Why Games Will Only Get Cheaper

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Personally I don't see how some of the used markets listed as examples are comparable. In the game industry a used game can show up on the shelves within days of a new release, and then competes directly against the new release copy where there is no discernible difference between the quality of the two, for only a few dollars less. This is the business model Gamestop has shifted to over the last 5-10 years.

With vehicles, the new car dealership isn't really competing with the old car dealership. Automobile manufactures really have a sweet setup going on for them in society, as a car is typically seen as a 'status symbol' in our society. If people can afford it they'll buy a new car, used cars are for those that can't, and I really doubt a persons thought process is "I'm paying $20,000 now, but in 5 years I'll be able to recoup $2,000 when I sell my car." With gamers its a matter of weeks/months when you recoup your loss, car ownership it's years. Also when someone buys a used car it's going to come with a greater risk of breaking down and requiring some work, which means the mechanic will probably be ordering parts from the manufacturer so they're still making money off of it. So do they really take resale value into account when selling you a car? With so much real competition it seems like something that would get weeded out.

Also music, I don't think anyone's going to care about being able to resell a single song. It works on iTunes because you're starting with something that's such low value.

Anyways, it's pretty obvious why video game prices have come down. If I make a game that costs $1,000,000 and will sell 100,000 copies, then make a game that costs $100,000,000 but will sell 10,000,000 copies, sell them at $50 each and you've made the same amount of money. Video games are software, and with software the vast majority of the costs goes into R&D and marketing, the actual physical copy you produce probably costs pennies. It's all about how much you're going to sell, and the video game industry has grown a lot over the years. Also factoring into the costs they probably saved a ton switching from cartridges to discs, those old cartridges probably did cost a few bucks to make back in the day.

So the real question for today is, has video game sales/growth stagnated? Development costs have gone up, but if people aren't buying more you have to either raise prices, cut your budget, or take a loss. And no one wants to be the first to raise prices. But then again, if it all goes digital I doubt anyone will want to be the first to lower prices as well. Much easier to say "game development cost has skyrocketed, we need the extra savings from cutting out the middle man to stay in business and continue making AAA games". Now I'm totally onboard with Steam, but don't forget that Steam is a privately held company. Gabe Newell can do whatever the **** he wants and doesn't have to answer to anybody, so if he believes in passing the cost savings onto the consumer then we when. All the other big publishers and console makers we're looking at are usually publicly held corporations, meaning they need to answer to their shareholders and shareholders always want the immediate profits. They're only going to do what Steam does if it makes them more money, and someones going to have one hell of a time trying to convince them that it does... and maybe they'd be right it doesn't.

I am curious as to what country the author lives in where a purely digital distribution is a viable option, because it's certainly not Australia, New Zealand, England, Mexico or most of South America.

Chris Rio:
Why Games Will Only Get Cheaper

Do you remember how much games used to cost? No? Well, they're only getting cheaper.

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I had to stop reading right here, "Imagine if the first-sale doctrine didn't exist, like if reselling any of your possessions was illegal. Wouldn't things be cheaper? We pay up front for the right to resell our stuff, in a way. It's like a refundable tax. When you count something as an asset, it's because you know that at any time you can exchange that thing for money."

To quote you in reply to you, "my na´ve little flower" the object of business is to maximize profit by minimizing cost. If you remove the resaleability of any product you create a monopoly. They can then charge anything they want for it. Let's assume for this thought scenario however that the publishers are benevolent. They will keep the same price because there is no reason to drop it and pocket the extra money. It is the same principle as manufacturing companies firing human workers to mechanize the production process. They save money by not having to worry about insurance, retirement, HRO complaints, strikes, human error, ect. The only two costs picked up are initial purchasing cost and maintenance (you could argue a nominal increase in utilities as well if you really wanted to). Yet I don't see those saving trickling down to the consumer. This is the side of "trickle-down" economies that simply does not work.

there are actually a few problems here.

The first and most glaring is that I see no real reason why any publisher or dev would lower the cost to remove the "built in trade in value" if used games were eliminated from the equation. After all we are basically being under charged for the games ( no argument there at all, we are paying half cost from the 1980s factoring in inflation easily) so really once we get used to paying a certain price, it...will...not...drop...period. Best case scenario here is to get a temporary stay on the prices in exchange for losing a fundamental consumer right.

Secondly,it's really easy to extol the virtues of a fully digital version of this media working to cloud based systems but right now and maybe forever it's stupid. Two reasons for this. One, not every market has access to broadband and the argument could be made that T-1 or better would be needed to make this truly fly. I can't get t-1 here and will be shocked if it become available in my lifetime and I see server stutters as it is on my current speed. So keep cloud gaming out of this until a proper broadband becomes fully widespread.

