Why Games Will Only Get Cheaper

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Karadalis:

Gennadios:

Games will get cheaper, but it'll happen after the next video game crash, where the talented few survivors gather in small groups and start making appropriately budgeted indie games.

That sounds like a weird plot for a zombie apocalypse movie in the game industry....

I think there's one going on already. The first sign was when I unlocked Mass Effect's N7 armor for Dead Space 3. I just couldn't tell the difference between those two games/franchises after I equipped it.

I'm pretty sure the article meant to read "cheaper in quality" because while games are significantly rising (as a prerequisite) in visual quality, they are losing meaning, boiling down to the safest possible mediocrity allowed in this multimillion dollar industry where any risks are viewed as "loss of profit" from every corporate angle.

I'm sorry, but my used game purchases have only gone up. Adjusting for inflation may make a compelling argument for those who care about such things, but I've only bought VERY FEW games new this console generation because of rising prices. 99.99% of my game collection was bought used. I think the only two games I bought new were Bioshock Infinite, and Skylanders Giants, if that tells you anything about game quality/expectations. I didn't even bother to buy the last 2 Assassin's Creeds because of the stagnation the series HAD to have been suffering by then.

My WiiU is still a purchase I'm proud of. Every good feature of the upcoming generation is already built in, they're just waiting for the other two children to come out of their proverbial closets to release the good games.

CAPTCHA: get your goat
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CriticKitten:
People always cherry-pick their numbers from the early 90s and then adjust them for inflation as "proof" that the market has always been dropping in price, but the reality of the situation is that they've been steadily increasing on most games. Games in "the olden days" varied much more greatly in price because of the medium they were using, as bigger games required more chips in their cartridges which required a higher cost. But the "standard" game was relatively inexpensive. As the "Big Three" all swapped over to CD-style storage and everyone started shuffling towards the "same" relative design, the prices began to level off and steady themselves because developers no longer had to build their games three different ways to make them work for each system. Compare the range of prices on, say, the NES to those of the Wii and you'd find that it's a much smaller range of values. It's a relatively weak argument to compare to prices in the 90s because everyone was using such vastly different media for their games.

Not to mention that adjusting for inflation is a fallacy in and of itself, as it implies that games have been dropping in price when in reality, they've just been increasing at a rate that's much slower than the rate of inflation on money. That doesn't mean "they got cheaper", it means they didn't grow in price as fast as inflation did. In fact, electronics generally tend towards the opposite of standard inflation trends (they appear to "drop" in price over time using inflation, when in actuality they're still roughly the same price they were before, or at times priced even higher), so using inflation as a basis for your argument is a fallacy by the grounds that standard inflation doesn't apply to a non-standard product like electronics. I'm betting if you plug food costs into an inflation calculator, they're higher now than ever before.

This "games are getting cheaper" argument keeps getting trotted out on a regular basis without any actual thought put into it from a practical standpoint. Yes, after inflation, a game that costs $50 from the N64 days can be made to look like it "cost more" than today's $60 games, but that's being somewhat dishonest with the numbers. A larger percentage of our money goes towards essentials (which have grown much faster than the rate of inflation), leaving less discretionary income. Thus, retailers have had to increase their prices at a slower rate to make their products more marketable and available to a wider audience. On top of this, pricing has tended only to change after the introduction of a new generation, which means every couple of years....whereas pricing on other products generally change whenever they want or need to.

Pricing isn't dropping, from a practical standpoint. It's just increasing at a much slower rate than most other products, so as a result, the hobby has become more affordable than it used to be.

I think the biggest point is that the gamer market has blown up. It's many times the 80's and 90's so even a 50% reduction in actual game prices doesn't account for just how many more copies are being sold to a market that simply wasn't this large ten years ago.

