After 15 Years, Retail Video Game Prices May Be Rising

Feature image by 2K.

Back in 2005, Microsoft, Sony, and other game developers collectively decided the new standard price for a video game would rise, from $49.99 to $59.99. For the past 15 years, retailers have avoided punching through that number, even as inflation reduced its value in absolute terms. Now, 2K has raised the price of its upcoming NBA 2K21 to $69.99 for the PlayStation 5 or Xbox Series X. If you want to buy the game for both platforms, it’ll cost $99.99 for the “Mamba Edition” to do so.

This could be an arguable positive. Adjusted for inflation, the price of a $59.99 game in 2005 should have risen to $77.84 already. A $69.99 price is only a $10 increase, and it’s unlikely to break the bank. It’s no accident that the long pause between price increases has coincided with the rise of alternative funding models, including crowdsourcing, increasing use of DLC, aggressive efforts to push customers towards pre-ordering, microtransactions, and loot crates. Gamers have not greeted all of these innovations with open arms. Game publishers have made some particularly egregious attempts to ring money out of the community like a dishrag. Raising the price of games by $10 could be a good thing if it led to fewer predatory tactics.

If history is any indication, we may be less likely to see these kinds of walk-backs than people might like. There’s no talk of reducing the use of microtransactions, while the release trailer for NBA 2K20 last year drew multiple unflattering comparisons to a casino or pachinko parlor for how heavily it marketed these mechanics.

There’s a tempting narrative here about greedy publishers and hapless developers trapped in months of crunch due to their leaders’ poor financial and game design decisions. But the situation is more complex than that. Game developer Ralph Koster, lead designer of Ultima Online and the creative director behind Star Wars Galaxies, has published multiple blog posts on the finances and challenges of building games. His website is an excellent resource — not many game development presentations from 2005 can claim to be great resources in 2020, but he’s got an online discussion of “Moore’s Wall” that I’d still recommend giving a look (mousing over the slides will display the talk transcript).

Graphic by Ralph Koster

On the subject of game development’s increasing expenses, he writes:

‘Too expensive’ isn’t a measure of just cost though, it’s a measure of risk. As costs have risen, we have seen massive consolidation across the industry… As costs have risen, third parties have either died when they overextended trying to reach the quality bar, or they were absorbed by the larger companies. Publishers overextended by banking on major franchises, and when one didn’t hit, went away.

This cycle tends to reset only when new technology platforms come along that don’t let you do expensive productions because they don’t have the graphics horsepower. Mobile was like that, so was Flash gaming. But as soon as you can overspend on graphics, it becomes mandatory, and then the spiral starts.

He dives into why microtransactions and similar content models exist, and how they interact with price thresholds and psychology. Put simply, cheap DLC, cosmetics, and the like offer content that’s inexpensive enough for people to want to buy it. Some games have adopted a free-to-play model in an effort to grow their user bases, while others, like NBA 2K21, combine microtransactions and a base $70 price. In both cases, though, the goal is the same: The developer is trying to nudge players into spending more money over time. In many cases, the reasons they’re chasing more revenue is that games-as-a-service incur ongoing costs and the price of building games and marketing them has been increasing every generation for decades.

A $69.99 price point for video games will recoup a little more revenue for developers and publishers, but according to the sources in the industry we’ve spoken with, DLC and microtransactions tend to be extremely profitable and critically important to the perpetually rising costs of game development. The advent of indie games may also make it easier for gamers to swallow the $10 price increase — there are now many, many titles available for prices ranging from $0 – $40, and it doesn’t long for new titles to go on sale. A game selling for $69.99 in January may well be on sale for $30 – $50 by the end of the year.

I don’t think gamers are going to go nuts over a $10 increase after a 15-year pause in game pricing. But I think the advent of more expensive games would go down better if people didn’t feel relentlessly nickel and dimed already.

Feature image by 2K.

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