The second issue with cloud gaming is that it is a hacker's wet dream. The less physical control you have over your property and information the easier it is to exploit. I'm not ready for that yet as there are too many security outfits who brag about their "impenetrable security" only to get a lot of egg on their face when a proper hacker shows them how stupid they are.

Bottom line prices don't go down in this brave new world, we will pay one way or another more and more. The changes will come but don't try to bullshit me about the outcomes. It makes you look stupid to lie out your ass in trying to do so.

jklinders:
After all we are basically being under charged for the games ( no argument there at all, we are paying half cost from the 1980s factoring in inflation easily)

And what has happened to our buying power in the same time?

Spoiler: it hasn't risen with inflation.

In a vacuum, there's no economic contest. In reality, inflation isn't much of an excuse.

Sarge034:
This is the side of "trickle-down" economies that simply does not work.

Unless you count the rich pissing on us. >.>

"Trickle-down" economics works as intended, though: it's a philosophy designed to market rich people to poor people.

Zachary Amaranth:

jklinders:
After all we are basically being under charged for the games ( no argument there at all, we are paying half cost from the 1980s factoring in inflation easily)

And what has happened to our buying power in the same time?

Spoiler: it hasn't risen with inflation.

In a vacuum, there's no economic contest. In reality, inflation isn't much of an excuse.

Irrelevant. the hobby is cheaper now than it ever was. I can get a gaming machine for less money than was possible in the 80s. That is not adjusted for inflation that is dollar for fucking dollar. Buying power is lower but that is due to everything else going up at the rate of inflation.

And about talking about facts in a vacuum, it is more expensive by leaps and bounds to make a game than ever and cheaper in real money to buy them than ever. You are not making any sense.

Gaming has gotten cheaper over time. You fail at math, history and economics combined. Good show.

I really dislike this article because it makes assumptions that simply are not true the first being that there is a built in your going to resell this "tax" in products. Sorry but that simple is not true. Products are sold for absolutely as much money as the seller thinks they can get for it. Executives do not sit around in meets going "Man I really just want to sell this game for 30 dollars but we have account for the probability that it will be resold. Unfortunately we HAVE to add another 30 on to it to recoup sales." As long as people are buying games for 60 dollars publishers will sell them for 60. It is extremely foolish to assume that any company is willing going pass up profit because it suddenly costs less to make something. Companies are out to make money not be altruistic, if they don't have to drop prices they won't.

Also, music didn't become cheaper because digital suddenly made it less expensive to produce. Music became cheaper because digital made it easier to file share and customers who were feed up with extremely overpriced Albums, stopped buying music all together. Have people already forgotten about Napster? The music industry panicked crapped themselves started suing tons of people, then realized that it needed to changed.

Second Steam games are not cheaper overall. Day one and for quite some time afterwards they sell for the same price as other PC games. Yes, Steam has great sales but that does not equate to a across the broad drop in game prices.

Edit: subscription services for games are probably not the way of the future. You only need to look to MMO to realized that trend is dead in the water.

This article seems highly naive to me. We only have to look at things like Origin to see that even when a publisher has less costs involved, they don't reduce the price, even when they have competition like Steam, they don't reduce the price. They're greedy, and I don't think that will change until we see some major shifts in attitude.

People have already pointed out that Steam takes it out of the publishers hands so that isn't a valid argument, but Origin? EA owns and runs that, so it's a prime example of how lower production cost doesn't equate to lower prices.

EDIT: Also saying that's it's cheaper now than the 1980s, isn't saying much. It was a brand new medium then with a small market, they needed to charge more to recoup their loses. Now? Not so much, the prices have stabilized because the market has increased dramatically, gaming is now almost on par with television. Hell, they've been relatively stable since the PS1 era.

Games cannot get more expensive thats for sure. Aside from the very rich and privileged few people could afford to spend more than $60 for a single game, not including DLC and whatnot. Not to mention that digital distribution cuts out a lot of the costs with selling physical copies (materials, labor, shipping, etc.) so there is no excuse for them to be have the same price.

If "AAA" games decide they want to charge even more then I'll just look elsewhere for my entertainment. I enjoy videogames but I enjoy having food and a roof over my head more...

Chris Rio:
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!"