This is all good market science, but it does still come across a bit... not naive, but very... "optimistic".
As Mr. Sterling pointed out several weeks/months ago, should the industry eliminate the used market, competition is removed, and the publishers now have a monopoly, and monopolies can be very dangerous for the consumer.
Considering the majority of the games market refuses to restructure its pricing now, when it desperately needs to, is it sensible to expect it to lower its prices when it no longer has to?
Should the used market be eliminated, the amount of people who cave in and buy their games at their current full price, even if they buy fewer of them, may make up for the people who will simply stop buying games outright. That might be how the larger console market might think of it.
It's very interesting, what you're saying about the price of the resale being built into the initial purchase, but the man on the street hasn't considered that, and the industry knows he's not considered that, and may feel comfortable assuming he won't see why he should be outraged if the used market goes, and game prices stay where they are.

It's a sticky situation, at the moment the people who don't resell their games get ripped off, because they're still buying at prices that assume they will (the current system almost encourages people to sell their games... jesus christ) But the future you're proposing, conversely, would suck for those who do want to resell, as they may be getting better prices (if there's any decency left in the market) but it's not their choice to make that trade off.

Games won't get cheaper with digital only. Since when did lack of competition lead to lower prices?

Shuu:
This is all good market science, but it does still come across a bit... not naive, but very... "optimistic".
As Mr. Sterling pointed out several weeks/months ago, should the industry eliminate the used market, competition is removed, and the publishers now have a monopoly, and monopolies can be very dangerous for the consumer.

That isn't true. The game publishers will compete with each other for our money still. Competition doesn't require a used market to exist. The hotdog industry isn't about to fall over because you can't eat my hamburger after I've consumed it. Well, not in any civilized manner that is...

I don't think Jim said it would eliminate competition either. Just that it would ultimately harm them as the used or discounted market is where people find a new series they care about after playing but otherwise wouldn't have tried for the first time at retail price.

Brotha Desmond:
Games won't get cheaper with digital only. Since when did lack of competition lead to lower prices?

How is the second hand market more competition? You're talking about the same number of game publishers in both scenarios. There is no less competition. Why would you think that game stop is competing with a publisher like EA? All it's doing is taking EA's work and reselling it multiple times. Whether or not you agree with that practice it's still not competition. They aren't in the same market. Publishers are in the game software business, retailers are just that, retailers.

If you only had $60 bucks in your game buying account and had to choose between two games, let's say Bioshock Infinite and Dragon Age II. Let's also assume you actually like one of those more and they are the same price. You'll likely buy the one you want more. That's where competition in the gaming market is.

Respectfully, I must disagree with some points this article. I won't reiterate what has already been eloquently refuted, so here's a quick blurb.

So often, the arguments presented place the entire onus on the consumer. Bloated business practices are as much to blame as consumer demands.

I still don't believe games will get all that cheaper. They've been promising this forever, with little result. As Jim Sterling is wont to point out, EA stated years back how they said the market couldn't sustain a $60 model anymore, they had to go lower.

Well, they can't, to be sure, but neither have they lowered the prices. Instead, they often monetize an already premium priced product. I'll refrain from rambling further, because if I don't stop now, I'll end up writing a thesis on the subject.

I'll close by asking: why shouldn't consumers demand more for their money? Often, in these cases, competition breeds quality & value.

I find it funny you chose to note 75 versus 59.99usd, and then forgot to mention the in between period, for a decent time, in which new top price games cost 49.99. So 75, then 50 and then 60. Then again I also remember gobbling up adventure games in the late 80s and early 90s for the PC that cost anywhere from 10-30usd new, so, it's all relative. Prices tend to be specific to a particular format, those 75 dollar games were typically cartridge games which were just more expensive, overall, than a game off a floppy disc or CD ever was.

Maybe I am spoiled these days, but it doesn't change the fact that when a game gets knocked down to 5usd from a much higher price, off one of Valve insane sales, I'm a lot more likely to buy that than a 60usd game. It's just . . . common sense. If I can get just as much fun and content out of a 5usd game, why would I turn around and buy the 60usd game with no more content, and just as much fun? In all honesty, some of those 60usd games are so short, and railroad track linear compared to some of the cheaper games now that . . . it goes from common sense to being the outright choice, with exception in only the rarest of new games these days. Do I buy a supremely price reduced Fallout New Vegas (the edition that has all its DLC included, no less) at 5usd total, on Steam today, or do I buy the new 60usd linear shooter #3534634 that's 6 hours long?

Gee. I wonder.

