Video Games and Pricing - A Pixelated View

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Jul
13

Video Games and Pricing

While price elasticity is prevalent with many smaller independently developed and published video games, many of the larger AAA studios have set the price point at $60 for their games. This is a lot of money to spend on a single video game and that does not include the additional downloadable content that can make the total up to $80 or higher.

So what’s the reason behind the $60 pricing model? It’s not the budgets that some of these games command. A game like 2011’s Star Wars: The Old Republic reportedly had a budget of $200 million, while other titles like Heavy Rain cost $40 million. Both titles did indeed cost a lot of money but one spent a fraction compared to the other. Both ultimately cost $60 at launch. Is it used games that add to how expensive these games are? Game publishers like to blame used game sales for the high prices of games at launch. This may be a valid argument, but a counter-argument could be made that gamers would buy new if new weren’t so expensive in the first place. Another counter-argument is that publishers need to cut cost production instead of cutting consumers rights. No matter how you look at it; these prices may seem to be too high for cash-strapped consumers, so should they be lowered?

Personally, I see an elastic pricing model as a better alternate than what is currently being used. There are many video games that are enjoyable to play but with a lower launch price, it may entice people to make that purchase instead of buying the game at an even lower price or buying it used; the latter will result in the game publishers receiving no money at all from their game, since used sales don’t give any money back to the game companies. A typical game that’s dusted off in five hours should not be priced the same as one that offers hundreds of hours of content. I would go as far as saying that games like Skyrim should be about $70 where other games should be in a $20 to $30 price range. Games like Beyond: Two Souls or Dead Space 3 do not warrant the $60 price tag.

At the very least the digital versions of games should be at a lower starting price. There is no physical disc, no need to ship it to stores, and there is no worry about used games sale when a gamers buys digital. This could even be a good selling point for Sony or Microsoft. If either company decided to sell their digital versions of all their games, or at least their exclusives, at lower prices, it may entice a gamer to choice their next gen system over the competitor. If Gears of War: Judgment or Beyond: Two Souls were sold at cheaper prices digitally on their own consoles, it may help Sony and Microsoft push console gamers toward more digital purchases.

Ultimately,  the majority of video games simply do not live up to the $60 price tag the pricing of games need to change. even good games that are very entertaining and have some replay value should be launched at lower prices. Sony and Microsoft should at least start with lower prices for downloadable games and see where it goes from there. I can only see that have a better “bang for your buck” strategy will only help game sales, not hurt them.

m4s0n501
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About Jose Aranda