The market of video games has diversified over the last eight or so years. The days of only having AAA and AA games available are gone. Today, you can find games ranging from free, all the way up to $60 and more. The perception of value has shifted in all areas of the market, and consumers are looking at $60 games differently. With the recent trouble of No Man's Sky, it's time to look at what $60 is supposed to get you.
Premium Problems:
Thanks to game devaluation and the market opening up, the preconception of "shovelware" has changed. In the past, people expected that $20 and less games were inferior to the $40+, and they were right. Our options were either the AAA or AA market; anything else simply did not measure up.
As we have seen, things are different today. Game devaluation has caused a reversal of this trend. Today, many Indie developers are releasing amazing works at $20 or less. Not only that, but consumers are now expecting quality at any price point. Price is no longer a true signifier of game quality; making the game industry unique in this regard.
Consumer goods are measured by their supposed quality weighted by the market/sellers. When you shop at a Whole Foods or Wegmans, you are paying a higher premium for products that are supposed to be better. Same with restaurants; the steak you get at a five star restaurant should be a higher quality than a diner. Because of that difference, the consumer expects to pay more and get more in return.
However, we are seeing a completely different trend with video games. I can play a game free and get dozens of hours of entertainment; or I can play a $40 game for 8 to 12 hours. Throw in game sales and this becomes even more confusing.
I know people bought Doom for $60 at retail, I however spent $35, and the game was even discounted after that to $30.
We have one of the best games of 2016 discounted at 50% before 6 months have passed.
When you have an industry without any pricing measure of quality, it can lead to situations such as with No Man's Sky.
The Sky is Falling:
No Man's Sky was conceived as an indie game until it was picked up by Sony. After that, the game was given the full AAA treatment in terms of press and marketing. When the game was finally released, gamers were dismayed to find that the game was lacking in detail.
No Man's Sky simply wasn't worth the $60 price tag, and we talked about it recently how things could have gone differently if it was priced at $30. Spending $60 on a game is a big deal; that is currently the highest amount someone can charge for a non-special edition title.
When you're pricing your game at that level, people expect more, because they are paying more. We'll come back to talking about the "more" in a minute.
No Man's Sky was an attempt at releasing an Indie game at full retail, and we can agree that it definitely didn't work.
With that said, No Man's Sky's failure raises an important question: What games are worth $60?
Video Game Appraiser:
Trying to put a price tag on a video game has always been a tough job. Every video game is different: From design, philosophy, content and their team. This isn't like comparing apples to oranges, but selling every kind of fruit juice as apple juice.
The problem is that there is no standard for what constitutes the price of a game. Should we say that multiplayer adds $20 to the price tag? Is a singleplayer campaign worth $10? What about taking money off depending on the popularity or demand of the genre.
Imagine if we say that because there is a Call of Duty every year, every new FPS must have a $15 deduction on its price. Or better yet: Because main branch Mario games only happen every few years, they get a $20 price tag bump.
Everyone wants to get what their game is worth, but we have no way of deciding just what that "worth" is. Just as the lack of transparency can affect kickstarter projects, so can it affect what people think your game is worth.
There is one final topic left to talk about today and it's a big one: Why are game so expensive?
Lowering Cost:
I'll be dedicating a critical thought to this part, so I won't go into too much detail here. The short of it is that despite what publishers and developers tell you, the cost of making games should have gone down.
Digital distribution cuts back on manufacturing, shipping, and housing/displaying games. Game manuals have become lower quality to cut back on printing costs. Game engines have become easier to work with and less expensive to use.
In the old days, games were very expensive due to the costs surrounding them and the lack of games on the market. Logic should dictate the ugly truth to developers and publishers: Games are not worth $60 today. With games being released daily, scarcity is no longer a factor, and we already know that games should be cheaper to produce. Publishers will say that marketing is expensive, but that's not related to making a game.
I know what you're going to ask next: How much should games cost? I honestly have no idea. We once again return to the problem at hand: There are no defining measures of value to a video game.
With multiplayer for example, I've seen $60 games that are just singleplayer experiences and $10 or less with multiplayer modes.
Valuing Games:
The Game Industry is no longer the same place as it was 20 or even 10 years ago. You have teams of less than 10 people putting out quality games that can stand next to those put out by major studios. With the "race to the bottom" further impacting things, we're not done talking about this.
One thing is for sure, everyone needs to start getting on the same page, or we're going to see developers price themselves right out of the market.
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The rumor of Concord's budget was at $400M has been debunked by games media personnel, as the game didn't even get above-the-line marketing.
People will continue to make up absurd things about concord just like i predicted. I didn't believe that game costs anywhere close to half a billion dollars but people will continue to pile on because they were truly hurt by the production of this game that I thought was a good game. The developers had the audacity to make a good game semi-similar to other games with character models not seen before with gender pronouns.
Yep, but you had people believing that crap. I mean, websites ran that. I don't think they believed it themselves, but the urge of Concord, bait and traffic seemed too good to pass up.
Doesn’t seem like a debunk to me. Chris Dring, a known sony fanboy gave his opinion.
His opinion is also incorrect - plenty of games cost more $400m or more.
Yes, we should believe some anon user instead of the EIC of a respected financial gaming publication. LOL!
Films like Avatar cost 300 million
This is a game with 12 small levels and 16 characters
No way their small cut scenes added 300 mill to the price .
Already said it yesterday that I didn't believe the fake narrative that it cost "half a billion". Written by morons, believed by morons that tried to argue with me about it.
This is what no journalist integrity looks like. Spout endless lies for attention, then don't retract statements after the fact.