It's cheaper to sell games, and therefore prices will decrease? This doesn't explain why X-Box 360 Games On Demand and 3DS games in the online store (it's probably the case with other digital places, but I don't have experience) start off at 40 (the price of a brand new released game in the UK) and stays at that until quite a few years after release. Even then, it might drop to about 30. Between them saying "well, we can decrease the price and we may get more customers" and "we can keep the same price, or maybe increase it since we'll have no competition, and then use said money to line our pockets while making ever more expensive games, while complaining we didn't hit 3 million sales", I really think the latter is a lot more likely.

The article makes an assumption that I consider wrong: That businesses aren't cold calculating dicks that will find any way to make more money.

i'm sorry, but i struggled to get passed the second page. Had a whole "the developer will pass the savings on to you vibe" that I couldn't get into.

I will say, the difference between PC all digital and console all digital, is consoles are a closed system, so will have a monoply.

I can't comment on iTunes etc because I've never used it and don't listen to new music. Netflix/LoveFilm are great, as long as they have the film you wanna see. they don't you better hope its in your blu ray/dvd/VHS collection then

This is the same website that hosts The Jimquisition, right? I haven't stumbled upon some kind of weird Twilight Zone-esque nether-Escapist, have I? No? Same website? Weird.

Video games are a luxury, but the fact that they're charging us $60 for a new game, and then acting like we're ripping them off when we can't afford it just bothers me.

While looking to the past is something we should do, in this case I agree with many others, and say that the prices then are not really that relevant to prices now. Tech has come a long way, and should be easier and cheaper to make. VHSs used to be the price of Blurays, and even those are slowly coming down from their price point. Cartridges and discs are not equal and comparing them is like comparing, well VHS to DVD.

I honestly still believe that MS fucked up what could have been a revolutionary system with their install disc and done. If that price was lowered, even by $20, that's a 33% drop in price. That also would mean that, if it costs that much to install, that used games wouldn't be relevant until they dropped the price of the installation. That would require less discs, more new game sales, and so on.

Prices aren't going to get better in the industry until either the publishers and what not are willing to just start lowering game prices, or gamers finally take the stand and say enough is enough, and only buy new games under a certain price, or just stop buying new until this gets fixed. Either way, it's going to be a bloody mess until then. I just wish that they'd create a full game, and instead of punishing those who don't spend that initial 60 to get a full game, would sell full games, and reward those who do buy it with extra things. Like if Madden gave you a $5 discount when you buy the following years game, and then let them stack up to a certain point or something. Or something like the season pass, only you get a X% discount on all DLCs/pack, rather than having to pay a lump sum. I'm probably off topic, but the whole issue of price is about as complicated, at least in my eyes, as the Games are Art debate. There's a billion ideas for/against pricing, but no one has the balls to lead their side to the realm of hope and change.

For anyone that ever complains that games are expensive just way a few months after release instead of pre-ordering the damn game. Suddenly it goes from 60$ to 15$.

Reading all the replies here I get the strong feeling we are comparing apples and oranges here. The author of the artice cleary drew his visions from the PC market whereas the commenters mostly base their reactions on consoles.

The big difference is, that on the PC there is no such thing as a monopoly. Sure, sometimes STEAM looks like one, but it isn't. There's Origin, Amazon and Uplay from the big boys and lots of smaller reselleres who sell fully legal and functional keys for STEAM etc. In the last 4 years I didn't buy a single game at full price during release, I paid something around 30-40 bucks and if you wait for 3-5 months you see AAA titles for below 25 (happend with Bioshock Infinte and Tomb Raider recently). So yeah, you lose the right to resell, but you pay prices you would hardly reach even if you resold almost instantly and can replay the gamestheoretically infinte.

If you ask me, the big consoles as we know them (Sony, Microsoft) will soon die out, because the ease of use is going away, the hardware per dollar advantage earlier generations had over the PC is decreasing, meanwhile PC gaming is getting easier by the day. Sure you'll still have easy to use, preconfigured plattforms but they won't be as limited. Classic example: Why can't you use Mouse and Keyboard with a console. Don't get me wrong, I know many don't even want it, but the Option wouldn't hurt anyone (Multiplayer could have seperate lobbies).