Is that really your point? I felt like I was reading three separate articles with no logic connecting them. The first one claiming that publishers are undercharging us because of inflation, with no mention of the lack of comparative growth in wages for most Western nations. The second one claiming that games are artificially priced high because of the included resale value provisioned in the first sale doctrine, and arguing that getting rid of resale value through digital distribution would automatically make the base price cheaper (which is just plain ridiculous, if you look at the launch prices of games on Steam and Origin). The third claiming that the consumer will ultimately accept any move to digital or subscription based rentals because the low cost and convenience makes them ignore any restrictions and loss of ownership - a point that sits in blissful defiance of reality when considering the massive backlash against the Xbone's DRM.

This overall discussion of how gaming will get cheaper ignores the white elephant in the room, which is the ridiculous cost of AAA gaming. Gaming is already cheaper if you know where to look. While most mobile games are absolute crap, those few gems that are well made are usually only a few dollars. Indie games retail for around ten bucks. Yet no one ever looks at this and realises that consumers are willing to forgo graphical quality for a more focused experience. The AAA development studios have been caught in this bubble whereby they have picked a style of development that lends itself well to marketing but leaves little more than a shell of a game to play, with expensive development costs that need to be recouped at launch. It's a bubble that needs to be burst soon, but most of these massive organisations are controlled by marketing executives rather than gamers, so they can't see the problem.

Overall I'm not sure what to take away from your article. I don't think anyone here is disputing that digital is inevitable. You say that the first sale is representative of a price point that consumers are willing to pay for being able to trade away their game, but that ignores what the costs of development are. You can't compare iTunes to Steam because a Florence and the Machine album doesn't debut at $60 and then eventually move back down to $30 - not to mention that Apple has some bogus regional pricing despite having eliminated first sale doctrine. Really, the only way games will get cheaper than they already are will be if publishers lower the bar for development. This is exactly the point the chap you quoted made, so I think you should consult the dictionary for the meaning of 'literally'.

Lightknight:
My only dissent here is that current network infrastructure does not allow rapid installs of games and the actual size of video games are skyrocketing to multiple tens of GBs per game (Uncharted 3 was 40GB and that's on a current gen console). Steam is seriously helping this with a persistent library that allows uninstalling and reinstalling but the fact remains that US internet speeds are too slow and foreign data caps are too low to make this kind of thing viable or convenient. It will be and on that day I'll be cool with it. Until then, this is significantly less convenient for me than driving to a store, buying a disk, driving back, and slapping it into the system to play.

a thing of note here, as you siad, is that US internet speeds are to slow. the rest of the world can already handle these internet installs. and as soon as US decide to catch up. we wont have to worry about internet indrastructure failing.

Norithics:
I really don't like it when people insist that game creators have to do X or Y because "consumers demand it." As somebody who creates things, I can tell you from experience that to remain successful, you've got to give people what they want. Not what they think they want.

Hence why you sohuld never lsiten to forum whiners when designing something. I think the "i'd rather ahve my players annoyed than bored" applies here very well. most people dont really know what they will like from a next game, because they haven though about it. though there is one thing i think i want, and i really do, but our technology is like 100 years till that becomes even a possibility.

P.S. can we cut the crap about our wages being lower than 20 years ago and still being in crysis? because neither of those are true.

Zachary Amaranth:

Unless you count the rich pissing on us. >.>

"Trickle-down" economics works as intended, though: it's a philosophy designed to market rich people to poor people.

I would disagree. The business cost cutting side of "trickle-down" economics fails miserably because there is no reason for the company to lower costs when they can simply pocket the extra earnings. I believe the individual side of "trickle-down" economics can be quite effective if implemented smartly. Think of a "stimulus package" type idea that was implemented at the correct time. You can't wait too late into the game to use this or people will simply save that money incase things get even worse. The idea is to provide capital to the market that will actually be circulated. However, this is one of those things that works well in theory, but in practice will probably always come a little too late. There are some other things you can do as well, but the same time sensitivity applies.

That's less 'trickle down', and more 'rising tide' - an economic philosophy that recognizes that the poor & middle class by necessity spend more and save less than the rich, so giving money to the poor & middle class will spur more activity and fluidity in the markets than giving money to the rich. Corporations and their wealthy owners, shareholders, and executives will still end up with the money in the end, but they'll have to actually make something or provide a service in order to get it, instead of it going straight into their pockets.

It's a philosophy I share. Tax incentives, grants, and the like can make hiring cheap as they want, but if the consumer base doesn't have any disposable income, then a firm still isn't going to hire anybody, because they wouldn't be able to make any more money with the extra productivity those new hires might provide.

You know what grinds my gears? Microsoft (and other people) trying to sell me a digital game at double the boxed price. If they did the right thing and made the digital games cheaper then the boxed product then maybe it wouldn't be a bitch.

Simcity 5 with their always online DRM and one use code (no reselling) was selling for full price. HOW DOES THAT WORK?!

