This editorial originally was
presented on lazy.GEEKS (6/17/03)
The Cost of Fun
I know that my usual repertoire
of posts cover either reviews or The Collector's Bitchings, but
today I wanted to mix things up a bit. I was reading an
article on MSNBC.com and could not help but write a
counter-point. The article (check out the link for more info) covers
the trends in pricing for video games over the years and the fact
that prices have been pretty static despite inflation. I mean, who
out there remembers the original Romance of the Three Kingdoms games
for the NES costing more than $60 new? I do. Isn't inflation
supposed to raise prices so that we now would face $100 games? What
about Phantasy Star 4 for the Genesis and its initial price of $100?
Should we be facing $125 per game? Well, I think I have some
perspective on this as someone who has seen the best and worst of
game pricing, for I have been there since the days of Atari 2600,
Intellivision, and Odyssey 2. I am The Collector and welcome to my
first non-Bitching editorial.
When I first entered video
games, like most people, it was through my parents. Therefore I
didn't have to deal with that ugly thing we all love (and a good
deal of us also hate); money. However, by the time the 8-BIT NES had
reached full swing, I was starting to buy games with my allowance.
These games would usually have to be the latest and greatest, but
sometimes they would be the ones I had missed when they first
arrived (I missed out on the original Zelda until about 1989...that
was a shame). I would be spending between $20 and $65 of my hard
saved Christmas and Birthday money on games from old to new. Some
games were even higher up there; The above mentioned Romance of the
Three Kingdoms (number 3 to be precise) cost around $75-$80 at my
local video game/toy stores.
With time, prices started to
drop a little and the average new game for the SNES or Genesis would
be about $55-$60. This was a relief, but also this was a time when
video games were starting to pick up again (the industry almost died
in the mid to late 1980's due mainly to poor decisions from Atari
with help from Nintendo). So, despite the raising inflation, prices
were going down. However, every so-often a game would defy all
logic; such as Phantasy Star 4. It came out with a $100 price tag. I
wanted to game and so did many others, but Sega assumed our want for
the final Phantasy Star would outweigh our common sense and wallets.
Sega was wrong and the game sold pretty well after stores had to
drop the price to about $45 to get them off the shelves (this is
when I got it...only a few months after it came out...bad
Meanwhile, at this time, there
was also the birth of the NeoGeo. A system that cost hundred upon
hundreds of dollars, was sold in only a handful of stores (no one
wanted to try to sell this economic behemoth) and had games priced
around $250, each. Well, the NeoGeo was easily ignored and lost in
the history of poorly conceived game ideas (good idea, bad idea of
Soon, people were introduced
into the first real CD-ROM based platforms. These being the failed
Saturn and the (as of right now) all time king of video games, the
Playstation. Many people in the media voiced complete surprise at
the games coming out for prices of $50 for a third party game and
$40 for first party games. Once again, inflation is still rising
over the years but game prices dropped.
It was this trend that carried
on to the present day. With our Playstation 2, Gamecube, and even
the much loathed (at least by me) X-Box. We see new games come out
for $40 for first party and $50 for third party, with even some
surprises of lower prices (I saw Wild ARMs 3 for only $35 when it
first hit shelves). We also are seeing some new games for the
Playstation coming out at $10-$20 (the Italian Job for PSX was only
$10 at release, and while being a pretty lame game, it was worth
True, we get some trend
breakers; We've all heard of Steel Battalion with it's several
hundred dollar price tag, or SOCOM coming out at $60. But these have
exaggerated prices for a simple reason; you get more than the game.
With SOCOM you get you nifty headset, and with Steel Battalion you
got a controller that could crush a small child, or several large
squirrels. However, we must remember when you get something extra,
you pay something extra; and so far gamers seem to realize that with
So, how does this fit into
being an editorial? How does it tie into that MSNBC.com article? Sit
down, hold on, and enjoy the ride.