I think the author is on to something, you simply shouldn't make the mistake to assume that all the big players from today will still be big in 10 years. Many other industries made that mistake, let's not make it again.

Everything always focuses on economics these days, and that really makes me sad.

Copyright, in it's earliest incarnations had built into it notions that giving people an economic incentive to release their work to the public was for the greater good. Not just the enrichment of the individual, but the enrichment of society as a whole.
This is also why there was a fundamental understanding that works would become public domain at some point.

This was in fact the whole point. - The granting of short-term monopoly rights as compensation, but with the understanding that what you were ultimately doing was giving your work to society at large.

Anyway, killing used sales destroys much of this.
Because now, the only value something has is that which it can be sold for.
And if it can't be sold, it's worthless, and will be lost for all eternity?

A while ago someone argued that maybe some things aren't worth saving, and thus we shouldn't worry about all kinds of legal and technical restrictions on the ability to copy things. And perhaps that is true in a sense. But leaving this up to the copyright holders is pretty dubious.

Shakespeare doesn't survive into the modern era because of it's Author, or even the early publishers.

It survives because people found it valuable enough to look after certain copies of it. (Or even make more copies, whether allowed to do so or not.)

Economic concerns run counter to this.
And we run the risk of losing a whole heap of things because their creators saw no value in them other than the money they made, and no-one else was allowed to copy them... So as soon as they stopped making money, they were lost.

And before you say that won't happen... It has already. - Many early filmed works are gone now, through a combination of the fact that they were created originally by people only interested in money, laws, and the fragility of celluloid film...

But hey, all that matters is money, right?
That's what seems to be shouted at me from every angle these days.

Economy! Money! Finance! Profits...!

Nothing which does not make a profit has any value, or any right to be looked after... What a horrible situation we've created here with the worship of profit above all else...

grumpymooselion:
Prices tend to be specific to a particular format, those 75 dollar games were typically cartridge games which were just more expensive, overall, than a game off a floppy disc or CD ever was.

That's a big point actually, that's easy to overlook.
The 'manufacturing' cost for a single copy digital download is for all intents and purposes $0
For a CD/DVD/Blu-ray based game the disk costs about $0.10 (cases and manuals increase the cost a little.)
For an old-style cartridge based game, the cartridge alone can cost anything from about $12-35 in and of itself.

If you take that into consideration... disk based games are pretty expensive by comparison. (Since the cost of the storage media is lower, a larger proportion of the cost must, logically be the game itself.)

PoolCleaningRobot:

I would rather pay more for physical content that doesn't need to be stored on a hard drive and can be passed around with ease than pay less for a convenient but ultimately limited format.

A critique of the "we're all going to go digital" is the current limitations of the Internet. Things change fast. Only 10 years ago, cable Internet was not available in my area, I had dial-up and used "Netzero" to get my email and not much else. Now I have two wireless routers at either end of my house and can watch HD Netflix on a number of devices simultaneously. I hears a lot of Asia is skipping the wired infrastructure and going straight to wireless. Imagine the possibility: 10 years from now, rather than spotty 4G, there's 10G everywhere, and it is as fast as today's cable modems with no caps. I think it can happen.

And, I'm not worried about storage space. My first 486SX25 had a 200 Meg hard drive. I thought that was all the room in the world. Today we realize that is 1/3 a blank CD. 3.5" Hard Drives are up to 3 TB now: http://www.newegg.com/Product/Product.aspx?Item=N82E16822149396

Convenience? Nothing scratches my itch for instant gratification than checking my email and seeing I can download a game that cost $60 6 months ago for $10 now. If you didn't buy it then, it is new to you.

And, I'm not worried about sharing. Just Cause 2 selling for $2.99 at Steam? Let my friends buy their own copy. Or, wait for me to download it at their home and they can try it on my account.

Consoles will follow. It'll be hard. Developers hated 720p. Development doubled from what it was producing 480i games. But there is big money out there and more competition than ever before.

My biggest fear with consoles: they are proprietary. If I buy the Xbone, I can only get games they offer, which may be $100 a piece. I've already invested a ton in the system. I have to buy games on their terms. Today, they will allow for used games. Tomorrow, a mere download update can wipe out that ability.

