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The $70 Lie

The $70 Lie - Article

by Taneli Palola , posted on 11 November 2020 / 8,913 Views

With the advent of a new console generation upon us, the news that certain publishers have decided to raise the base price of their games from $60 to $70 also came out to give us a nice little surprise in anticipation. That brought back to mind a topic I've wanted to talk about for a while now; one that this recent talk of video game price points has made very relevant once again.

Among the most prevailing ideas in and around the video game industry over the last decade has been the notion that video games have to cost $60 or $70 to counter the rising costs of game development. The argument goes that, without this apparent necessity, video game developers and publishers won't be able to function and create those big budget games everyone seems to desperately want, and that many developers will have to be shut down without this additional chunk of revenue and resulting profit.

NBA 2K21

Sony and 2K Games have both already made the first steps towards $70 base price for games, with titles like Demon's Souls, Call of Duty: Black Ops Cold War, and NBA 2K21 all costing that much. While other game companies have mostly remained silent on the topic, you can bet they're watching very closely at how those games perform on the market at that price point. If they prove successful, expect other companies to follow suit, increasing pricing to supposedly offset the rising costs of game development. There are just three problems with that basic premise to begin with.

First, the whole idea that AAA video games need to cost 60 or 70 dollars/euros in order for publishers and developers to make a profit is a myth. Game companies like EA, 2K Games, and Activision Blizzard are making record profits almost on a yearly basis now, bringing in more money than ever before in the history of the industry. In 2017 alone the 25 biggest companies in the industry made over $94 billion, an increase of 29% over the previous year, and in 2020 the value of the video game industry in the US alone was estimated at over $60 billion.

Call of Duty: Cold War

Second, the $60 price point hasn't done anything to stop companies like EA from closing down developers that they own, nor has it stopped big independent developers from shutting down due to their own mistakes. The new higher price point isn't going to change anything in that regard. In 2018 Telltale Games was forced to close largely due to incompetent management, and in 2017 Visceral Games was shut down by EA despite being in the middle of developing a new game based on the Star Wars license.

A Star Wars game is practically guaranteed to make money just based on name value alone, as long as it's not a complete failure as a game, but because it wasn't a multiplayer "games as a service" title EA decided to "pivot the design" based on market trends and because it felt the game was too linear for modern consumer tastes. The success of games like Uncharted 4, God of War, Resident Evil VII, Nier:Automata, and any number of Nintendo titles is of course just a coincidence and doesn't mean anything.

Basically, Visceral was closed because the game it was making wasn't going to bring in a constant revenue stream from people playing online multiplayer and buying microtransactions. EA even stated that the closure was a cost-cutting measure. A cost-cutting measure that happened the same year that EA made over $5 billion in revenue, up several hundred million on the previous year. The rising price point has nothing to do with keeping development studios alive and everything to do with keeping publishers' profits as high as possible.

Assassin's Creed: Valhalla editions list

Third, and most important, the $60 price point itself was, just as the $70 price point is going to be, a complete fabrication that hasn't really been true for most AAA titles in years. In fact, at this point with things like season passes, microtransactions, multiple editions of the same game, in-game advertising, and exclusive DLC, the price you pay for a game at launch is increasingly becoming just an entry fee that only allows you access to the base game and gives you the option to pay additional money to play the rest of it.

Essentially, for any game these days that has an online component, the supposed price point of $70 doesn't really exist. Even primarily single player experiences like Middle Earth: Shadow of War or Assassin's Creed: Valhalla aren't free from this. You pay $60 to $70 for the base game, or upwards of $200 for any number of special editions with exclusive content that's not available anywhere else, then another $30-60 for a season pass if you actually want the full experience, which probably isn't even the full game even then because a lot of games also contain retailer-specific exclusive DLC that can't be bought anywhere else.

Demon's Souls

Add to this any number of possible microtransactions and the actual cost of a full AAA game can be anywhere between $90 to several hundred dollars. Simply put, there's no such thing as a $60 price point for AAA games these days, nor is there going to be a $70 price point when the next console generation starts, at least not if you actually want to play the full game.

