Who's Responsible For The $US60 Price Tag?

Just how did we get to $US59.99 for the cost of a new game, anyway? Collusion? Happenstance? For a sector that mimics Hollywood's studio model, the answer is about as simple—and clear—as why tickets cost $US10.

Crispy Gamer's David Thomas went searching for who decided on the $US60 standard and more or less found no one in the industry specifically responsible. Which defies logic, as someone or some thing had to be the first. But when the decision was made, it wasn't tackled from the front - i.e., Company X made Y game, its production and marketing costs were Z, and profit A on top of that gives us price B. Publishers pick a price point and then work backward to justify a game, and the $US10 allows them to justify more.

But the influx of downloadable games at much lower price points raises a new question: Are video games on the whole overpriced? Or are they underpriced? And if no one forced the $US60 question, why do gamers accept it? You may not like the answers.

The 60-Buck Dilemma [Crispy Gamer, Sept. 23, 2009.]

The same argument could be applied to the movies: Movie tickets have increased because special effects cost more and Brad Pitt earns more and, gee, those nice seats at the theatres cost more. Of course, the price tag reflects a focus on the kind of fun big budgets deliver; and bigger-is-better dominates the public imagination.

"Ultimately, what we collectively found was that we've modeled a hits-driven business, not unlike film; and the massive downside to that structure is that it marginalizes the art-house products — the more risky or out-of-the-box games," [says the Entertainment Consumer Association president Hal Halpin.]"But that's also our roots, where we've come from. Really compelling, fun and great games that didn't cost an arm and a leg to produce, or to buy."

In other words, Brad Pitt and Michael Bay sell tickets. Hollywood is about stars and explosions, and the economics of box-office ticket sales tend to revolve around those needs. In games, Uncharted 2: Among Thieves costs $US60 because it cost millions to make. So Braid either needs to make the $US60 argument or pick up and move into the Xbox Live Marketplace.

To [analyst Jesse]Divnich , videogame math means something a little different.

"Either one is overpriced or the other is underpriced — and because games that only offer 20 to 30 hours of gameplay still sell incredibly well, I'd argue the latter. Some games offer such a value that they are clearly underpriced."

"I've always felt that pricing in our industry was completely arbitrary. Since few have challenged these price points, they've become cemented as a standard in consumers' minds; and deviating from the standard can be met with serious recourse," says Divnich.

Drop the price on a game below $US59.99 and it must mean the game's no good, or it's old, or it's on some second-rate system. Perrier doesn't cost more than gasoline per gallon because it springs from some fairy well, and BMW doesn't charge a premium over a similar Lexus model because of some alien tech discovered during the war. Both bottled water and premium sports cars cost a lot in part because the people that buy them expect them to cost a lot.

Translated into the game world, fans have pretty much drunk the pricing Kool-Aid and figure games cost what they cost.

"Because consumers are cemented on the $US60 price point," says Divnich, "The only way publishers can deviate from the standard pricing is by offering peripheral-based products and over-the-top special editions (e.g. Call of Duty, Guitar Hero, Rock Band). Which, I may add, have been tremendously successful."

That's right, Joe Gamer, it's entirely possible that games cost $US60 because some executive, at some point, thought it would be funny to raise the average price of a game by $US10 and no one complained. And we kept lining up at the game store with three twenties and a sock of loose change for sales tax.

- David Thomas

Weekend Reader is Kotaku's look at the critical thinking in, and of video games. It appears every Saturday. Please take the time to read the full article cited before getting involved in the debate here.


Comments

    Down in Australia we are buying games at prices up to $120 for a new ps3 or 360 game, the prices are rediculous considering how close the AU$ is compared to the US$ at the moment.

    It's unfair that we're paying double for new games when our dollar is over 85 US cents...

      While it's true that a few games have an RRP of $120, why on earth would you buy from a store that sells at this price? Look at JB, KMart, BigW and you'll find most new releases in the $79-$89 range.

      Even EB Games which is known for silly prices on games has made most of theirs in the $100 region - and they will do a price match to another store.

      Games with accessories aside (Guitar Hero etc), the most I have ever paid for a new release has been $89.

      yes you're right about the exchange rate, but you're forgetting that games are actually manufactured here in Australia.

      consider the following.

      We have a higher minimum wage (So the guys in the factory making the games are getting paid more).

      the cost of the materials may be different than in the US or china ect...

      and the pure fact that Australia is a much smaller market Distributors, Couriers and Retailers all need to make more off each sale because there are vastly fewer gamers here than in America. Everyone has to make more off less sales.

      Sure, that is all purely speculative, but not all that unfeasible really. And in all honesty if you pay full retail for a game then you're not doing your homework. Many retailers regularly sell games below RRP when they're released. Same goes with buying online.

      Paying up to $120 is fine for games like Uncharted, because its bound to last the ages.

      But games like MW2, I'd only consider it if its in the bargain bin at sub $50. Unlikely though, considering its popularity.