I still love console gaming too. I'm going to risk it with one or two of them (maybe an Xbone in one room, PS4 in another.) But I think we consumers are all going to love the competition bringing better, less expensive games to us.

Sorry, it's all about cutting out the middleman.

In order for Microsoft to sell a game at $60, it actually has to sell it to a distributor for *pulls numbers from the air* $30, who then sells it to a retail store for $45, who then sells it to the customer for $60.

Microsoft then looks at that and says, "Why can't we get the whole $60? Let's just do a direct download service to not only save on DVD printing and packaging costs, but we also don't have to have any middlemen getting a share - we'll charge the regular price, $60, and almost double the money we pull in for each game."

That's what they've wanted to do for years. That's what the push is going to be for, so why would they lower prices in that instance? Since when has a corporation ever turned down possible profits because it's making too much money? The whole purpose of a corporation's existence is to make as much money a possible for shareholders. If they are willing to ruin millions of families by sending jobs overseas because they can pay their workers a tenth of what they have to pay their unionized workers, what in the world makes anyone think that just because their costs go down that their prices will go down, too?

Production budgets need to fall. It's that simple. We need more mid-range risk-taking games to revitalize the mainstream top-end industry. We live in a world where a 5 or even 1 game can make millions on mobile devices or make profits even just on the PC.

It's all about scaling your production to your market. Digital Dist is another big factor.

BloodSquirrel:
So many problems here...

Consumers demand more substance from the newest games, but aren't willing to pay more for the base product.

Substance is not what we're getting from all of that extra money being spent. What we're getting is "cinematic" gameplay, which is the reliance on scripted sequences, voice acting, motion capture, and constant cutscenes over substantive mechanics and gameplay.

Baldur's Gate had more substance than a dozen Call of Dutys and cost far, far less to make.

For example, it's assumed that when you buy a brand new car, you will be able to recoup some of that money later when you sell it used, unless you're the type to buy a new car and then drive it until it melts into a pile of rusty goo. Because of that understanding, the dealership is able to charge you more without ripping you off. Well, they probably still rip you off, but you get what I mean. A used game is an asset the same as a used car.

Car dealerships aren't charging people any extra because of the car's resale value. Prices in a competitive market are driven lower until the point where the profits being made by the competitors is no longer enticing enough to bring new competitors to the market, and where the existing competitors start valuing profit margins per sale over trying to grab more market share.

So think about it this way: If you didn't care about keeping a collection and had the spare time, you could easily play brand new games for a fraction of the cost. Buy it new for $60, sell it used for $30 in a couple weeks. Even Gamestop will pay you that much, or more, soon after release, and they once offered me a quarter for the one sports game I ever bought. As the "new" price of the game goes down, so does the proportional "used" price, because the used amount is always included in the price. There's an assumed value that's getting tacked on.

Again, that's not how pricing works at all. Publishers seek to place themselves on the most advantageous spot on the demand curve, where the increased margin for raising the price no longer offsets the decreased number of sales, and the increased number of sales would no longer offset the decrease in margins for lowering the price. How used game sales interact with that demand curve is far more complex than you seem to understand.

Having used copies for sale puts new copies into competition with them. The higher the industry prices its games, the more likely people are to go for used for a discount, and the more likely they are to re-sell them in order to recoup costs. People who are willing to pay $60 for a game but who buy used because they value the extra $5 they save over having a new copy would be forced to buy new if used game sales went away.

Meanwhile, used games existing isn't holding publishers back from lowering prices to try to increase volume. Used game sales are limited by two things- availability of used copies, and people's desire to simply have a new copy. Reducing new prices would decrease used prices, therefore allowing people who weren't buying at the higher price to absorb the stock of used games. People who buy new would but didn't want to buy at the higher price will now buy at the lower price.

Used games affect the publisher's current chosen spot on the demand curve in both negative and positive ways. You can't just subtract the resale value from the price of a new game, call it the new spot on the curve, and have any idea what you're talking about.