The video game industry, at least on the AAA side, is making more money now than ever before in its entire history, and yet it's those companies at the top that try to argue in favour of raising the prices of games. The thing is, they've long since raised those prices, people just didn't notice because they don't pay it all at once, but rather over the course of several weeks and months as they gradually unlock the whole game they supposedly already bought. The $60 and $70 price points are a lie built on a false premise perpetuated by companies looking to profit from this "necessary" increase in price, despite it having quietly happened a long time ago already.


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37 Comments
mZuzek (on 11 November 2020)

Thanks for the massive dose of truth. Here's hoping this article stays at the top of the front page for as long as possible.

  • +26
mZuzek mZuzek (on 11 November 2020)

Wasn't too long

  • +1
Kakadu18 (on 11 November 2020)

Btw these 70 dollar games cost 80 euros, which is almost 95 dollars.

  • +12
Darashiva Kakadu18 (on 11 November 2020)

Yeah, this gets even more ridiculous with Euros. I checked just out of curiosity, and the online retailer I usually buy games from had COD: Black Ops Cold War listed at 75 euros and Demon's Souls at 80.

  • +2
Dante9 Kakadu18 (on 12 November 2020)

What the hell? The euro is stronger than the dollar, so this doesn't make any sense whatsoever. Us Europeans are getting screwed here.

  • +1
Mnementh (on 11 November 2020)

You forgot one point: raising the price is one way to get more revenue, but selling more copies is another. Games sell as much copies as never before, yet still the prices need also to be raised. And as a copy produces nearly no cost for the gaming company, more sales drive up profit pretty fast. More so, if the game is sold digitally the cost for the copy is practically zero.

  • +6
mZuzek Mnementh (on 11 November 2020)

And the digital/physical ratio just keeps rising, too...

  • 0
VAMatt (on 14 November 2020)

Every single decision made by a major publisher is intended to increase profits. That is the only reason the companies exist. If the prices stay at $60, ita because they've determined that $60 is the profit maximizing price. If they think $40 or $80 is the best number, that's the price they'll charge.

This is business 101 stuff. Big companies are run completely by the numbers, because that's the only reasonable way to manage large enterprises.

  • +3
Nautilus (on 12 November 2020)

You forgot to mention that, since digital sales have gone up exponentially, so too have the profit made by these companies. By being able to circunvent physical retailers, AAA companies managed to avoid paying the aditional 15% to 20% fee that the retailers take for themselves, not to mention cutting off the costs of producing the physical storage of the games and the necessary logistics to ship them off.

  • +3
LivncA_Dis3 (on 12 November 2020)

70 bucks might hurt them in the long run,
They might put it back to 60 if sales decline due to price increase hahaha

  • +3
VAMatt LivncA_Dis3 (on 14 November 2020)

They definitely will bring prices back down to $60 in a year or two if they see that $70 is hurting sales.

  • 0
Shadow1980 (on 13 November 2020)

At least games are still cheaper now that they used to be. I paid the equivalent of anywhere from $90 to $115 in today's money for N64 games back in the day, and $80+ for most PS1 games. It was even higher in the 16-bit era, especially if you were into fighting games and wanted to keep up with the latest roster expansions. $70 today is still cheaper than most games from 2010 and earlier, and only a few bucks more than what early Gen 8 games cost, and there's still a lot of games staying at $60. I'm not trying to justify the newest price hike or excuse general industry BS (modern monetization schemes are ridiculous). Just trying to put things in perspective.

  • +2
The Fury (on 11 November 2020)

I think we've had it easy, especially in the UK. Game prices have increased very little since PS1 era ditched expensive cartridges. I'm pretty sure my parents bought games for £35-40 even back then and I'm still buying games for £40 now. And these aren't just 45 minute fun games like Parappa The Rapper, they are 60 hour RPGs. Parappa the Rapper style games wouldn't even sell for £10 on PSN nowadays. The thing is, I never buy a game at full RRP. Will never buy a digital day 1 as long as the prices are so high in a fixed non-competitive store but if it means games get rid of aggressive monetisation, I'm okay with them putting the RRP up (As I still won't pay it).

