Features// Why Do Games Cost So Much?

Posted 19 Dec 2003 15:38 by
There's a lot of people who think that games cost too much, and we won't be the first ones to disagree with them. Recently a group even tried to organise a boycot of games buying to get the message over to the publishers, but we're not expecting it to get much support, not in the run up to christms, with great games like Burnout 2, Timesplitters 2, and Colin McRae 3 about to hit the shelves.

But there is a chance that the prices of games are justified. Consider the simple economics of creating a video game.

With increasing complexity, even relatively simple games will take 4-10 people 1-2 years to complete. Compare this with your favourite bands, who (unless they are Stereo MCs, or Pink Floyd) are often quoted saying things like "We wrote the whole album in three weeks, came off tour and recorded it in a month."

An album has a potential audience of millions. The best-selling album of all time sold over 50,000,000 copies. The best selling PC game of all time sold 5.5 million! After just 9 weeks on the charts Hear'Say have sold over 500,000 copies of their crap album. Dido's No Angel has sold almost a million copies in the UK alone. Most games never sell that many copies globally... nowhere close.

Games cannot hope to achieve similar sales. So greater production costs are defrayed against fewer sales. The obvious result is higher prices. If games sold more, the prices could come down? and this might happen.

Although the video games industry is making many people rich, it's not a complete gold-rush. Many famously popular and successful games companies, with many hit games under their belts have gone tits-up. The most famous game in the World is Tomb Raider, a five game series, every one of which has been hugely successful. Yet publishers Eidos are loss making.

Then there's the console manufacturer's cut. A sum of around 4, which is taken at source from the game publisher. This figure gets multiplied by the distributor and retailer margins, so by the time you buy the game, there's a tenner of the price that is attributable to the console manufacturer's cut. If this sum were taken from the retailer, rather then the publisher, you could see a 10 cut in console game prices immediately...

If that doesn't make sense, consider this... Imagine the developer calculates his material costs, staff costs and profit to be 10 on every game he makes, so he sells his games to the publisher for for 10 a copy. The publisher marks them up by 50% and sells them to the distributor for 15. The distributor marks them up by 50% and sells them to the retailer for 22.50... The retailer marks them up by 50% and you pay 33.75 a copy...

But then Sony/Sega/Nintendo/Microsoft say, "We want 4 from every copy sold, and we want the publisher to give it to us."
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Comments

Showing the 20 most recent comments. Read all 35.
Joji 21 May 2004 21:06
16/35
We are very lucky these days. Games are as expensive as the used to be in the 16bit days. I remember seeing some games one sale upto 60 quid in some places for SNES.

I spent 65 quid on my u.s SNES copy of Chrono Trigger brand new, and that's not too bad for an import game back then. Now however, with so many folk buying games from online this is gradually drives the prices of official games down quicker the usual. High street stores need your custom, so they have to act and quickly. Post xmas is the best time for this.

EG: Prince of Persia: SoT on Xbox/PS2 came out just before Xmas 2003 at 40 quid, by new year 2004 the price had dropped to 32 quid , if I'm correct it's still on sale at Game for that price now. This may drop again maybe this Xmas, and if not then in the new year January sales. The customer wins.

This never used to happen, in the late 80s-early 90s,
not this fast anyway. Even console price drops give us a better deal than they used to. And with development costs rising to make games, we are still playing 40 quid 98% of the time, we are doing okay surely.

If you want them even cheaper there is the second hand market, hiding some lost gaming gems.
50 and 60 quid is over priced. 40 quid is reasonable for a home console and pc, if you don't like the 40 quid price, wait a few months and get that game for 32 quid. So no I don't think games are overpriced anymore. But saying that it should be very interesting to see how much the PSP and DS game are priced at.

If I'm wrong on any of the above please correct me.





DoctorDee 22 May 2004 15:14
17/35
scanman wrote:

>people cant even stop buying petrol from one evil
>petrol company for one day, never mind never buy
>another priced game.