So we have no more used games, and the prices go down. What if we go all digital? Well, we can look at the PC market to see that this has already resulted in huge price cuts. Without boxes and shipping, publishers have the freedom to cut out a lot of the middleman costs and provide the savings to you. Obviously, Steam represents the epitome of the "I'll just buy this because it's so cheap, even though I'll never play it" style of marketing. But we are starting to see the fruition of new download services like Gamefly and Origin, whose competition will further reduce prices. Since you can't really resell digital games, the resale value is also eliminated from the price

Low prices on Steam are the result of something called "Price Discrimination". Publishers want to sell each copy of their game for the highest price that each buyer is willing to pay. Since they can't read minds, they resort to lowering prices as the game gets older. People who really wanted the game buy when the game is released, since they're willing to pay $60. People who don't care much about the game wait until it's $5 on Steam. There's a good reason they're not starting off at $5- they'd be leaving too much money on the table, and wouldn't be making enough revenue to keep the lights on.

The important thing here is that there's nothing stopping digital versions from being sold for $5 while boxed copies are still on the shelf selling for $30. Retail can only go so low, but its existence -along with the existence of used games that come along with it- aren't holding back publishers from going to those prices for digital. In fact, they make it easier- since some people value box copies, it's a perfect discriminator to get some people to pay $30 for a game while others are only paying $5.

Eliminating boxed copies would only hamper publishers' ability to engage in price discrimination, therefore lessening the chance you'll see a game for sale for $5 on Steam nearly as fast.

Sorry to quote a long post, but all of this is important, and shows a much more accurate understanding of prices than the article. 'resale value' isn't something with production costs that firms need to recoup. New prices are pushed up by resale because consumers value it. Prices of items without resale possibility aren't lower because they somehow cost less to make. Even if they did cost less to make, that wouldn't lower the price naturally unless we were talking about a perfectly competitive market with many firms and undifferentiated products, which video games very much aren't. No, if items without resale value are priced lower, it's only because consumers aren't willing to pay as much for them.

And when you get down to it, that's what sets the prices of games. What consumers are willing to pay. With real income significantly down over the last few decades, and with a new generation entering adulthood pre-saddled with crippling debt and paying dozens of 'reasonable' monthly service bills that their parents never saw further weighing on their already depressed salaries, the amount of games they're going to be willing to buy, and the amount they're going to be willing to pay for them, will only go down.

That's the driving force that will keep the cost of games in check, and the bloated, stagnant, inefficient, and unwieldy triple A publishing and development industry is going to need to adapt to it or they're going to fail.

There are a lot of people who have this weird leap of logic that says 'all businesses are trying to make money, therefore every decision made by a business is the correct decision that will make the most money', as though corporate behemoths are inherently omniscient. They're not. Publishers losing money on games that sell well due to insanely overinflated budgets, Microsoft getting smacked down by consumers furious over anti-consumer policies, these aren't cases of the market failing or of consumers failing. These are cases of firms ignoring reality, ignoring their consumers, over-reaching, and getting smacked down hard. It's the market working as it should.

Sorry, this got kinda long and I didn't want to clog the thread. I hope I didn't come off as too ranty

TLRD: I think disks/physical media is about as close to drm-free as we can get (barring GoG)

Calling gamers spoiled simply because the metric shifted is kind of ridiculous. It's also ridiculous to straight up assume that inflation is the be-all of monetary metrics. Adjusted for inflation, the standard minimum wage job is several dollars an hour less than when Street Fighter 2 dropped and costs for things needed to, you know, live have gone up. Further, with high-paying jobs going overseas, the media age for minimum wage jobs is rising. It will be in the thirties soon, if it isn't already.

Games will get cheaper. In a vacuum. Congratulations, you've said something completely useless. But this is a thing, a pervasive theme in gaming culture right now. Why? We seem to, as a whole, enjoy making excuses for gaming. It's also more simple to compare one number.

Kids these days are spoiled because games are cheaper if you take out factors other than inflation.
Americans are spoiled because games are ostensibly cheaper than other industrial nations, despite it taking more man-hours (in most cases, I don't know about every)

And we tend to use outliers to justify it, making the disparity more ridiculous.

