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After decades of growing development costs and not a single change to video game pricing, next-gen games’ prices are changing to $69.99.
After decades of growing development costs and not a single change to video game pricing, next-gen games’ prices are changing to $69.99.
2020 marks the rebirth of $70 video games, bringing an end to 15 years of $60 standardized video game pricing.
The next-gen (current?) Xbox Series X and PlayStation 5, which both launched this week, brought around a return to the $70 video game, which realistically should have been the regular for the past couple of years.
The first indication of any major change came with NBA 2K21’s pricing scheme of $60 for current-gen consoles, but $70 for an upgrade to next-gen systems.
Following the NBA series’ decision to change games to $70, other game makers and developers followed, even with console manufacturer Sony bringing their pricing up to $70 for some PlayStation 5 launch games.
This $10 shift marks a surprisingly large shift in pricing for video games, and revenues from gaming in general. This change is incredible given the consistent $60 price tag for games over the past decade.
According to the research firm, NPD Group, “$69.99 may be the new standard pricing for next gen titles.”
Like stated, Sony’s decision to place some launch titles at $70 confirms that decision, mostly following higher developmental costs and more expensive creative processes.
“Our own Worldwide Studios titles will be priced from US$49.99 to US$69.99 on PS5,” said Sony Interactive Entertainment President and CEO Jim Ryan.
This marks the biggest industry change to video game pricing since Activision’s 15 year old Call of Duty retailed for $59.99. While that was considered a massive leap from the industry’s $49.99 standard, at a 20% markup, this extra 10% adds on quickly.
That 15 year old change occurred around the time of the transfer between PS2/Xbox to PS3/Xbox 360.
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That price change, combined with this year’s price change, follows recent publisher changes to create more revenue per user.
Like with the aforementioned Call of Duty series, publisher Activision has been making more changes to continuously profit from concurrent players.
Collector’s editions, season passes, in-game purchases, loot crates, boxes, whatever you call it, have been created to help make money of off determined players.
This big change has been pretty widely adopted by major game developers and franchises all over the world.
All of these changes are in response to more powerful technology, which also happens to be more expensive, as well as more expansive open worlds, which are notably more expensive than other types of games.
Development costs for developing a game, can alone, cost anywhere between $60 million to $300 million. These dev costs have been growing consistently since video games were invented.
$50-$60 games in the past, with inflation, would now cost almost $100 dollars, showing just how much this pricing technique has affected things.
While development costs have increased, game price tags haven’t, which has led to some significant struggle on developers and publishers.
While $100 for a game might not be socially acceptable (or financially acceptable), currently, a $10 price step realistically isn’t that big of a step compared to how much development has increased over time, in relation to how much game prices have increased.
SIE (Sony Interactive Entertainment), has a good explanation, which I feel really explains why many PS5 games will cost above $60, and why that’s representative of the gaming industry nowadays.
According to a report by Bloomberg, SIE has said pricing is “reflective of the growing development resources needed for these ambitious games.”
Take-Two follows a similar explanation, explaining “we (Take-Two) don’t have a pricing strategy. We charge much, much less than the value we deliver, that’s our pricing strategy, if we have one.”
Throughout whichever explanation, most developers and publishers agree with one thing:
Developing a game has become exponentially more expensive, and even with upping game prices, development costs make that price a value comparatively.
Companies can lose hundreds of millions if their game if priced too low, and have to then rely on intrusive in-game purchases and loot boxes to try to gain a profit from said game.
All in all, just think of the hundreds of millions going into development, and remember that your extra $10 help keep these companies in business and helps to push away from intrusive pricing and purchases.
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