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. ... (really it's a depression but nobody is willing to admit it), these aren't the boom years of the 90's anymore.

The whole inflation thing puzzled me to; Inflation is measured by tracking the cost of an index of goods/commodities. You can't just slap a number derived from tracking the price of a gallon of gasoline, a pound a bacon, gallon of milk, cup of sugar, etc. and say it applies to video games and video games are therefore cheap.

The reality is that wages have remained stagnant over the past 20+ years; so the average person would work the same amount of hours to buy a 60$ video game in 1993 as they do in 2013.

Yes because less content that's more simplified and broken up into DLC which costs more than ever is somehow better for us all.....

Owyn_Merrilin:

BigTuk:
Actually you made a fundamental error in your comparison: Sonic 2 may have cost $75 but keep in mind Sonic 2 was a cartridge with integrated memory, and stuff that actually had a an assemble process and shipping of said packaged unit was naturally more expensive. As opposed to say these days where at best games are stamped onto $1 discs. and charged $60.

Games will get cheaper when people stop buying games for $60 or $50 nuff said. What about development costs? what about them. See this is the downside of upping technology. The more high end the console the more specialized labour you need and the more time you need to pay the specialized labour for.

Covarr:
The growing popularity of middleware engines has also helped keep development costs in check, but not enough to compensate for other skyrocketing costs involved in game development.

More and more I think indie devs are going to force big gaming's hand. Games like Super Meat Boy and Minecraft were made on astonishingly low budgets, and yet still manage to make far more money than high-budget games like Tomb Raider, which sold amazingly and still lost money. I think devs are pretty much going to have to start doing two things:

This is true, and keep in mind, there's also the ressurgence of older titles for earlier eras. GoG has mad an impressive business model based on giving people access to bygone classics. Gaming options are widening.

So much goes into things like environments and assets, and I'm sure this could be made more efficient. It baffles me that developers are hardly looking into ways to more quickly and cheaply create assets. Black mesa had a really nifty Face Creation System which "allows there to be a wide variety of faces with very little work but high visual fidelity." It saved the developers a significant amount of time, and is exactly the sort of tool bigger companies should be looking into making in order to keep development costs from ballooning out of control. The fact of the matter is, so much of the cost of AAA games comes not from the amount of content, but the inefficiency with which that content was made.

Actually that's not as easy as you'd think. See assets aren't always portable between engines and it's not feasible to base all your games on the same engine. There is actually a lot of efficiency but a lot of the time is literally in the polish required. In short, making HD games with motion capture animation and realistic face bump shaders you amd scatter diffuse lighting reqauires money. More or less each feature/layer of tech requires at least 1 extra person and another set of billable man hours.

This is why games are big on DLC these days since it allows thm to scrape cash and reuse the same assets they used in the original.

STill it boils down to. The companies will charge as much as they think they can get away with. if people buy games for $60 on launch day they have no reason to sell in for $40 on launch day. Do they?

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.

And you know what? Game budgets are low for what they are. An average blockbuster movie costs between 2 and 4 times what an /expensive/ AAA game costs. Yet they make their money back and then some on much smaller increments of cash, because they're priced low enough that pretty much anyone can afford to buy a DVD or go to the movies. That's how games should be. People occasionally try to excuse it by saying they're a luxury product, but we're not talking a caviar and champagne luxury, we're talking beer and pretzels.

If the rumors are true (and most likely they are), Bioshock Infinite had a total budget just north of $300 million. The same as Avengers. The production costs alone of games have skyrocketed over the last seven years. I still remember people losing their shit at the idea of the first Gears of War having a production cost $10 million.

Oh, and games aren't cheap because of inflation. They're cheap because to stay viable, companies should be charging closer to $100 per unit given their budgets, team sizes, and actual consumer base.

spoonybard.hahs:

Owyn_Merrilin:

BigTuk:
Actually you made a fundamental error in your comparison: Sonic 2 may have cost $75 but keep in mind Sonic 2 was a cartridge with integrated memory, and stuff that actually had a an assemble process and shipping of said packaged unit was naturally more expensive. As opposed to say these days where at best games are stamped onto $1 discs. and charged $60.

Games will get cheaper when people stop buying games for $60 or $50 nuff said. What about development costs? what about them. See this is the downside of upping technology. The more high end the console the more specialized labour you need and the more time you need to pay the specialized labour for.

This is true, and keep in mind, there's also the ressurgence of older titles for earlier eras. GoG has mad an impressive business model based on giving people access to bygone classics. Gaming options are widening.