I think console gamers are just plain getting screwed by needing to own a physical copy of the game. As a gamer, I want lots and lots of games, and with Steam I can have lots of affordable games. Console gamers are currently not enjoying that luxury all because they feel they need a physical disk to own or trade. Game stores usually give terrible trade-in values for used games.
It reminds me of these guys who have huge collections of movies on DVD. What for? Most movies are crap that you only want to see once, aren't they? Nobody is impressed by your collection of bad movies, trust me. Want lots and lots of cheap games? Get a PC and a Steam account and stop playing that $60 game over and over on your console.

BloodSquirrel:

Welp, after reading I was about to point out every single fallacy / downright inaccuracy in this article, but it seems you've got that covered - and pretty much everyone else already pointed out that raw inflation is much less important than % of disposable income.

Wow. Apparently this blew up a little bit. So much that I'm compelled to respond one more time. Yay!

I really, really think a lot of people saw the title and just decided to comment without reading. Because some of you are arguing the same things as me and then saying that I missed something. For example:

Sorry to quote a long post, but all of this is important, and shows a much more accurate understanding of prices than the article. 'resale value' isn't something with production costs that firms need to recoup. New prices are pushed up by resale because consumers value it. Prices of items without resale possibility aren't lower because they somehow cost less to make. Even if they did cost less to make, that wouldn't lower the price naturally unless we were talking about a perfectly competitive market with many firms and undifferentiated products, which video games very much aren't. No, if items without resale value are priced lower, it's only because consumers aren't willing to pay as much for them.

And when you get down to it, that's what sets the prices of games. What consumers are willing to pay. With real income significantly down over the last few decades, and with a new generation entering adulthood pre-saddled with crippling debt and paying dozens of 'reasonable' monthly service bills that their parents never saw further weighing on their already depressed salaries, the amount of games they're going to be willing to buy, and the amount they're going to be willing to pay for them, will only go down.

That's the driving force that will keep the cost of games in check, and the bloated, stagnant, inefficient, and unwieldy triple A publishing and development industry is going to need to adapt to it or they're going to fail.

Um. This is LITERALLY MY POINT. Of course Microsoft isn't sitting around a table saying "Gee, we should really pass some savings onto the consumer. We're so nice. Big Hugs all around!" It all has to do with what people are willing to pay. The "resale value" of an object is not a literal amount tacked on, it simply means that if we couldn't sell things to other people we wouldn't be willing to pay as much for them. As someone above said, would you care that you couldn't share a Steam copy of Just Cause 2 if it only cost $2.99? My entire conclusion is that devs and pubs need to adapt to this and take advantage of the changing market.

Again, I'm the consumer here, saying, "well game companies are probably going to try to screw us out of controlling our content even more than they already are, but at least it looks like cheaper technology and competition are gonna keep prices down. Hold on one second, let me just rent a song on iTunes's almost-monopolistic service that I love so much for it's convenience. OPPAN GANGNAM STYLE!"

BloodSquirrel:
[quote="Chris Rio" post="6.824073.19963364"]
A quick google search (I know, research is hard, but it helps not make an ass out of yourself sometimes) reveals that:

C'mon man, disagree if you want but name calling isn't necessary. And "hard research" is not a quick Google search I'm afraid.

Chris Rio:

C'mon man, disagree if you want but name calling isn't necessary. And "hard research" is not a quick Google search I'm afraid.

Well how about you go do some "hard research" (A phrase I didn't even use) and come up with some numbers that support your point, then? There are more authoritative sources out there than Wikipedia, but it still beats the pants off of "I just sort of assumed this was true".

The big problem with the assumption that games will get cheaper if they are all digital is that publishers want to charge more than they currently do, now with steam you do have a large amount of competition even though it does own most of the marketshare. Even on steam we see games that keep their launch price for way too long, I'm looking at you cod series. When origin launched it was much more expensive than steam for games and only because of pressure from steam did they finally cut prices and start doing some kind of sales on games. On a console you have a closed market space so publishers have complete control over price points and they can artificially keep prices high since there is no worry about self space for the games anymore. I'll bet the original reason that games got cheap wasn't because of age, it was because retailers needed to cycle inventory and older games were just taking up space.