Why, Oh Why?!?!
There are many elements that go
into the pricing of a game. It is not simply a matter of inflation
alone. Inflation is an important part of our modern capitalistic
society, but it is not the only part of the economy. There are other
economic factors such as supply and demand, size of market, and even
cost of manufacturing. Then there are other economic factors that I
prefer to think of more as audience factors (all of these in the end
weigh in as economics, but as a non-business type of person, I like
to think the more tangible and understandable realm called society).
Who's Invited to the Party
Back in the days of the 8-BIT
systems and even a little prior to that era (usually that era is
defined by the NES and Sega Master System), the amount of people who
played video games was rather small. It used to be a social taboo to
be a video game player unless you were a tiny little child. While
this is still a little of the case today, more mature of content in
games (and I don't just mean sexual situations or violence; think
plot, like in Metal Gear Solid, to name one game of many) has
changed this some. Not to mention the fact that the video game world
in the 1980's was suffering from poor decisions a-plenty. There was
Atari with it's flops like the 7200, that never saw the market until
after it was done, or the lawsuit happy days of Nintendo. I mean
what self-respecting company would want to get involved in that
mess? Not many. That is why games suffered and as a result, with
little demand, prices had to get jacked up.
To put it simply, if a game
costs X dollars to develop and produce, and each cartridge costs Y
dollars to make, you have to sell Z games at a given price to make
money. With little market, that price had to be rather high to turn
a profit. Simple and to the point.
With time, more companies
joined the game world, and thus more quality games were released.
This meant more people were drawn into video games and prices could
be lowered per unit and a profit could still be had. If you look at
the world of gamers now compared to back then, you'll see more
people of more backgrounds are playing now, not just the true geeks.
This meant more games sold and thus a price would not have to be as
But Wait, There's More!
With more people playing games,
and more games available, you have to entice people to play your
game and not the other guy's game. Enter the price wars.
What better way to bring about
customers than through competitive prices. But you must keep in mind
that price wars are a two way street. Not only does it make the
customer want a game (if there were two games you really wanted, and
could only get one at a time, would you go for the more expensive?
Really?) but it also causes the further competition in platform
manufacturers. If all of the PS2 games were cut in price, Microsoft
and Nintendo would have to follow or face fewer customers. Either
way, this is the true motivating factor in prices. If someone jacks
up a price, you will be pissed and the competition could take
advantage of it. You think if Gamecube games went up in price that
Sony and Microsoft would not exploit it? Please say you didn't say
So What's Inside
Another factor that I was quite
pissed to see the article completely and totally ignored is what
makes a game. Not plot and graphics, but physically what makes a
game. In the old days of more expensive games, we were all using
cartridges. A cartridge would consist of a plastic custom made case
(all SNES games may look the same on the outside, but who else could
use this case...Sega? I think not) with a board inside that
consisted of many chips and possibly a battery. Each of these chips
were custom made chips designed for that game or for a small group
of games. That's how breakthroughs were made in the past. You made a
better chip and if cost more money; remember games bragging about
how they were an amazing 4 megs in the days of 2 meg games; these
advances were made by making better chips.
So, now we have CDs and DVDs.
These are not custom made. If Sony needs a DVD for a video game, it
is no different than a DVD they would use for production of movies.
Plus a CD/DVD costs only a handful of change to make. That's why a
2, 3, or more CD/DVD game can cost the same as a 1 CD/DVD game. Low
production cost. Ever see a multiple cartridge game? I doubt you
have, but if you did, I'm sure the price was pretty damned ugly.
To put some actual facts to
this, while a game no on tends to cost more to develop (Enter the
Matrix cost $20 million to produce...damn...), the actual DVD costs
only a few cents. In the past, a game on a cartridge could cost up
to $35 just to make per unit. That means the retailer would end up
having to sell them for about $50 to make any money at all after
store advertisements and the such. Also, on this same sort of note,
Nintendo used to charge outrageous fees to get a game licensed by
them (remember the official Nintendo seal on all your non-Tengen NES
games?). Now the fees have been cut in half or more by most console
developers. Less price goes into the media and less goes into the
licensed logo on the box. 'Nuff said.