Actually that's not as easy as you'd think. See assets aren't always portable between engines and it's not feasible to base all your games on the same engine. There is actually a lot of efficiency but a lot of the time is literally in the polish required. In short, making HD games with motion capture animation and realistic face bump shaders you amd scatter diffuse lighting reqauires money. More or less each feature/layer of tech requires at least 1 extra person and another set of billable man hours.

This is why games are big on DLC these days since it allows thm to scrape cash and reuse the same assets they used in the original.

STill it boils down to. The companies will charge as much as they think they can get away with. if people buy games for $60 on launch day they have no reason to sell in for $40 on launch day. Do they?

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.

And you know what? Game budgets are low for what they are. An average blockbuster movie costs between 2 and 4 times what an /expensive/ AAA game costs. Yet they make their money back and then some on much smaller increments of cash, because they're priced low enough that pretty much anyone can afford to buy a DVD or go to the movies. That's how games should be. People occasionally try to excuse it by saying they're a luxury product, but we're not talking a caviar and champagne luxury, we're talking beer and pretzels.

If the rumors are true (and most likely they are), Bioshock Infinite had a total budget just north of $300 million. The same as Avengers. The production costs alone of games have skyrocketed over the last seven years. I still remember people losing their shit at the idea of the first Gears of War having a production cost $10 million.

Oh, and games aren't cheap because of inflation. They're cheap because to stay viable, companies should be charging closer to $100 per unit given their budgets, team sizes, and actual consumer base.

Yet The Avengers made money hand over fist at $10-$15 a pop. Your logic is flawed, it's totally missing out on the economy of scale. And besides, there's no way Bioshock Infinite actually cost that much. If anything they dropped $50-$100 million on the actual game, and the rest was the marketing budget. If you want to see an out of control cost in the videogame industry, there's your bugbear.

Edit: Yeah, look at this: http://www.destructoid.com/ken-levine-denies-200-million-bioshock-infinite-budget-249339.phtml

Levine was shocked people thought the game had a budget as high as $200 million, $300 million would have had him rolling on the floor with laughter.

Also, who the heck was shocked by Gears of War having a $10 million budget? That was pretty common during the PS2 generation, and it wasn't too crazy during the PS1 generation. Final Fantasy VII cost about $30 million to make, and that came out in 1997. It was exceptionally expensive at the time, but there's some proof that Gears wasn't breaking any new ground if it really did have a $10 million budget.

Owyn_Merrilin:

spoonybard.hahs:

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.

And you know what? Game budgets are low for what they are. An average blockbuster movie costs between 2 and 4 times what an /expensive/ AAA game costs. Yet they make their money back and then some on much smaller increments of cash, because they're priced low enough that pretty much anyone can afford to buy a DVD or go to the movies. That's how games should be. People occasionally try to excuse it by saying they're a luxury product, but we're not talking a caviar and champagne luxury, we're talking beer and pretzels.

If the rumors are true (and most likely they are), Bioshock Infinite had a total budget just north of $300 million. The same as Avengers. The production costs alone of games have skyrocketed over the last seven years. I still remember people losing their shit at the idea of the first Gears of War having a production cost $10 million.

Oh, and games aren't cheap because of inflation. They're cheap because to stay viable, companies should be charging closer to $100 per unit given their budgets, team sizes, and actual consumer base.

Yet The Avengers made money hand over fist at $10-$15 a pop. Your logic is flawed, it's totally missing out on the economy of scale. And besides, there's no way Bioshock Infinite actually cost that much. If anything they dropped $50-$100 million on the actual game, and the rest was the marketing budget. If you want to see an out of control cost in the videogame industry, there's your bugbear.

Edit: Yeah, look at this: http://www.destructoid.com/ken-levine-denies-200-million-bioshock-infinite-budget-249339.phtml

Levine was shocked people thought the game had a budget as high as $200 million, $300 million would have had him rolling on the floor with laughter.

Also, who the heck was shocked by Gears of War having a $10 million budget? That was pretty common during the PS2 generation, and it wasn't too crazy during the PS1 generation. Final Fantasy VII cost about $30 million to make, and that came out in 1997. It was exceptionally expensive at the time, but there's some proof that Gears wasn't breaking any new ground if it really did have a $10 million budget.

I have to retract my statement about Bioshock. The way people kept throwing around the original NY Times article, it suggested the production budget was $200 million, not the now standard $100 million. My $300 million estimate was based on that incorrect assumption and adding on $100 million for marketing. You are correct, marketing is a huge driving force behind the rising costs of video games. But that's not the picture the industry is painting (read: they are blaming gamers because we apparently expect too much). However, actual production costs are rising. It might be conservative, or it might be mindbogglingly insane. We will probably never know, since the industry has a policy of lying to the press and public.