  • +1
Darashiva The Fury (on 11 November 2020)

I would have no issue with the price increase if what you say about aggressive monetization would hold true and they would no longer be a thing in premium games, but I doubt that will happen unfortunately.

  • +7
The Fury The Fury (on 11 November 2020)

Indeed but their lies the issue. It's already been proven that companies will happily accept F2P monetisation in full priced games because people pay, even if they already paid for the full game. A sad side effect of the greed of the big companies. Odd as I'd say both Nintendo and Sony do those kind of things least (if at all) and it's Sony who are the first ones putting the price up so they get the flack for being 'greedy' in this instance.

  • +5
OneTime The Fury (on 12 November 2020)

In the late 80s, full price games were £10, budget games were £3 (significantly more for carts of course). You can't compare, of course, because they were written by a team of three or four people over a few months.

  • 0
nex (on 13 November 2020)

Meanwhile Activision and EA are making billions with microtransactions and season passes.

  • 0
Mystro-Sama (on 12 November 2020)

This will just push people towards piracy. We were doing so well too. :(

  • 0
couchmonkey (on 12 November 2020)

I thought Maybe this is their attempt to address the race to the bottom in the. Rest of the industry: I see $30 indie games go on sale for a few bucks all the time, free to play has become commonplace for a lot of online games, and don’t get me started on the mobile Dumpster heap.
But then you look at Burnout Paradise on Switch, where critics were pointing out it’s available for less than $10 on other platforms. Theses guys will adjust the pricing algorithm any which way gets them the cash.

  • 0
Cerebralbore101 (on 12 November 2020)

Any game with carved content or MTX instantly becomes either a no-buy or a wait-for-a-sale-purchase for me. Don't get me wrong. I'll buy DLC so long as it was always going to be DLC, and not content carved from the original game. But the shit that Assassin's Creed does is just pure greed.

  • 0
imparanoic (on 11 November 2020)

it's funny how they lump sony as a publisher as worst as the daylight robbery companies such as EA, 2K Games, and Activision Blizzard which i normally avoid like the plague as they are greedy and use microtransactions like mobile phone games, last time i checked, sony usually only uses DLC as expansion packs or optional to save time unlocking the extras without using too much time, on the other hand EA, 2K Games, and Activision Blizzard uses DLC in form of loot boxes and make them literally essential to avoid 20 hour grind for a single item, look as Sony's biggest hits such last of us part 2, god of war, horizon zero dawn or gran turismo, very consume friendly games unlike EA, 2K Games, and Activision Blizzard products which renowned for scamming gamers

  • -1
imparanoic (on 11 November 2020)

Note that Sony regular discount their games esp their AAA products, Sony knows price is king for consumers, on the hand, certain wii u ports on switch never get discounted in physical and occasionally discounted 33% of digital, but only 1 game download can be used on one account, unlike ms and sony which allows 2 downloads per game, also occasionally free upgrade to cross generation, nintendo has tendency of heavilty discounts occasional flops such as Nintendo Labo to silly prices, but wii u ports/cross gen games such as zelda breath of wild, mario kart, New Super Mario Bros. U still full priced, even up to 3 years release on switch

  • -6
Signalstar (on 11 November 2020)

Inflation alone justifies the price increase. Publishers suggest a price but retailers can set their own and gamers can simply choose not to pay it.

  • -6
Darashiva Signalstar (on 11 November 2020)

True, and if it really was just a simple $10 price increase with no other factors and revenue sources already in place within those games I wouldn't have much of a problem with it. On the surface it's fine, but for a lot of games the so-called base price point hasn't been the actual price of a game for a long time now, at least if you want to play the full game.