Well written.
Well written, but completely wrong.
There's really not that much to say that other people haven't already, but I'll just add this.

Video games aren't expensive because of the used market, the cost of making games, the alignment of the planets or any other buzzwords the publishers might throw out to smokescreen themselves. Video games are expensive because they know we'll pay it.

Prices won't magically drop because we give corporations a 100% monopoly. In fact, they'll most likely increase them, because they'll then have no competition whatsoever and may charge whatever they please. This is what a monopoly DOES, and why it's illegal.

If you really think that microsoft and their new VCR has our best interests in mind, heck, if you think they care about anything aside from their profit margin, then I'm not really sure whether to call you idealistic or naive.

Vivi22:

Owyn_Merrilin:
Thank you. I couldn't even get past the first page of this article, because the old "games are cheap because inflation hurr durr" BS really pisses me off. Not only are individual copies cheaper to make than they were back then by an order of magnitude, not only are more people buying than ever before -- also by an order of magnitude -- but wages are down compared to inflation. $60 today may buy a smaller amount of goods than it did 20 years ago, but it also accounts for /more/ of an average person's money. We're in the middle of a recession (really it's a depression but nobody is willing to admit it), these aren't the boom years of the 90's anymore.

Thank you and every other person who pointed out that comparing prices based on inflation alone is only telling the smallest fraction of a story in which the customer isn't really better off at all. Hell, considering the fact that wages alone have stagnated in the last 10+ years, games costing $15 less when adjusted for inflation is not some massive, miraculous dip in prices. Most of us aren't making the same amount that people were 20 years ago.

This article is kind of a rehash of older arguments that have been thrashed to death multiple times. Really, the future is going to be determined by how successful kick starter and independent "big budget" games compete with the major publishers.

Sure the cost of living has gone up for the bare essentials but that doesn't totally excuse the fact that CONSOLE games are cheaper than 15-20 years ago.

In an ideal world games would be priced accordingly so that quality games can be charged more than normal mediocre games. However the world isn't perfect, most customers couldn't tell real quality even if it smacked them in the mouth and even then there are different things that ppl see as quality. Most ppl judge a game by how sparkly the eye candy is and how many hours it takes for a single playthrough. A much small number of gamer like me judge quality in a different way, the core gameplay, controls, level design and balancing of any score systems.

Imo I don't think we will ever get away from current pricing trends, ie the most popular games can get away with charging the most even if it's just a slight tweak on a yearly release or a MP game that's just a few arenas. On the otherhand we have retro styled games where most gamers feel ripped of with a AAA $60 2D platformer like Rayman Origins and instead are fine with a $10 indie game that does much the same things but not as well. Or there's savy gamers who know that any niche boxed game will be in the bargain bucket a month later so why pay $60 at launch.

Faced with such a market it is little wonder why so many AAA and mid tier game studios have closed shop this past few years. In that light I don't blame devs and publishers for putting in hidden charges into the games like DLC, passes, skinner boxes etc to con gamers into paying extra.

Maybe the answer for some niche games is to copy what Altus does, small print runs of premium priced games that are unlikely to become bargain bin fodder but rather collectors items. Maybe then devs can start to put abit of quality back into their games.

I don't agree that digital games will make games cheaper. Yes it works on the PC because you have options where you can go to buy games. If a console becomes digital only you now have a monopoly and you start alienating some of your customers. But hey the publisher, developers, and the console makers get more of the pie and everyone else gets shafted. But then again a soul may be found within these people. Sooo....give it a shot, I may be a customer after you prove to me that your looking out for your customers.

There is a basic fundamental error in your logic. What governs selling price is supply and demand.

Take out the used market and suddenly you've got less supply, and more demand. Any first year economics student can tell you straight away what will happen - the price will go up.

This did not occur in the PC market because Steam is not the only online shop where you can buy games. At the same time Steam was setting up, there was still a vibrant disk-based market, and other people were setting up digital store-fronts with the same idea, effectively increasing supply.

With consoles, each one will be tied to one store-front, which means that each one will effectively have a captive audience. The cut costs involved in digital distribution won't translate into lower prices, because cost of sales does not in fact govern the final price of a product except so far as setting a basic minimum.

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