Yet, you cannot deny that there is wasteful spending going on when developers pay an outside company to design an engine just for the main character's hair physics.

spoonybard.hahs:

Owyn_Merrilin:

spoonybard.hahs:

If the rumors are true (and most likely they are), Bioshock Infinite had a total budget just north of $300 million. The same as Avengers. The production costs alone of games have skyrocketed over the last seven years. I still remember people losing their shit at the idea of the first Gears of War having a production cost $10 million.

Oh, and games aren't cheap because of inflation. They're cheap because to stay viable, companies should be charging closer to $100 per unit given their budgets, team sizes, and actual consumer base.

Yet The Avengers made money hand over fist at $10-$15 a pop. Your logic is flawed, it's totally missing out on the economy of scale. And besides, there's no way Bioshock Infinite actually cost that much. If anything they dropped $50-$100 million on the actual game, and the rest was the marketing budget. If you want to see an out of control cost in the videogame industry, there's your bugbear.

Edit: Yeah, look at this: http://www.destructoid.com/ken-levine-denies-200-million-bioshock-infinite-budget-249339.phtml

Levine was shocked people thought the game had a budget as high as $200 million, $300 million would have had him rolling on the floor with laughter.

Also, who the heck was shocked by Gears of War having a $10 million budget? That was pretty common during the PS2 generation, and it wasn't too crazy during the PS1 generation. Final Fantasy VII cost about $30 million to make, and that came out in 1997. It was exceptionally expensive at the time, but there's some proof that Gears wasn't breaking any new ground if it really did have a $10 million budget.

I have to retract my statement about Bioshock. The way people kept throwing around the original NY Times article, it suggested the production budget was $200 million, not the now standard $100 million. My $300 million estimate was based on that incorrect assumption and adding on $100 million for marketing. You are correct, marketing is a huge driving force behind the rising costs of video games. But that's not the picture the industry is painting (read: they are blaming gamers because we apparently expect too much). However, actual production costs are rising. It might be conservative, or it might be mindbogglingly insane. We will probably never know, since the industry has a policy of lying to the press and public.

Yet, you cannot deny that there is wasteful spending going on when developers pay an outside company to design an engine just for the main character's hair physics.

Wasteful spending or not, it's not the consumer's job to care. Economics 101, you either find a price that enough people are willing to pay that you make a profit, or you go under. $60 a pop is driving a /lot/ of people away, and with the economy the way it is, it's getting less viable by the day. Actually /raising/ the prices would be suicide, especially since we all know that wouldn't mean paid DLC would go away. The real cost of a game is already over $100 if you pay full price for everything.

Owyn_Merrilin:

spoonybard.hahs:

Owyn_Merrilin:

Yet The Avengers made money hand over fist at $10-$15 a pop. Your logic is flawed, it's totally missing out on the economy of scale. And besides, there's no way Bioshock Infinite actually cost that much. If anything they dropped $50-$100 million on the actual game, and the rest was the marketing budget. If you want to see an out of control cost in the videogame industry, there's your bugbear.

Edit: Yeah, look at this: http://www.destructoid.com/ken-levine-denies-200-million-bioshock-infinite-budget-249339.phtml

Levine was shocked people thought the game had a budget as high as $200 million, $300 million would have had him rolling on the floor with laughter.

Also, who the heck was shocked by Gears of War having a $10 million budget? That was pretty common during the PS2 generation, and it wasn't too crazy during the PS1 generation. Final Fantasy VII cost about $30 million to make, and that came out in 1997. It was exceptionally expensive at the time, but there's some proof that Gears wasn't breaking any new ground if it really did have a $10 million budget.

I have to retract my statement about Bioshock. The way people kept throwing around the original NY Times article, it suggested the production budget was $200 million, not the now standard $100 million. My $300 million estimate was based on that incorrect assumption and adding on $100 million for marketing. You are correct, marketing is a huge driving force behind the rising costs of video games. But that's not the picture the industry is painting (read: they are blaming gamers because we apparently expect too much). However, actual production costs are rising. It might be conservative, or it might be mindbogglingly insane. We will probably never know, since the industry has a policy of lying to the press and public.

Yet, you cannot deny that there is wasteful spending going on when developers pay an outside company to design an engine just for the main character's hair physics.

Wasteful spending or not, it's not the consumer's job to care. Economics 101, you either find a price that enough people are willing to pay that you make a profit, or you go under. $60 a pop is driving a /lot/ of people away, and with the economy the way it is, it's getting less viable by the day. Actually /raising/ the prices would be suicide, especially since we all know that wouldn't mean paid DLC would go away. The real cost of a game is already over $100 if you pay full price for everything.