  • +1
Signalstar Signalstar (on 11 November 2020)

Define "full game". Noe one is forced to buy DLC or add on content. They do it because they want to. I can count on one hand how many times I have paid more for extra content for a game in the last 2 generations.

  • +1
Darashiva Signalstar (on 11 November 2020)

It can be something as simple as the Demon's Souls remake making certain equipment pieces exclusive to the digital deluxe edition, which I've seen some fans be quite annoyed by, or Spider-Man being a Sony exclusive character in that recent Avengers game. Or if can be actual story content cut off from the base game and then sold as separate DLC. For me any in-game content gated off from the base game to be sold at launch in different versions takes away from the "full game".

  • +2
Vendrom Signalstar (on 11 November 2020)

Developers have the right to increase their prices to whichever price tag they want. But inflation is not a true justification. Did all people get a pay rise due to inflation? Probably not

  • 0
Signalstar Signalstar (on 11 November 2020)

Inflation and wage growth are two separate economic issues. That is going in to a whole bigger discussion. Deflation or staglfation are way worse than inflation though.

  • 0
Runa216 (on 11 November 2020)

Inflation is a thing. PRices can and will go up as the market dictates. A company making more profit doesn't mean that they're not allowed to alter the prices on their product. If people keep paying 70 bucks or feel 70 bucks is worth it (it is), then the market will continue to thrive.

It's almost like gamers in general don't understand the first thing about economics. All they know is that they feel entitled to not having prices go up. The only way your voice will be heard is by voting with your wallet, and it seems the votes have been counted and it didn't ruin the industry when prices went to 60 and it won't ruin the inductry when they go to 70 and won't when it goes to 80. If it does...then people will stop buying and companies will see their profits sink and adjust accordingly.

The phrase 'the customer is always right' doesn't mean that they are incapable of being wrong or that they are without fault, it means that businesses need to go where the customers dictate, and that means pricing accordingly and offering the games and services that sell. That's economics 101.

Do I WANT to pay 70 bucks (90 CAD) for a game? No. nobody WANTS to pay more. Will I? Yeah. yeah I will. and so will many others. Games are bigger and longer and arguably better than they've ever been, so of course the value proposition goes up. Games have more content, the content is better refined, and there's a lot more to do in, say, GTAV than there was in GTAIV or GTAIII. It doesn't seem like that sometimes, but in reality these games have a lot more to them, making it worth it.

And no I'm not talking about perpetually updating games like MMOs or games with microtransactions. There's more content in God of War 2018 than in the PS2 original by a wide, WIDE margin, and the price difference, not accounting for inflation, was only 10 bucks.

Y'all are massively overblowing this. Yes, some games get microtransactions, yes some companies make a shit tonne of money off them, yes some companies ruin their games, but you can avoid that shit entirely and still end up not having enough time or money to play all the games that are left. The point is simply, stop whining and being entitled all the time. Bread doesn't cost 5c a loaf anymore, you can't get a whole bag of candy for a dollar, and the games industry is changing very quickly as it is a rapidly growing industry. The only way to make change is to vote with your wallet and people, for all their bitching, don't do that. They keep spending, because it's still worth it even at the raised costs. I didn't even hesitate to spend 120 on Demon's Souls Digital Deluxe edition and I'm going to get the physical edition too, because I know I'll spend hundreds of hours on it over the next few years, same as I did with Dark Souls and Bloodborne.

The price is fair. If and when it's not fair, the market will stabilize. That's how economics works. So instead of bitching about 'waaah, companies are making too much profit so we should neglect basic factors like inflation', vote with your wallet. Stop buying games. Bitching on the internet just makes you look like an entitled brat.

  • -10
Runa216 Runa216 (on 11 November 2020)
  • -14
Runa216 Runa216 (on 11 November 2020)

Inflation is a thing. PRices can and will go up as the market dictates. A company making more profit doesn't mean that they're not allowed to alter the prices on their product. If people keep paying 70 bucks or feel 70 bucks is worth it (it is), then the market will continue to thrive.

