Zapped Out: The Cost of Video Games


Recently I went to EB Games to see what was out and upcoming in the video game world. Batman: Arkham Knight, Call of Duty: Black Ops 3 and Rainbow Six Siege will all have us gaming fanatics on the edge of our seat very soon.

897595F5-CDBE-4BAD-B6CB-2FC13BB51FD9CEF23B88-92C8-4C6E-AC1E-CE4AE435453F

Image Credit: Adam Johnston

However, my mouth dropped. Not for the anticipation for these blockbusters. No, instead it was the prices which had me shaking my head. For example, it will take a small mortgage of $79.99 to buy Call of Duty Black Ops (which is due out in November, 2015) , $79.99 to get your kicks from FIFA 16 (will feature 12 national women’s teams and headed for a September, 2015 release), and $74.99 to get your hands on Rainbow Six Siege (coming out in October, 2015), all for Playstation 4, and Xbox One.

Many games still are $69.99 for these two systems. A few years ago new releases for when Playstation 3 and Xbox 360 were in its prime was around $59.99.

It comes down to three questions regarding video games pricing and costs related to consumers. What is pushing the costs of games up? Why is the price the way it is when you go to a video game store?  And are video games in general more expensive than in past years when factoring inflation and other factors?

First, let’s look at what’s pushing the costs up: Increased budgets. Video games today, are not like its 8-bit NES predecessors.  Technology today is far more effective and cheaper, helping push what gaming developers can do. Today’s video games resemble more like a big budget theatrical movie. It’s common for video games to have budgets of hundreds of millions of dollars today. This requires a lot more help to produce these games, including voice actors, and designers, The Economist noted:

As characters, items, levels and visual effects have become more intricate and detailed, developers have had little choice but to throw more and more artists at the problem. Another reason costs are rising is the increasing professionalism of the industry. These days, Hollywood actors are hired (and paid handsomely) to voice characters. The biggest developers market-test their products to destruction. Like political parties honing a slogan, they offer snippets of gameplay to focus groups. If anything is found to be too difficult, too obscure or simply not fun, it is sent back to be re-done. That kind of quality control costs serious money.

Expect budgets of your favorite video games to increase as the current next generations systems are starting to gain market traction said The Economist. 

Now question two, who sets the price of a video game?  It’s not the store where you buy it, but the distributor, according to a CBC article. For example, Activision will set the price of Call of Duty: Black Ops 3, or EA Sports for FIFA 16 at $79.99 when it first comes out. Stores like Best Buy, EB Games do not have much of a say on pricing for when games first come out.

This is also created a debate on how much value gamers get in hours of play vs. the cost, which CBC argued about the short play time for The Order 1886 vs. its $74.99 price tag.  Expect this trend to continue as budgets rise and distributors need to maximize profits in order to costs.

Which leads me to question three. Are video games, in general, more expensive to buy now than in previous times?

The answer is muddled.

If you add inflation to this mix, according to IGN then no. For example, An NES game twenty-five years would cost you $50, would be $89.00 now. An NES system, which cost $199.99 in 1985, is around $434.69 in today’s cost.

Meanwhile, a Playstation 2 (PS2) game in 2000 at $60.00 a pop would set you back about the same now. A PS2 system in 2000 which was $299.99 is $407.44 now. Very little increase with inflation factored in.

In fact, Forbes technology columnist Erik Kain argued video game prices should cost more, thanks to massive budgets, and more realistic gameplay. He argues today’s gamers are getting a bargain, in compared to other times in history when inflation is added.

However, his argument is kind of flawed considering when you factor Moore’s Law, where exponential technologies have improved all aspects of technology, driving cost down. Does anyone recall laptops in 2000 being $2,000? Now you can get a laptop for around $300-$400.00.  You can argue this for video games which have brought technology costs down for this industry, and cancelling Kain’s ideas of increasing gaming prices.

Add constant bombardment of downloadable content (around $20.00 to $35.00), Internet costs ($65.00 a month for high-speed Internet with a local provider), yearly online fees ($49.99 for Playstation Plus) and headphones ($150.00 for high quality ones) to get the most interactive movie-like experience, and it’s not as cheap as you think.

Lastly, stagnant wages, plus a low Canadian dollar, stifles consumer purchasing power. Consumer may likely not want to spend on games, as they feel the pinch with increased prices. Hence, why it’s unclear as to why it’s cheaper to buy video games than in the past. Ironically, this may not deter millennials (one of the video game industries top demographics), as they are willing to spend more on entertainment, despite not having the wealth of past generations.

PS4-Console-wDS4

Image Credit: “PS4-Console-wDS4” by Evan-Amos – Media:PS4-Console- via Wikimedia

Let me know what your thoughts are. You can find me on Facebook, Twitter, or Google+