Yes games are effectively $100 (or more) if you get the game and the Season Pass/DLC. The hilarious thing is, publishers are doing it because it is making them money. Yet, that $60 or $100 price point isn't driving away as many people as you would think (hope, really). Especially when you consider that many publishers aim for the lowest common denominator of gamers, the Dude-Bro Douche Bag. Who either have something of a disposable income or like to sacrifice monetary stability for the Hot New Thing.

And this idea of "it's not the consumer's job to care" is why companies are getting away with shrink-raying product across the board, while simultaneously raising prices.

spoonybard.hahs:

Owyn_Merrilin:

spoonybard.hahs:

I have to retract my statement about Bioshock. The way people kept throwing around the original NY Times article, it suggested the production budget was $200 million, not the now standard $100 million. My $300 million estimate was based on that incorrect assumption and adding on $100 million for marketing. You are correct, marketing is a huge driving force behind the rising costs of video games. But that's not the picture the industry is painting (read: they are blaming gamers because we apparently expect too much). However, actual production costs are rising. It might be conservative, or it might be mindbogglingly insane. We will probably never know, since the industry has a policy of lying to the press and public.

Yet, you cannot deny that there is wasteful spending going on when developers pay an outside company to design an engine just for the main character's hair physics.

Wasteful spending or not, it's not the consumer's job to care. Economics 101, you either find a price that enough people are willing to pay that you make a profit, or you go under. $60 a pop is driving a /lot/ of people away, and with the economy the way it is, it's getting less viable by the day. Actually /raising/ the prices would be suicide, especially since we all know that wouldn't mean paid DLC would go away. The real cost of a game is already over $100 if you pay full price for everything.

Yes games are effectively $100 (or more) if you get the game and the Season Pass/DLC. The hilarious thing is, publishers are doing it because it is making them money. Yet, that $60 or $100 price point isn't driving away as many people as you would think (hope, really). Especially when you consider that many publishers aim for the lowest common denominator of gamers, the Dude-Bro Douche Bag. Who either have something of a disposable income or like to sacrifice monetary stability for the Hot New Thing.

And this idea of "it's not the consumer's job to care" is why companies are getting away with shrink-raying product across the board, while simultaneously raising prices.

The question is, though, for how much longer can they sustain those profits? The marketing budgets have gotten so far out of control that selling 5 million copies is now considered a failure on major titles. Which would make a certain amount of sense in most industries, but then most industries don't charge $60 for a base unit with a good $40 worth of "optional" extras that aren't really optional. Something's gotta give, at some point in the near future. Because there aren't enough people willing to buy these titles at that price point for them to make the kind of sales figures they supposedly need.

jklinders:

Irrelevant. the hobby is cheaper now than it ever was.

That in itself is irrelevant if the purchasing power isn't there. In fact, "cheaper" is completely useless if not weighed to actual factors.

And about talking about facts in a vacuum, it is more expensive by leaps and bounds to make a game than ever and cheaper in real money to buy them than ever.

Gaming reaches millions upon millions and is featuring nearly exponential growth. Since you're so interested in facts. Hmmmm....

You are not making any sense.

You're just not putting thought into it.

Purchasing power is as important as inflation when factoring cost. Making excuses for the supply side (false ones, I might add) is not. Good try, though.

Sarge034:

I would disagree. The business cost cutting side of "trickle-down" economics fails miserably because there is no reason for the company to lower costs when they can simply pocket the extra earnings. I believe the individual side of "trickle-down" economics can be quite effective if implemented smartly. Think of a "stimulus package" type idea that was implemented at the correct time. You can't wait too late into the game to use this or people will simply save that money incase things get even worse. The idea is to provide capital to the market that will actually be circulated. However, this is one of those things that works well in theory, but in practice will probably always come a little too late. There are some other things you can do as well, but the same time sensitivity applies.

Yes, but that's still assuming it's an honest marketing theory and not a marketing campaign, which is the opposite of what I said.

You're explaining stuff that has nothing to do with my comment.

Zachary Amaranth:

jklinders:

Irrelevant. the hobby is cheaper now than it ever was.

That in itself is irrelevant if the purchasing power isn't there. In fact, "cheaper" is completely useless if not weighed to actual factors.

And about talking about facts in a vacuum, it is more expensive by leaps and bounds to make a game than ever and cheaper in real money to buy them than ever.

Gaming reaches millions upon millions and is featuring nearly exponential growth. Since you're so interested in facts. Hmmmm....

You are not making any sense.

You're just not putting thought into it.

Purchasing power is as important as inflation when factoring cost. Making excuses for the supply side (false ones, I might add) is not. Good try, though.

