Monday, May 17, 2021

A $70 Future

By: Patrick Morris


With the ninth generation of consoles right around the corner and the console wars starting to heat back up the fidelity and shear scope of video games is at an all time high. There seems to be a new bar being set for both quality and breadth with every new triple A release. Naturally as the fidelity of games increases so does the cost of production for said games. Recent leaks have shown the price of Take Two's NBA 2k21 to be $60 for the current gen and $70 for the next gen version of the game. And like clockwork the discussion, speculation, and bellyaching amongst the gaming community has begun to spin up. But the standard price moving from $60 to $70 could turn out to be a good thing for players, developers, publishers…really the industry as a whole. The only potential limiting factor to this potentially elusive win win win scenario is how publishers allocate the increased revenue generated by higher prices.

 

Welcome welceome welcome everyone welcome back to LegalSpeak a ColdNorth Production! I'm the Law Morris and this is the video essay series in which I get to talk about the games I've been playing and what I think of the medium as a whole. I know we have been gone a while and at first it was because of quarantine then it was because I was moving and things were going to change for this show pretty dramatically but believe me you do NOT want to see me not reading from a teleprompter! So this week we will be talking about the $70 price point and why it could be exactly what we have all wanted for so long.

 

Prior to getting started though I do want to establish my credentials, if youre a long time watcher of this show you probably know that I have a degree in economics so when it comes to speculating and theorizing on this sort of thing its not entirely baseless. Now that that’s out of the way lets get to it!

 

Price inflation is something that is commonly known and widely discussed and accepted in almost all industries. It doesn’t take an economist to understand that as more money is printed every dollar is worth less. But what's talked about far more infrequently  is purchasing power and the impact inflation has on it. To put it extremely simply the term purchasing power refers to the portion of a standardized basket of goods that one dollar can purchase. For example: if in the year 2000 a gallon of milk cost one dollar then in 2020 that same gallon of milk (not the exact same gallon of course) now costs two dollars. Over the course of twenty years the purchasing power of a dollar has been cut in half.  Thus leading to people needing to spend more dollars to buy the same things. 

 

Prior to the sixth generation of consoles the price of video games varied dramatically. For the most part PlayStation games cost around $40 with some of the more complex games costing $50 or $60 while Nintendo 64 games generally cost $50 but fluctuated quite a bit more (I remember my dad paying $80 for my copy of Star Wars Episode 1 Racer at Shopko). The video game industry is still a very new one but back then it was the wild west era of what would soon become the largest entertainment industry in the world. With the introduction of the fifth generation of consoles (GameCube, PS2, and Xbox) the price of games became pretty well standardized at $50 across all platforms and almost never varied from that price point. For four years video games cost $50 new and that was all there was to be said about it. Then in 2005 with the introduction of the Xbox 360 game prices went up and the new standard price of games was $60. And that’s the way things have been ever since. 

 

But when accounting for how the purchasing power of a dollar varies year to year while the price tag on almost all new games has been $60 since 2005 the actual price of games has been steadily decreasing to the point they are at now which happens to be an all time low. Modern video games cost more to develop than ever and are being sold for an all time low price. The purchasing power that $60 that was spent on Perfect Dark Zero or Call of Duty 2 at the launch of the Xbox 360 now has the purchasing power of $79.20 in 2020 dollars. When the GameCube and original Xbox launched in 2001 and their games cost $50 that $50 held the same purchasing power of $72.82 in todays money. To expect to continue to pay $60 for a new game in 2020 would be like expecting new games to cost $45.45 in 2005!

 

And that’s only analyzing the price of the product. Games are bigger than they ever have been and are taking far longer to develop. Development teams have gotten bigger and new jobs have been born from the advancements in technologies. The Elder Scrolls 4: Oblivion was released in March of 2006 and was at the time one of if not the biggest game of all time. It featured an expansive open world with dialogue from almost every character one of which was even voiced by Sir Patrick Stewart. Not to diminish the role Stewart played in Oblivion but it undoubtedly consisted of what was probably a couple days in a recording booth getting his lines down on a track. And at the time that was what being a major actor in a video game consisted of. Voice acting is legitimate and difficult work but it has never fetched as high a price as physical acting. In 2019 Death Stranding featured fully acted both voice and motion captured roles from several big budget Hollywood actors. Point being that jobs have been born of technology and with more jobs comes increased cost of development for that $60 (actually $45.45) game we are all buying. 

 

The obvious counter argument to this would be that the audience has grown tremendously and with that more copies of each game are being sold. But that argument can really only be used to counter one of the two major points supporting a need for more expensive games at a time. At the end of the day if games cost the same to develop as they did in 2005 but more copies were being sold then yes the price could remain the same. Or if the purchasing power of the dollar had remained the same and the audience had grown, then yes the price of games could remain the same. But the cost of development has increased and the purchasing power of a dollar has decreased and the increase in audience has not been proportional to counter both simultaneously.

 

For years the gaming community has been complaining about monetization methods being used by publishers to recoup the massive costs of development. New anti-consumer revenue strategies like paid DLC, cosmetic items, games as a service type games, and loot boxes have been implemented in an effort to subsidize the insanely low price of video games. I am in no way trying to defend the usage of loot boxes but revenue models that are clearly anti-consumer have been introduced into the industry as a result of a consumer base that is unwilling to accept a price increase proportional with inflation rates. Gamers are happy to accept rising costs of almost everything else in the world, groceries, gas, movie tickets, McDonalds, etc. but unwilling to accept a standard edition game priced higher than $60. Many publishers have been overly aggressive and predatory in recent years but the blame does rest entirely on their shoulders. A stubborn consumer base has to be willing to accept their share of the blame if the problems facing the industry are going to be overcome.

 

So ultimately what could a $70 price point change?  In a perfect world it would lead to less aggressive monetization. That would mean fewer loot boxes, fewer microtransactions, and less paid DLC. It would also mean more types of games that we are almost all saying we want. Multiplayer games are big money makers, which is a huge reason what has led to multiplayer and single player experiences being almost entirely separated. Do you remember when Titanfall came out and it was an entirely multiplayer game and a huge part of the discussion around that game was how egregious it was for EA to put out a multiplayer only game for $60? That practice has been normalized over the course of this generation and that’s totally fine because a lot of multiplayer games are worth the full $60 but there isn't as much money to be made in single player experiences so those have almost entirely died out. Well if we start paying more for single player games then theoretically publishers will be more inclined to start pushing out more single player story focused experiences. 

 

And finally and most importantly if we are willing to pay more for games then there wont be as much financial stress on publishers to have a product in the market and developers will inherently be given more time to develop effectively reducing the need for crunch in development and leading to better games. We are currently in the midst of a mental health pandemic and everyone paying an extra $10 for video games means less financial stress on a publisher leading to less mental stress on a their employee's that’s something I'm happy to pay an extra $10 for, hell if I could be guaranteed that the increased revenue from higher priced games would be used to better the working conditions for everyone involved in development I would happily pay $80 for new games.

 

So what do you think about the $70 price point? Am I a complete idiot for being so willing to pay more or are you of the opinion that it could end up being a good thing? Let me know in the comments down below. And while you're down there don’t forget to subscribe for new content every week! You can see everything we do including both of our podcasts all in one spot over at ColdNorthPro.com, I will be back next week talking about something else entirely so until then just go play some games!

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