It's almost like gamers in general don't understand the first thing about economics. All they know is that they feel entitled to not having prices go up. The only way your voice will be heard is by voting with your wallet, and it seems the votes have been counted and it didn't ruin the industry when prices went to 60 and it won't ruin the inductry when they go to 70 and won't when it goes to 80. If it does...then people will stop buying and companies will see their profits sink and adjust accordingly.

The phrase 'the customer is always right' doesn't mean that they are incapable of being wrong or that they are without fault, it means that businesses need to go where the customers dictate, and that means pricing accordingly and offering the games and services that sell. That's economics 101.

Do I WANT to pay 70 bucks (90 CAD) for a game? No. nobody WANTS to pay more. Will I? Yeah. yeah I will. and so will many others. Games are bigger and longer and arguably better than they've ever been, so of course the value proposition goes up. Games have more content, the content is better refined, and there's a lot more to do in, say, GTAV than there was in GTAIV or GTAIII. It doesn't seem like that sometimes, but in reality these games have a lot more to them, making it worth it.

And no I'm not talking about perpetually updating games like MMOs or games with microtransactions. There's more content in God of War 2018 than in the PS2 original by a wide, WIDE margin, and the price difference, not accounting for inflation, was only 10 bucks.

Y'all are massively overblowing this. Yes, some games get microtransactions, yes some companies make a shit tonne of money off them, yes some companies ruin their games, but you can avoid that shit entirely and still end up not having enough time or money to play all the games that are left. The point is simply, stop whining and being entitled all the time. Bread doesn't cost 5c a loaf anymore, you can't get a whole bag of candy for a dollar, and the games industry is changing very quickly as it is a rapidly growing industry. The only way to make change is to vote with your wallet and people, for all their bitching, don't do that. They keep spending, because it's still worth it even at the raised costs. I didn't even hesitate to spend 120 on Demon's Souls Digital Deluxe edition and I'm going to get the physical edition too, because I know I'll spend hundreds of hours on it over the next few years, same as I did with Dark Souls and Bloodborne.

The price is fair. If and when it's not fair, the market will stabilize. That's how economics works. So instead of bitching about 'waaah, companies are making too much profit so we should neglect basic factors like inflation', vote with your wallet. Stop buying games. Bitching on the internet just makes you look like an entitled brat.

  • -5
Mnementh Runa216 (on 11 November 2020)

The market says: microtransactions are the way to go, because that brings in even more profit than the price point of the game. So expect more of this. hooray!

  • 0
Runa216 Runa216 (on 11 November 2020)

@Mnementh Microtransactions are only in a small percentage of console games. It might seem like it's a large number because they are the ones that get the most attention and the most news headlines, but there are still FAR more games without them, and more and more people are resisting them. Look at The Avengers as a good example.

  • 0
Verter Runa216 (on 11 November 2020)

I think it's not the same to whine, bitch and be an entitled brat than to give an argued opinion, and to me this article falls into the second category. The proof is that well-made points usually raise other well-made points and, excluding the censoring parts, yours is. So, in my humble opinion, debates which involve different perspectives that can be enriching to read should never be censored with rough appellatives.
On a different note, I'll point out just a tiny thing in relation to the games: the refinement part is mainly due to better tools, more resources, a further specialization, well-established procedures and improved skills thanks to constantly building over the same formulas. This is not relevant for the whole discussion and it can of course be argued, but I thought I could just say it. =)
And, for the record, I think both of you have your share of reason.

  • +1
Cerebralbore101 Runa216 (on 12 November 2020)

@Mnementh How could you cheer more MTX? Those things are cancer.

  • 0
Mnementh Runa216 (on 12 November 2020)

@cerebral: sarcasm

  • +2
Azzanation Runa216 (on 12 November 2020)

Game software is also selling 10x more than in the 90s. Companies are making more money than they ever had. those that are failing to make profits are also the same companies making bad games or bad decisions.

  • 0