Great blogpost. I agree that today its alot easier to make a game especially with advent of the super familiar x86 code. That said there are definetly exceptions that do deserve the 60 buck price tag, like the Witcher 3 and Uncharted 4 that the quality and content offered are undisputedly worth full price. But I will admit these games are exceptions to the rule.
Unfortunately big publishers will come up with even more devious ways of rasing the price in games, like absurd DLC packs, in game purchasing, Season passes, hell even two season passes for a single game is a thing now!
Call me pessimistic but I trully beleive things are only going to get more expensive for us the gamers.
In a lot of ways games are actually priced at what the market will bear. Its not the best system but it actually works pretty well
Many of the great games you mentioned that are <40$ are indie titles. small development teams and low cost graphical systems and even advertising bring down the production cost and so selling the game at a lower price is easier for the developers to do. they arent any publishers to pay either. just the small cost of lisensing digital distrobution.
I had seen a while back the break down being that publishers earned as much as the game developers getting the same cut.
i believe the break down of a 60 dollar game is something like 15 dollars for retailers 9 dollars for platform fees (microsoft and sonys cut) couple dollars lost on returns and then 30 dollars to go to publisher who usually gives half to the developer. at that point its no wonder that companies who self publish digitally can charge half the price of a AAA studio. i think steam takes just 3 percent? so developers actually see more of the money on a half price game. i mean NMS probably would have been priced at 30 dollars but when you factor in sonys cut for advertising and publishing plus the brick and morter cut you see that costs just rose exponentially.
you figure for every 1 million copies a AAA game developer earns something like 15 million dollars and then so do the publishers.
even if you dont think advertising should be included it is because publishers do the advertising and they take a cut of the profits.
another thing to mention is the market which actually works pretty capitalistically (if thats a word).
Doom is a great example. It may be a great game but its only worth as much as people are willing to pay. It may have been published and marketed as 60 dollars but it must not have been selling at that price point so price drops to a level people are willing to pay.
unfortunately developers can only make a game they believe is high quality and will sell well. Just like other media (hollywood i'm looking at you) there are high budget flops.
Thats why just like hollywood the game industry chooses the safe path releasing tried and true formulas and sequels like COD.
TL;DR - game pricing actually works pretty well games will adjust to the price the market will bear
P.S. WORTH is very subjective everyone holds different standards as you've mentioned.
I am a person you uses the dollars to hours formula. I'm willing to pay 10 dollars to see a new 2 hour movie so i believe a game should have at least 12 hours of entertainment for my 60 dollars.
I bought NMS at full price and i honestly dont regret it because for all its flaws i still was easily able to find more than 12 hours worth of entertainment and enjoyment from it.
games cant be precosted at what people will like or enjoy. theres no way for a company to know. however if they use the cost of development (and advertising if its through a publisher) as the base price point and then move lower as the market decides a games worth its actually a tried and true formula.
UK we pay£ 49.for new games pretty similar price, but on consoles it's never the full experience games are being broken up and sold as dlc so you could argue this is how the y increased the base price of games I agree eventually they will price themselves out of the market it's driving me away :-(
Glad you brought you DOOM 2016 . I went to midnight release at GAMESTOP and bought DOOM 2016 for 50 dollars USA ,thanks to GAMESTOP employee giving me his discount . Playing DOOM 2016 campaign on harder difficulty and opened up every Classic DOOM map and playing thru every Classic DOOM map ,i must of played well over 20 hours just on the campaign alone . Then played a bunch maps on SNAP MAP ,which added another 10 hours of game play . Then i started playing DOOM mutlipayer which i really enjoyed so i bought the season pass and now addicted too DOOM mutlipayer. So add another 40 hours of gameplay . Plus 'DOOM 2016 free update 3' with Free-For-All and arcade mode coming out this week . So i paid 90 dollars all together for around 70 hours of gameplay which comes out to around a dollar and 30 cents per hour . Plus i planning on playing a ton of 'Free-For-All Deathmatch' and some more of the SNAP MAP co-op missions which will probably add another 50 to 70 hours of gameplay . So , i feel like i am getting a huge bargain when it comes to DOOM 2016 !!!
Great blog ! Best sentence from blog ,'There are no defining measures of value to a video game' That is so true !
I (sadly) agree with basically everything you've said. Like UltraNova, I also believe that many games really are worth a 60$ price tag, like The Witcher III for instance, as not is the quality of the content absolutely fantastic, but it offers countless hours of playtime. Uncharted 4 was also absolutely brilliant, though it only has a 2 to 5 time replayabilty potential max, and it's multiplayer was good but not the best. On top of that the fact that it is an exclusive, means that I'd put the price more at 40$ or 50$.
The one thing I don't agree with however, is that the price of other consumer goods is measured by their quality. I believe that, just like games, people pay for the label here too. I am not denying that Apple phones are good quality (though my values compel me to never purchase anything that has anything to do with them), but there are definitely other phones of half the price with just as good, if not in some cases better, quality of the product, and I'm not even talking about mainstream western brands here. There is a degree of guaranty you buy when you buy a Samsung or an iPhone but the truth is there are cheaper phones of the same quality out there if you know where to look. The same goes for all kinds of products (apart from food).
And the whole No Man's Sky fiasco is just further proof of this. There is no way that the game would cost anywhere near 60$ if Sony hadn't picked them up. And to be honest, apart from the marketing, I'm pretty damn disappointed with what Sony bought to the game. In the end, it was still developed by 8 people with nearly no money. But whatever the case, the result was that a 100% indie game was marketed as a AAA title like Uncharted 4, which is ridiculous. The worst thing is that Sony probably pocketing half the money anyways. The result was one of the biggest backfires in gaming history.
All to say, great article, sad truth.