You Mean I Bought THIS!?!?
Another key factor in pricing
is while there are some truly great games out there, there are also
some crap-tacular failures. If prices were higher, people would
never take the risk of buying a game that they would throw away or
beat in a matter of hours after opening it for the first time. Also,
more of these games would be returned if we were all paying twice as
much per game. With current prices, most people don't bother
returning games for a refund, since the price is not that big of a
deal. If anything, most people will hold onto the game for a few
months and then sell it to a used game store to get the next flop.
But Wait, There's No More!
Also, ask yourself this
question; would you want to pay more for the same thing? I mean some
games can raise prices in this current generation of consoles, but
why? Simply put, they offer you something more than just a game.
That Pokemon Stadium game had a link thing to connect your GB to the
N64, Steel Battalion has the coolest and most expensive controller
to ever grace a console, and even SOCOM has a nifty headset. They
charge more because they offer more. If you look at games in the
past that charged more and offered nothing new, one of two things
occurred. Either the game would not sell until the price dropped a
lot (like with Phantasy Star 4...good game, but not $100 good), or
the game would sell as expected...huh? It was not expected to sell
well to begin with, so the price was higher to make money from the
people who would buy it at any price (like early Romance of the
Three Kingdoms games...who bought them? Only the die hard fans, and
the price didn't matter to them). Will the makers of Doom 3 do this
for the X-Box release...NO! They have a blockbuster on their hands
and know that with a normal price, more people will buy it and thus
more total revenue. Do the math.
Money Can't Buy Happiness
Alright, here's the heart of
the price issue in today's society. Money. It's always the heart of
the issue, but now more than ever. The entertainment industry
sagging, with the exception of video games. A price increase would
possibly ruin this for everyone involved. If people no longer feel
compelled to buy games, let's say because of price increases, the
industry would slump and this is something the industry will not
want to cause.
More importantly, the
unemployment rate is the worst in 8 years right now. This means
people don't have the money for games as it is. If the prices
increase, many people will stop buying all together so they can
afford food and shelter. I, for one, am working a job that pays me
less than I should be getting simply because companies cannot afford
to pay good wages right now. Once again, the economy is not good
enough to risk raising prices and losing customers.
So, Here We Are...
So, while that article on
MSNBC.com tries hard to make a point, I can tell you two things;
one, any real points made by it are self-defeated in the following
paragraph; two, this reporter is not a game player. I personally
like to think that reporting should be done by fans with the
restraint to be at least a little impartial. Would you want someone
who never heard the word "baseball" to report on the World
Series? It would be funny for a few minutes, but then we'd all be
pissed off beyond words. If this reporter knew anything about video
games, he'd know the information I stated above, and if he knew
about economics to any degree he'd realize a price jump would lead
to the competition exploiting it and laughing all the way to the
Games are cheap now, and will
remain so. The product is cheaper to make now than in the past (DVDs
are cheap and always available), price wars involve lowering prices
and not raising them (or the competition will have the best
advertising scheme ever..."we are cheap, and they are
expensive"), more people play games now so there is more total
money out there to be had, and we are still getting the same product
we always got (it might have better graphics, but it is still just a
game by itself). Prices may one day increase, but it wont be an
issue of a ten dollar jump. That is too noticeable. It will start
out small and barely match the inflation rate, at best (or worst).
Anything else would ruin all attempts to win over a potential
Some of you may not have agreed
with what I said, and that's why it's an editorial. As for the solid
facts, there's no arguing, and there's also no arguing with history
either. If you disagree, you're free to your own opinions, but you
are wrong. If you agree...good. The $50 game is here to stay.