If the Evil company to which you are referring to is Bush-loving super-polluter Exxo(n), I try to never buy from them, on any day. Only problem is, the other petrol companies are almost as evil.
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crafty bison 22 May 2004 15:15
18/35
Joji wrote:

>We are very lucky these days. Games are as
>expensive as the used to be in the 16bit days. I
>remember seeing some games one sale upto 60 quid
>in some places for SNES.
>EG: Prince of Persia: SoT on Xbox/PS2 came out
>just before Xmas 2003 at 40 quid, by new year
>2004 the price had dropped to 32 quid , if I'm
>correct it's still on sale at Game for that price
>now.

I understand your points, but your examples are incorrect. You say that games are as expensive as they were in the 16-bit days, but then contradict your point saying they used to be 60 and are now 40.

And Prince of Persia wasn't out before Christmas on Xbox. It came out in December on PS2 for 40, and in March for Xbox and Gamecube with an RRP of 30, with the price of the PS2 game also falling.
Joji 25 May 2004 12:33
19/35
Don't be siilly, crafty. You are probably reading a spelling mistake or something, an error on my part, happens when you type you know.

What I mean is we used to pay up to 60 quid for a SNES game in the 16 bit days.

When was the last time you paid that much for a game??

Exactly, you haven't because 40quid is as high as it really goes now, and has been for a good few years now.

So how can you say games cost a lot, when the prices have gone down and we get more for our money, on console titles anyway. PC prices haven't really moved that much.

Ofcourse you can pay them 60 if you like, I'm sure they'd take your free cash.

Do you understand me now?
AM2Kid 29 May 2004 21:39
20/35
Rod - try Play.com. They have a pretty good selection of new (and some older titles) - some go for up to 40% less than the SRP.

Word of warning regarding their GBA games; some are US NTSC versions, which work fine on any GBA, but you'll have a job trading them in (no one will touch imported Ninty games for fear that they'll incur the wrath of the Big N).



crafty bison 30 May 2004 07:25
21/35
Joji wrote:

>Exactly, you haven't because 40quid is as high as
>it really goes now, and has been for a good few
>years now.
>
>So how can you say games cost a lot, when the
>prices have gone down and we get more for our
>money, on console titles anyway. PC prices
>haven't really moved that much.

Actually, I disagree - N64 games went as high as 75 - remember Turok?
AM2Kid 30 May 2004 10:53
22/35
Oh yes....I remember Turok :-)

SNES Lethal Enforcers was 70 too - but at least you got a lovely pink gun with it.....

mrnull 30 May 2004 15:48
23/35
I understand why games cost so much from my little stint in the industry. I don't feel that the console makers are wrong to get a share of the profits either, they're usually losing money on each console sold.

What I think would help is if there were a console which was as easy to develop for as the PC. Some of my favorite games were made from groups of small, dedicated staffers with great ideas. Armada for the Dreamcast is a great example, where Metro3D took advantage of the Windows CE capabilities of the console.

Just as an indie film can be more enjoyable than a Blockbuster, the industry should encourage small companies to produce lower-priced games. Not that I understand all the math behind marketing for such a huge industry, but I think it's a nice idea ;)

word.
fluffstardx 4 Jun 2004 18:03
24/35
I remember Virtua Racing on Megadrive... oof that price hurt the pocket. Even Sonic and Knuckles was 45.

I have to say that, with most consoles now having a budget range, gaming has got a lot cheaper. Ten years ago, a big seller like Halo would NEVER have gone budget- now i can walk into Gamestation and grab it for 16.

Amazing.
Joji 4 Jun 2004 18:18
25/35
That's so true, like I said in an earlier post on this topic.
CDs are cheaper than carts to make so the price falls quicker on games in the same respect I guess.

