With the current COVID-19 pandemic, video games are probably more popular than they have ever been. Consoles have been regularly out of stock, and many players found themselves enthralled in the lands of Galar, Midgar, and remote deserted islands.
But while players are enjoying their current consoles, Sony and Microsoft are hoping gamers are ready for even bigger worlds — ones with more detail, busier towns, and that can load with little to no lag. However, if players want to get the most out of their next-gen systems, they may need to be prepared to dish out a little more for their games.
At the beginning of this month, publisher 2K Games revealed more about their annual basketball game and its various editions. The PlayStation 5 and Xbox Series X versions will launch with the consoles, and as such, will debut after their current gen counterparts. People who buy those will get a free upgrade to their PS5/Series X counterparts, but if those who want some b-ball action on the actual next gen editions will have to pay $69.99 — $10 more than current video games.
But this probably isn’t a one-off because of the free upgrade. According to the CEO and president of a game research firm, other publishers are reportedly also looking at raising their prices “on certain franchises”. He points out that games have been $59.99 since circa 2005, and prices on other media have gone up and so should AAA games.
So should games be almost $70?
This Ars Technica article analyzes the cost of video game consoles in terms of inflation, and many consoles were around $500 in terms of 2020 dollars.
Neither Sony nor Microsoft have announced the price of their new game consoles, but most analysts agree they will likely charge around $500 at launch (for the disc drive versions at least). Back in 2013, Ars Technica analyzed game cartridge and disc prices, and they found that game prices have, relatively speaking, fallen over the years. No doubt that would be even moreso now, seven years later. And I don’t think anyone would disagree that game production requires more work than ever, with 3D HD graphics, voice acting, full orchestra soundtracks, realistic physics, and all the other bells and whistles we’ve become accustomed to over the years.
At the same time, while game developers face more competition and public scrutiny, video games are more popular than ever. It’s not a niche hobby with a limited audience like it used to be. Plus, video games face incredible competition from apps and indie games, and very few games are exclusive to one console anymore. And while many publishers are expected to provide some support post-release, they also can make extra (or, as it seems to be in some cases, purposefully save some) content and charge for it in the form of DLC.
Speaking of digital, digital distribution is very popular in fact, and companies are trying to nudge buyers to go for downloads over physical. This means that they not only save money by not having to pay stores, production of cases, shipping, etc., they also take away from the lucrative second-hand market — GameStop, eBay, garage sales, and all the other channels. So regardless of how you look at it, comparing video games to movies (which either rely heavily on theaters or TV/streaming backing) or other forms of entertainment is not a great comparison. I mean, how often do you see collector’s editions for movies with steelbooks, artbooks, or figures packed in versus video games? That’s another way game companies tend to siphon a little more out of gamers.
I find it interesting that the first game to announce this is a sports title. As most gamers know, almost all the sports simulation games are annual releases, and they tend to have some of the lowest return-on-investment in terms of dollars. Very few sports games are worth much one year out, let alone a few years out. That’s not to say players won’t get $60 worth of entertainment on them. But if NBA 2K20 is worth about $6 right now at GameStop, how much will the PS5/Series X of NBA 2K21 version be worth 10 months later? $7 since that would also 10% of its original retail price and about 17% more than current prices? Higher due to next gen excitement? Or perhaps less because the PS4/XB1 gets a free upgrade?
But, well, everything is going up, so it shouldn’t be a surprise. Ironically, it might have been easier to handle if the consoles had launched last year. I’ve noticed many people paying at or over MSRP for some in-demand consoles and games. Video game purchases have been on the rise and outright thriving since the start of the pandemic.
Although many people have faced tightening belts, people have had more time and likely wouldn’t have blinked at a $10 increase. But will they want to during the holidays, when perhaps they’ve gained a nice collection during the spring and summer? On a next gen console, asking players to pony up another $10 on top of the roughly $500 for a new system is going to be rough. Not to mention due the pandemic and other potential events this year (say, unrest from a US election), supply chains and game releases could be disrupted as Sony and Microsoft try to convince the world to jump to their new consoles.
The other elephant in the room is Nintendo. Nintendo tends to be stingy with marking down its first party offerings, and even a lot of stores block off Switch games from promotions. If Nintendo can keep their releases at the $59.99 price point for as long as possible, the cheaper games plus a cheaper console could be a huge issue for the PlayStation 5 and Xbox Series X. Sure, Switch versions may not be as good in graphics or framerate, but 2-player capabilities right out of the box + less dollars (especially if they, presumedly, do some kind of holiday bundle) = potential Nintendo dominance for a while. However, Switch cartridges do cost more to produce than Blu-ray discs and other optical media, so Nintendo perhaps has a better excuse to start raising their rates. At the same time, look at most of their TV commercials — it’s obvious they’re targeting kids and families, who are more likely to be budget-conscious.
Either way, I think it’s the casual gaming community and young players that this change may be affected the most. For around $70, an adult can get a child a tablet like the Fire 7 Kids Edition Tablet. Yes, it won’t be able to play Animal Crossing: New Horizons, but it can do a lot more than a Switch can. The pandemic has also led to rising PC sales, although there has been a slowdown due to the lack of components from China.
Still, it’s likely in many parents’ mind that saving a little more for a PC capable of playing Minecraft might be a better investment than a top-of-the-line gaming console since it can also be used to do schoolwork, Zoom calls, send emails, and other activities helpful for distance learning. That same sort of mindset can apply to other demographics. Yes, even though video games are relatively cheaper than they have been historically while the cost to make them has gone up, that is not going to ease shoppers who have several options when looking for devices that allow them to jump on platforms, race through streets, solve puzzles, or romance beauties.
Personally, the last few years, I expected some publishers to test a $64.99 price point on some games. Final Fantasy VII Remake comes to mind, as Square Enix could explain it was due to the cost of including an installation disc as well as a game disc. Psychology is a huge part of shopping (that’s why companies have huge marketing divisions), and while there are arguments over whether it’s better to have one major price jump versus gradual increases, but while this is a roughly 17% increase in the price of games, I doubt this will lead to a 17% decrease in game sales that would lead to less profits. However, it might push some people to keep their current game consoles for longer, just as how they’re keeping cell phones for longer before upgrading.
So really, while of course as a cheapskate I’m not happy about paying more for anything, that’s the real problem: it’s not the fact that games are going up, it’s the fact that gamers have to pay more to go along with their new console plus buy new accessories. That’s a lot of money to lay out at one time, and it’s probably why a $64.99 MSRP on certain Switch, PS4, and Xbox One would not seem as significant. “After all, for $5 more, I’m getting really good graphics, better framerates, etc.!” But $10 more? That’s going to cause a little more hesitation. Especially when, in the case of NBA 2K21, there’s not much of need to buy the PS5/Series X version. Either go with the current gen version and get the free upgrade, or make sure you sell your copy right away since sports games tend to drop like a rock.
Even then, players may get a higher percent back on the current console versions since there will be a bigger market for them. I will say it would be nice if more publishers do offer a free upgrade program. Again, charging $64.99 for PS4/Xbox One games might make it more palatable if players are promised a better version in exchange, but it’s probably too late in their life cycle to raise rates now. If companies had done this a couple of months ago, though, it might have been a really savvy business move since games and consoles have been incredibly hot items during the pandemic.