Over the last 20 years or so, not accounting for inflation, video game pricing has been fairly static. The average pricing hovering around the $50 range for most of that 20 years, and only a few years ago climbing to $60. Of course this small price jump was met with extreme resentment, even though it was more than justified. For those unfamiliar with the price jump, it was Sony and, at the time, Microsoft that caused it. The reason for doing it was the cost of the new HD formats during the HD War, Blu-ray and HD-DVD. Interesting enough, however, is that if you take into account inflation the cost for the consumer has gone down over the years.
So what is the problem? Cost of development and consumer demand, it has sky rocketed. We as consumers are demanding more, and more of everything. Visuals, sound, length, story, all of it, we want more. Yet we as the consumer are not willing to truly pay for it, we have become spoiled brats of the Pricing Teet. I know it hurts, but it is true. We completely ignore the fact that development cost has risen astronomically, to meet our demands. Just 12 years ago the average cost of video game development was between $1 million and $4 million, taking a rise in 2006 to over $5 million, and as of 2010 approximately $20 million. All the while retail pricing has remained fairly static. Here we are in 2012 and the average is even higher, Triple A titles into the hundreds of millions. To put that into perspective over just the last 12 years the average cost of development has increased by as much as 2000%, and we as the consumer are fine with that. Yet when the industry increased our cost by a mere 20%, we nearly revolted.
As it sits the current model isn't sustainable, and we are seeing this. We are seeing studios closing down or merging for profitability reasons. The industry is changing, and not for the better. With the current structure there are only a few possible outcomes, none of which we will enjoy. One outcome would be the merging of studios, beyond what we currently see, until only a very small number remain. This would stifle growth and creativity, and further stagnant the industry. The others being a drop in quality of the actual video games, to reduce development cost, or a steep drop in the number of games we see and how often. Don't like that? Well then you are going to have to let go of the Pricing Teet!
In order for us, the consumer, to sustain our nearly insatiable appetite for all things Video Games we need to start paying for it. If we don't want to see the other previously mentioned events take place, we need to step up to the plate and knock it out of the park. How? Speak with our wallet, not by withholding our money, but by giving more! Yes, I said it, give them more money for the product!
I know, that last bit might have caused some of you to pass out, run in terror, or even have a stroke. But really, would it be so bad to actually pay for what we are getting? Think about it, in 2011 the average cost of a ticket to the movies was $7.89 in the USA, average movie run-time is somewhere between one and a half and two hours. So let's look at the two hour long film average, compared to cost that works out to be $3.94 per hour. This doesn't include your popcorn, candy, soda, just the movie. Now let's look at a video game, this one is a bit tricky because everyone is different. We don't all play the same games or for the same period of time. As an experienced gamer I would say that 50 hours is a fairly low total play time for a Triple A title. Using the $60 average with 50 hours of play time we have a total of $1.20 per hour. Comparing the two the movie ticket is about 328% more expensive per hour than the video game.
So what is the problem? Why can't we as consumers accept the fact that we get to enjoy about the cheapest form of entertainment? There is a problem, it needs to be fixed! Costs are sky rocketing for the developer, our demands as the consumer are sky rocketing, we either need to start paying for it, or stop making the demands. The industry won't survive under the current model.
For those of you still with me you might be saying "Well if the developer sells several million copies at $60 each, they get their money back." That would be true if that is how it works, but it doesn't work that way. You see that $60 is split among several groups. You have the developer, the publisher, the cost to manufacture the physical disks or deliver the digital content version. Then you finally have the cut the actual retail establishment gets out of it! In the end roughly $25 of each copy sold makes it back to the developer and to cover their costs to develop the game. Surprised? Yup, most people are when they learn that!
So what is going to happen? Well as I see it we end up with just a couple of giant companies that control the industry, which we won't like. Or we as the consumer accept the fact we are extremely fortunate to have such a cheap source of entertainment, and for our own sake actually start paying for it.