The second hand market and platinum releases of games also give us a better deal. We are much better off than ever before.
fluffstardx 6 Jun 2004 08:34
26/35
I'd forgotten the CD vs cart issue. It is true that the CD is a highly versatile and quite cheap medium- the reason why they were 40 for the Saturn and PS1 was that games had simply become 40 as standard; hence the reason DVD games now cost that. However, when the next gen takes up Blu-Ray (as Nintendo have confirmed and many say Sony have), we may have a problem.
Resident-seven 15 Jul 2004 00:48
27/35
Here in Australia new games cost between $80 and $100, although I have recently found a site where I can get cube games new for about $60, and I can get them months before they even come out here.
config 15 Jul 2004 07:37
28/35
fluffstardx wrote:

>I'd forgotten the CD vs cart issue. It is true
>that the CD is a highly versatile and quite cheap
>medium- the reason why they were 40 for the
>Saturn and PS1 was that games had simply become
>40 as standard;

Anyone recall Sony claiming that, with the launch of PS1 and the massive drop in piracy thanks to the custom CD format (LOL), that games would be about 20?

ohms 15 Jul 2004 11:55
29/35
We seem to pay more then they do in the States, but really games on console and PC are cheaper now than they've ever been. I pay around 25-35 for new PS2 or GC games online, and even less for PC titles, and many imports cost less than that.

The question you need to ask is, how can videogames, gadgets and luxuries be going down in price, when food, housing and essentials are always going up in price. Why is society geared towards entertaining ourselves ?

Kaxxx 15 Jul 2004 14:19
30/35
Games are always going to cost more to the hold that highstreet retailers have on the market.

GAME for one threatened Nintendo to pull their console from the shops when the original price of 99 was suggested for the UK. The GC then ended up being sold for 129.

Im sure the same goes for games.
config 16 Jul 2004 08:49
31/35
Kaxxx wrote:

> GAME for one threatened Nintendo to
>pull their console from the shops when the
>original price of 99 was suggested for the UK.
>The GC then ended up being sold for 129.

Yeah, and now the cretins are falling over themselves to drop the price of PS2 and Xbox to, oh, 99 quid.

Arseholes. Talking about burn rate.


Kaxxx 19 Jul 2004 10:38
32/35
GAME used to be a good retailer when they had EB as competition. Have you seen the prices they are asking for any half decent game on the Gamecube now though?

Also the prices of their preown stuff is ridiculous. Basically they sell a recent release preown for 5 more than the brand new same game on their website.
cul04 16 Aug 2004 10:29
33/35
Why do games cost so much...very leading question.

Read a lot of the replies in this thread and need to make a couple of comments.

1) As someone has said, games cost millions to develop and that is over a 12 to 18 month period (so add interest people)

2) Developers DO NOT Publish...publishers publish. Key difference. One company sells to another (and adds a margin)

3) Publishers DO NOT sell to the public. Retailers sell to the public.

4) The retailers set the prices, a Publisher and Developer have to get their profit from around 50% of the retail value, the rest of the money goes to the retailer.

5) The price is held artificially high by the retailer for perceived value. i.e. what will the general public pay for this game.

Games price will be calculated from the developers price + the publishers price + the manufacture of the physical game + the retail margin....and the retail margin is greater than the other 3 added together..

So blame Wal-Mart. (did you know Wal-Mart comes up in MS spell check...now that is power)
hiasmurf 2 Sep 2004 11:01
34/35
U R SOOOOOOO RIGHT , IF I BUY 1 GAME
I HAVE NO MONEY LEFT FOR THE REST OF THE MONTH
They over price things too much , because to them it is just a bit of plastic with a micro chip in
( mmmmm chips.....) sorry about that ....
anyway... we should be able to get them for 12
THEY ARE ROBBING US OF OUR MONEY BECAUSE THEY KNOW WE CANT RESIST!!!!!!!!!!
ITS HORRIBLE !!!!!!!!!!!
Slowking 18 Dec 2004 04:14
35/35
ohms wrote:
We seem to pay more then they do in the States, but really games on console and PC are cheaper now than they've ever been. I pay around 25-35 for new PS2 or GC games online, and even less for PC titles, and many imports cost less than that.

The question you need to ask is, how can videogames, gadgets and luxuries be going down in price, when food, housing and essentials are always going up in price. Why is society geared towards entertaining ourselves ?


American cultural influence? And yet, we do still seem to pay more for our games than those over the Pond.
Some of the blokes replying here, probably remember Harold MacMillan...you "have never had it so good". But, it could be better, and probably will, as gaming becomes even more of a mainstream leisure activity here in British society.
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