting microcosm of the gaming landscape.

Taking into account what has been said and just gut instinct — I was wondering what the community thinks about which of the following major releases from Sept/Oct will drop in price next? —
Spider-Man, Valkyria Chronicles 4, Assassin’s Creed Odyssey, SoulCalibur 6, or Red Dead Redemption 2 ?

Spider-Man is the “oldest” of the group but is selling like wildfire so I doubt a price drop anytime other than a Black Friday sale. VC4 is probably at most risk for needing a boost in sales, but it’s a Japanese port and I find that sometimes these don’t get a discount very quick. I waited forever to find Yakuza 0 at a discount. AC is selling well too but Ubisoft games are common to drop in price after they flood the market for a few months. SC6 might need to boost its sales too, given the heavy competition, so I wouldn’t be surprised there. And finally RDR2 is probably going to take very long time to price drop in my opinion, but I could be wrong. I wonder if it will even need a Black Friday sale price to compete for the holiday monies.

@Th3solution I'd say Soul Calibur 6 will be the first to drop.

@KALofKRYPTON What’s your reasoning? (Not that I disagree, I’m just curious)

@Th3solution

Spider-Man doesn't need to drop, whatever the reported budgets are - I'd doubt that a price drop while the main marketing campaign is still very much active will happen.

Ubi hates discounting AC games as it is, it's pretty rare for one so soon after release to receive a discount.

VC4 has essentially a genre audience and no need to drop the price - it's already available for sub £40.

Red Dead - Another very high profile and expensive release from RockStar. It's a lot of game that will probably rack up more sales than Spider-Man in no time. Also, it's RockStar. GTA V took ages to drop in price at retail.

Then to Soul Calibur - it's a fighting game for starters. Certain corners of the fighting game community will be all over it for sure, but it's a crowded niche with ingrained headliners. Also it's hardly a mainstream release, so the drop to lure the casual player I think will be here.

EDIT: RE SC - I'm not certain that it'll be a permanent price drop, but at the least first to go on 'sale'.

@KALofKRYPTON Makes sense.
Some pricing is obviously regional too. Especially with Japanese games. I didn’t know VC4 was already available sub $60. All the retailers around (and PSN) have it for $60 but I see the lower prices online.

@Th3solution drops in price for things like Black Friday could occur for games like RDR2. Whether it remains at that price after though is debatable. As for 'how much' of a discount will depend on the game in my opinion and the retailer. I have noticed that some price drops - that may only be a few £'s/$'s from launch - are made to seem 'bigger' by quoting the RRP as the base price. Save £10 on RDR2 from the £50 RRP price yet was on sale for £43 at launch so effectively only saving £3.

Permanent price drops are likely to occur when a game isn't selling the numbers expected/wanted or based on competition prices too. Most retailers will buy their stock from a distributor and then price their game depending on the competition rather than the recommended RRP. Its better to sell at lower profit margins than not sell any at the higher profit margins because everywhere else is cheaper. If they have a lot of stock left after the initial weeks after release, they will drop the price to encourage sales. Others, who may well be selling well may drop the price too to remain competitive.

I wouldn't be surprised if Publishers get their 'profit' from selling the game to distributors rather than to us the gamer. That is probably a 'fixed' profit from each game regardless of the retailer price. The variable profit is with the retailer, how much they buy the game from the distributor and the price they can charge based on the competition prices. No doubt the major retailers buy in bulk so get a much better price per unit than small independent stores who may not buy as many copies. Therefore places like Amazon and Game can charge less and still have a decent profit margin. If a game isn't selling, its still better to get your money back than have that money tied up in stock. If they can sell it for Cost + some margin of profit, then bonus and I have no doubt that in some cases, some games may well be sold at cost or less because its better to get some money back than no money back, clear the storage for stock that is selling well and is profitable. Its not that different really from any other retail business - not just gaming.

I have no doubt that long term, the base price can drop too - the price the game costs to a distributor and then to the retailer. After the cost of development (around £40m seems to be the figure for an avg AAA game) and any marketing costs are recuperated, the only 'costs' incurred are those of the materials, printing and distribution. However, retailers and all those in the chain back to the publishers will be aware of well the game is selling and will keep the price high to maximise profit margins. Why drop the price if people are still willing to spend the asking price - even if they could now? A game, like any other product, will find its price point, a point where its selling enough to keep those in the 'selling' business happy. Maybe they could drop the price and sell more but its whether or not that price drop would sell enough 'more' to offset the smaller profits per game. If you are only getting say £100 profit from every 20 games sold and drop the price and only sell 5 more games in the same time frame but only get £80 profit, then its better to keep the price higher and sell a few fewer.

Of course this is based purely on Physical editions. Digital is a very different thing and its the lack of competition that keeps prices high. They know they can charge RRP (or higher prices) because you can't go to another digital store and pay less money. They may try and make 'digital' seem more appealing - instant access, pre-downloads on pre-orders so you can play at 'mid-night' on the day of release (or as soon after when you first turn on your console) etc but they are still selling just a licence to play the game that is locked to you where as a Physical release is selling you a 'general' licence. The game itself isn't what you are are buying and you never own the code - the code is necessary of course to play but unless you have a licence to access that code, its unusable. When you trade in a 'physical' game, you are really just trading in your licence - hence you can't play the games even if all the game code is stored on your HDD. The point is though that you are not paying $60/£45 for a game, just the licence to access that game.

The game itself belongs to the either the developer or the publisher. Activision for example own Crash Bandicoot 1-3 even though these were made by Naughty Dog. Naughty Dog needed permission to use Crash Bandicoot in Uncharted 4 even though they were the ones that built that game. I picked Crash as that was not a 'licenced' character like Spider-Man (owned by Marvel) and not sure who owns the Spider-Man game (Sony? Insomniac? - Maybe need permission from Marvel too if they wanted to release it on a different gen in the future because of Spider-Man being owned by Marvel - its more complicated than Crash) but something ND themselves created yet cannot use without permission now. Bungie can't use 'Halo' either despite creating that game, the artwork and characters. As such, you aren't paying for a game - you are paying for a licence to access the game which is owned by a company. Of course no company would want to spend money on a project that they cannot recuperate their money back by selling enough licences but they have the 'game' as an Asset that they can make money from in other ways - like merchandising or even selling the code, the license(s) of any copyrighted logo's/characters etc, Assets etc. As we have seen in the past, Activision had a big lawsuit with the original creators of CoD and had some game taken off the market for using 'CoD' assets. You can't take a 'CoD' gun and stick it in your own FPS game because that asset is owned by Activision. Again this is more proof that you don't own 'anything' other than a 'license' to play the game - the game is supplied to you so you can access it but you don't own any of the game itself.

What you really should ask is, are the licences worth the price. I am sure that Sony/MS with their conditional licenses for PS+/GwG games aren't as 'valuable' as a 'full license - not that it makes much differences to most of us as we still get the full access to the full game (as long as we keep up our subscriptions) and can seem little different to actually purchasing a game - but they are literally only giving you a 'conditional licence' but to access that game, you still have to download it but like all other games, you never 'own' the game itself - just a license.