PS5 games are $10 more expensive. Is that fair?
In 1992 when I was around 11 my mother paid £ 65 for Street Fighter 2 on the Super Nintendo.
65 pounds sterling. At today’s exchange rate, that’s about $ 85. However, in 1992 the rates were different. Back then, 65 pounds was almost closer 100 U.S. dollar.
My mom paid $ 100 for Street Fighter 2: World Warrior. But it’s getting worse.
From 1992 to 2020 the inflation rate was around 2.25% per year. So when you do the math, it gets even crazier. Adjusted for exchange rates, adjusted for inflation …
My mom paid $ 186 for Street Fighter 2 on the Super Nintendo.
Today Sony while revealing($ 499, or $ 399 for the Digital Edition) also showed that many next-generation video games are getting a price increase. Games like the upcoming Demon’s Souls, which were once $ 59.99, are now $ 69.99 . Some people don’t like that.
My first instinct when listening to the news was to remember my poor old mother who once paid $ 186 for a video game. With that in mind, it’s hard to complain about a $ 10 price hike. Maybe the bump was long overdue?
Over the past decade we’ve seen video games evolve dramatically. We saw the cost of production go up. We’ve seen studios and people come under the oppressive weight of fan and market expectations for big budget games like Destiny or. In 2020 like a video game Making Nintendo $ 100 million will require around 2 million units sold to break even.
Just to break even.
It’s obviously a lot more complicated. Development costs have increased, but in most cases production costs have decreased. One of the reasons Street Fighter 2 was so expensive in 1992 was the cost of the cartridges themselves. In 2020, the production and distribution of video games was streamlined significantly. The way we play (and pay) video games has changed dramatically. Despite inflation, we pay in many ways fewer for video games. In some cases we don’t pay anything at all.
Fourteen daysPerhaps the biggest game in the last five years is free and makes most of its money in microtransactions. Lots of games like Apex Legends and Call of Duty: Warzone, followed in those footsteps.
Add to mix services like Xbox Game Pass, which charges gamers a monthly Netlix-like fee to play an ever-growing catalog of video games that we previously paid full price for. If you were a Game Pass subscriber, you could have played a large budget AAA single player experience like Gears of War 5 essentially for free on launch day.
Now that consumers are set for these types of offerings, it might be difficult to put that genie back in the bottle. In the near future, will consumers be willing to pay not just full price but also full price plus an additional $ 10? That is hard to say. I suspect the answer is yes, but who the hell knows at this point.
The safest bet
A crucial factor is the transition to digital. The long-term battle between Sony and Microsoft to control video game sales from retailers like Gamestop began in the last generation but will intensify dramatically in the next.
This time around, with both the Xbox Series X and PS5, consumers have the option on day one: they can buy a version of the console that plays discs and continue to buy video games in stores like the “good old days” can buy a console, who plays digitally acquired games just.
What if you do that? You’re totally in the mood for what Microsoft and Sony ask for their video games. So far, major retailers have been aggressively scaling back new titles, especially in stores like Walmart, where video games act as loss makers for other products like toasters. When games are digitized, those hefty discounts stop.
And this future is as good as guaranteed. As of 2018, 87% of all game sales were made digitally. At best, disc-based consoles are a gesture for a sharply declining retail video game market.
However, regardless of their perceived similarities, Microsoft and Sony appear to have increasingly different goals. Sony is more traditional. It’s clearly about making money selling the games yourself. This video game price hike reflects that. Microsoft seems to be more forward-looking. It sees its future in the subscription model () and cloud gaming ( ).
The truth is that publishers have been experimenting with pricing for years. Many full price games still offer microtransactions on a regular basis. EA experimented with literal ads in its newest UFC game, a game that paid the most at the full price of $ 59.99. It’s hard to justify price increases when you’re milking the cow on both sides.
But the elephant in the room is COVID-19. We are in the middle of an epidemic and a global recession. Employment is starting to rise in the US, but as of August, over 10% of Americans were out of work. Barely the best time to consider a video game price hike – a pastime that has grown dramatically as folks at home are stuck in lockdown.
It is a contradiction that reflects the complexity of this topic. We’ve never been so desperate for video games, but there’s a chance we can’t afford to pay for it. We live in an economy where it makes sense to charge more for video games, but we’ve also spent the last decade giving them away for free.
The balls are in the air and there is no definite way of knowing where they will land.
The safest bet is this: the gaming industry has grown so big that it can support all kinds. The hardcore early adopters ready to play $ 69.99 for Demon’s Souls at launch; the teenagers for whom the PS5 will be nothing more than a glorified Fortnite machine; the casual gamers who spend years buying consoles and catching up with discounted games; The people who like to lock themselves into Microsoft’s subscription-based vision for the future.
There is room for all of us in the video game universe. Some of us are even willing to pay $ 186 for Street Fighter 2.