      Kinda begs the question why us Aussies put up with it. I know I try to either import my games, buy a digital copy or if I'm desperate for an on the release day physical copy, I'll grab it from JB. So many people just head on over to EB or whatever and buy it full retail though so, *shrugs*. Maybe some of us just don't know any better or have gotten so used to it, they just don't care.

        Yeah thats great if you live in a place that has competition.

        I lived in Bairnsdale for awhile and all they had was Dick Smith, K-Mart and EB. So there aint much choice in alot places that arent near larger towns with more variety.

        So sometimes you dont want to take a 4 hour train ride to Melb just to save a few dollars, or a 3 hour round trip in a car to another larger city..

        And not everyone can buy online....so yeah, sometimes its just a matter of circumstance that people have to go to places that have high RRPs.

    Silly US, even if 60USD is overpriced, it's not that bad.
    But I'll stop here before I go off on a huge passive-aggressive tangent at Australian video game prices.

    I agree that it is unfair, however i believe that we base our prices on the prices for games in Europe not the US

    Just quickly punching a few dollar amounts into a Calculator $120 * .85c is $102 US for a new game in Australia.

    If we paid $70 for a game it would be $59.5 US. So really considering they are shipping games here our price should be around $80 to $85 AUS or $68 to $72.25 US

    One of the reasons I go our of my way to never pay more than $100 a game. Not as hard as you think as long as your willing to shop around and not walk blindly into EB. Big W has Batman Arkham Assylum for $90ish, and I know Halo ODST is $80ish somewhere and Prototype is $75 at JB. Probaly more but these are the games I'm interested in. I am willing to pay more for more stuff like collectors Editions with good extra's. Looks like I'm Pre-ordering and paying full price for Forza 3, Dragon Age and Mass Effect 2. Why because of the extra DLC they come with.

      Prototype is $69 at gametraders and Big W sold ODST for $68. Hell, we at gametraders sold it for $77.

      If you shop around, you can find cheap games. It's just those ignorant parents or people swimming in money that just walk blindly into a store and pay the asking price.

      Oh well.

    In Australia it's cheaper to go online and buy games from half-way around the world than it is to buy them locally. Yes, even with the cost of airmail postage - it still costs less 20 to 30 % less.

    i seem to remember the generation before it was $50 US per game it was $40 US for new games

    Back in the 80s it cost arund AUD$60-80 for the latest release game for the Atari 400, so the current prices of around AUD$70-$100 per game doesn't seem that bad. AUD$80 in 1984 must be around a current price of $150 or so, and games cost a hell of a lot more to produce now than they did then.

    Also, remember that we pay GST, so a US$60 game with the excahnge rate at 80c comes out at AUD$82.50 which isn't far off what you can usually buy a new-release game here, and at one stage our dollar was down around 55c, the average for the past 12 months is around 72c which would make US$60 come out at AUD$91.60

    Although prices are becoming more reasonable it's not uncommon to pay $100 for a new game on release day. JB Hi Fi have been great at combatting this but compared to the US we still get screwed in Aus.
    The worst thing in australia is places like EB Games (aka Gamestop) who try and charge $110 for a new release title and $104 for a pre-owned title, Shame Shame Shame!

    The higher they price games, especially for aussies who can addup that us$50 does not equal aussie$100+, people will start turning to downloading off the net, buying only used games, or importing. After being sick of EB these last years, i changed to online import ordering, thankyou cdwow.com.au Average pc games are ~$50 aussie including postage. Ill happily pay for dozens of games at that price, but not a one at ~$100.

    What I want to know is why they still wanted $99 for Fallout 3 a year after it's release?
    Still, saying this, I reckon there's still more than $90 worth of value in that title.

    Yes, Aussies have been ripped off for ages but you can't just throw around "But our dollar's worth 90 US cents! We should get much cheaper games!" If retail pricing fluctuated with exchange rates, we'd have different prices every week. It's strong now because the US dollar is so weak, but this isn't a permanent situation.

    And yes, while we have $110 RRP for games, because of the wonders of capitalism, I've never had to pay more than $80 for a new release game for yonks due to retail/online competition. If you're one of those people who rocks up to EB on day one and plonks down 100 bananas on day one, you're either very rich or ignorant.

    And it's not just this generation, if you compare our games with previous Aussie gens, it's actually relatively stable. I remember $70 new release titles back in SNES era, so if you factor in inflation, $110 RRP* is a reasonable estimate. And this will continue to rise.

    Don't know about you Peter R, but I used to get all my Atari 2600 games for $20 a games.

    C64 games were typically the same but you could get them on special more often. You could often stack up on $2 games. Never had a Atari 400, but it sounds like a PC for suckers.

    The price of games is a little high, but I'd have to agree not completely without justification. Compare that to the Mac Pro I just priced - these can't be imported unfortunately cause noone outside Oz will sell them to us.

    US Price: $3648
    AU price at current exchange rate purchased in US: $3908
    AU price from any retailer: $6518

    Now every Mac I've ever owned was ordered online and I know from the parcel tracking that it was built to order in the US and shipped here after the transaction. That my friends is the Australian consumer butt-f$%k.

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