Games Should Not Cost $60 Anymore – Inflation, Microtransactions, and Publishing – Extra Credits

Why are all of these $60 games trying to sell me loot boxes? Why are all these $60 games selling me season passes for their DLC? Why are all of these $60 games including microtransactions? Why are all of these $60 games trying to sell me DLC on day one? There are many variations, but the fundamental question being asked is the same: Why are they trying to make me pay more than $60 for this game? Today, we are going to answer that question AAA games should not cost $60 anymore

And I'm going to spend the rest of this video explaining why The price for a AAA game was set at $60 right around the launch of HD consoles: The Xbox 360 and the PS3 That was around 2005 and the price hasn't shifted again since But the value of the US

Dollar certainly has The rate of inflation over the last decade has averaged out to roughly 2% per year According to the best figures I can find, that means that the value of goods has inflated 2534% since we started selling games for $60 And let's just round that down to a flat 25% to keep the math simple

So due to inflation alone, AAA games should be selling for $75 right now But obviously, inflation isn't the only factor in play here AAA games are all competing to have the best looking game on the market And that graphical arms race gets way more expensive with each new console generation And, sure, we have found a lot of clever efficiencies along the way to reduce costs

I mean, heck, we treat third-party game engines like middleware now, and that saves tons But even with those savings, I would estimate that AAA games cost somewhere between three and four times as much to make as they did back in 2005 So does that mean games should actually be costing somewhere between $225 and $300? Fortunately, no Things aren't quite that dire It's pretty hard to pin down exact numbers on this, but the game playing audience is a lot bigger than it was in 2005, too Like, several times bigger And that means that there's a lot more customers to sell to, which helps to make up for that higher production cost

And can result In even bigger profits, IF you manage to make a huge hit Unfortunately, when you're counting on that higher number of sales to make a profit, if your game flops Well, you're gonna be losing an impossibly large, possibly studio-sinking amount of money

But, since we're just focusing on what the average retail price of a game should be, let's just ignore that increased risk factor for now Based on what we've seen firsthand working in this industry (much of which is under NDA, unfortunately)

if I had to make a gut estimate – and understand this really is just a rough guess I would say that the actual retail price of a modern AAA game, without any additional ongoing revenue sources to support itshould probably be as high as $85 to $90 new Now, understandably, that number freaks the industry out Who outside of Australia is gonna pay $90 for a video game? I mean, we all saw what happened to the Neo Geo And this fear has been compounded by the success of the mobile game market

which has sort of trained consumers to think that games should be astonishingly cheap I mean, for a tablet game, $10 is considered expensive Even if that same game would cost $30 on the DS or $40 on Steam For that matter, Steam Sales have been training us to expect cheaper games, too And so the industry has kept that $60 price right where it is

And, I mean, maybe they're right to do so A lot of people got pretty bent out of shape when the price got bumped up to $60 back in 2005 And there is something about the number 70 that just feels like [breathes in sharply] Yikes, that's a lot of money Industry wisdom really may be right here Maybe raising that standard price any higher than $60 WOULD lead to a drop in sales But! By not raising prices, we've sort of put ourselves in a tough spot If we are gonna cover our development costs, reduce the risk of catastrophic losses

and show our shareholders the return percentages they're expecting, we've gotta do something to increase revenue And we've tried to do that in a lot of different ways, to varying degrees of success First, we tried increasing revenue by selling DLC But fans got upset if we sold that DLC at launch, and they didn't buy it if we released the DLC later Next, we tried designing games to be perpetual experiences

Games that you would play all year long, Because then, we could sell map packs and expansions over that game's longer lifespan But supporting those games long-term turned out to be pretty expensive too, and it didn't really work for every kind of game Besides, players can only actively keep up with so many perpetual games at once So, all of those perpetual games have to compete for attention and the audience just gets locked down It's like the MMORPG flood all over again

And so, now we are trying the next thing: loot boxes We'll come back to the specific topic of loot boxes in a couple of weeks, but this is basically where we're at And now, we as an audience have to decide what we want Are we okay with paying more for these games at retail? $70? $80? Maybe even more? The data suggests that the answer is no, but if that's the case Well, we're gonna have to learn to live with loot boxes or microtransactions or whatever other model the industry attempts next And by learn to live with, I don't mean put up with predatory crap I mean, we're gonna have to find a way to reward developers for making good supplementary income systemsthat aren't overly aggressive or in any way required to play competitively

Monetization systems that leave you satisfied and actually increase your enjoyment of the game you're spending dozens of hours on Even if you choose to spend very little But make no mistake: those really are our only two options right now

Because, like I said at the beginning: AAA games just should not cost $60 anymore See you next week!