*sigh*

If you want to think that there is somehow injustice in how a a non essential to life luxury item is priced then you are free to do so. i'll live on just fine if I can't afford to buy a new game. Who am I to judge if there are some people who feel they can't.

It's cheaper in real world and dollar for dollar terms than ever and you are whining about nothing. Experience some actual poverty before you rail about social injustice kike I have seen you doing on these pages.

jklinders:

If you want to think that there is somehow injustice in how a a non essential to life luxury item is priced then you are free to do so. i'll live on just fine if I can't afford to buy a new game.

Oh wow, you can't rebut the actual arguments, so you resort to mocking a strawman. Who are you trying to fool?

Covarr:
The growing popularity of middleware engines has also helped keep development costs in check, but not enough to compensate for other skyrocketing costs involved in game development.

More and more I think indie devs are going to force big gaming's hand. Games like Super Meat Boy and Minecraft were made on astonishingly low budgets, and yet still manage to make far more money than high-budget games like Tomb Raider, which sold amazingly and still lost money. I think devs are pretty much going to have to start doing two things:

1. Scaling back their games to save money
2. Finding ways to make the most of the money they do spend

So much goes into things like environments and assets, and I'm sure this could be made more efficient. It baffles me that developers are hardly looking into ways to more quickly and cheaply create assets. Black mesa had a really nifty Face Creation System which "allows there to be a wide variety of faces with very little work but high visual fidelity." It saved the developers a significant amount of time, and is exactly the sort of tool bigger companies should be looking into making in order to keep development costs from ballooning out of control. The fact of the matter is, so much of the cost of AAA games comes not from the amount of content, but the inefficiency with which that content was made.

P.S. Thanks

sure they can scale back the cost of games development.

but when your triming 50% off of a 20 milion dollar development budget, while your still spending in excess of 100 million for US marketing alone, your wasting your time

Zachary Amaranth:

jklinders:

If you want to think that there is somehow injustice in how a a non essential to life luxury item is priced then you are free to do so. i'll live on just fine if I can't afford to buy a new game.

Oh wow, you can't rebut the actual arguments, so you resort to mocking a strawman. Who are you trying to fool?

Still waiting for you to rebut mine...which you have not.

There was no strawman. You are railing about some injustice in pricing of a luxury good. What's next, crying about the price of gold? Now THAT was a strawman for your edification.

Let me put this in terms even a child can understand before I put your profile on my ignore list. In stark contrast to every other consumer good known to man in history prices of video games have remained stagnant for nearly 30 years. They only recently started moving upward in the last maybe 5 years but have not covered even one tenth the ground they have lost to inflation. The prices have stayed still because until recently...oh maybe 5 years ago the market was growing. Now that the market has stopped growing have wages stopped growing? License fees? Electricity? Coffee? If you can't reach a wider audience and your costs keep growing guess what? You have 2 choices. Raise your prices or die.

Profit is not a dirty word. It is long past time the spoiled overgrown children who pass as the gaming community came to terms with that.

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.

This is incorrect. Retail PC games are almost always the same price or cheaper than Steam. And Amazon physical retail copies are even cheaper.

The reason people make mistakes like this is because PC games don't have to pay Microsoft or Sony a cut and pass that profit along. But if you compare physical to digital products instead of closed platform to steam there's no real evidence that the cost savings of digital games are being passed on

Zachary Amaranth:

Yes, but that's still assuming it's an honest marketing theory and not a marketing campaign, which is the opposite of what I said.

You're explaining stuff that has nothing to do with my comment.

Your comment was...

Zachary Amaranth:

Unless you count the rich pissing on us. >.>

"Trickle-down" economics works as intended, though: it's a philosophy designed to market rich people to poor people.

I then stated my position as being opposite of yours and elaborated on the details. So please, do tell me how I'm explaining stuff that has nothing to do with your comment. Unless, of course, I didn't just fall in line with your line of thought and that is what you are taking offense with.

Sarge034:

I then stated my position as being opposite of yours and elaborated on the details.

You really did a terrible job, then. Not only did I not really see any point of real disagreement (since the two aren't exactly on the same wavelength), you still haven't explained HOW it's pertinent.

Zachary Amaranth:
You really did a terrible job, then. Not only did I not really see any point of real disagreement (since the two aren't exactly on the same wavelength), you still haven't explained HOW it's pertinent.

You do try so hard to be argumentative in all of your posts. It's cute.

You said "trickle-down" economics was just a philosophy to market rich people to poor people. I disagreed saying that particular elements of it could work as intended to help money circulate through the economy if it was implemented properly and timely.

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