Side Quest, Episode 2: A Tough Question (Are Retail Video Games Too Cheap?)

I can’t complain. If we keep getting a good number of high quality games like these past 2 years then I’m okay with that.

John Burleson

That's true, but the cost to make games is also exponentially higher now than it was then.

Colin Moriarty

Good news: You're gonna be paying more for games next generation. =)

Colin Moriarty

Enjoyed the video, the only thing I would say is that there are a lot more games sold these days, which would counteract the price increase, a popular game twenty years ago might have sold 500k to a million copies, a popular game today will sell 10+ million

Trevor Booth

I believe that games are too cheap. They have not increased in price with the economy. I purchase and play greater than 25 games a year and I would be willing to pay $80 for the base price, or $100 with a season pass, for brand new games. However, I also realize that everyone’s budgets are different, so some balance must be found.

John Burleson

It is very early like you said so it might be wise to wait. I just think we are all surprised how well it is doing.

strawhatninja

My point isn't that games won't sell at $70-$80, period, but there will be a decrease, and I'm not sure companies will risk it when many players are already paying over $100 when you add in bonus content.

Josh Squires

Thanks for the reply. I think we are saying the same thing, but you might have to school me on the statistics (I may be misinformed). The percentage of consoles (or console owners) that purchased the game is exactly as you describe. My understanding is that games like Mario 64 had a much higher attach rate than some of the best sellers on PS3 or PS4. Mostly because there were so few games AND the games were that much more expensive (the great games were the investments consumers were willing to make). My thought was that I’d like to have this fleshed out more in the discussion, since I don’t know the stats, but I imagine it’s a large difference between console generations (and might be influencing the cost)

Ryan Berry

Weird, I just said your first point above. Great minds!

Colin Moriarty

It's weird, because the Season Pass model already does that... it's just that the content isn't ready for launch. I think that Cyberpunk could have the potential to be a game that blurs price points and really charges a premium that people are willing to spend, and glad that they did.

Colin Moriarty

The only counter point to make is that the “original content” of Netflix and HBONow is day one and maybe better than you can get buy paying a premium for the one time only showing of a non-Oscar quality movie. So they maybe a model that supports both Naughty Dog’s award winning once a year blockbuster that costs $100 and a subscription model that support AAA content delivered in a different backed by the big two/three

Brian Fuller

You're not describing attach rate correctly (or I'm misreading you, so feel free to correct me). Attach rate is the number of games sold on a console divided by the number of consoles sold. I don't have attach rate statistics for anything before the PS2 era, so feel free to point me in the right direction, but I doubt the attach rate on NES or SNES was higher than it was on PS2 or PS3, not only because games were far more expensive in both contemporary and inflation-adjusted terms, but because the lifecycles of consoles were shorter.

Colin Moriarty

I truly believe that we could get to a point where you'll get one without the other (hopefully in the way you described). But it'll take discipline.

Colin Moriarty

I'm glad the blanket bit made you laugh. =) I worry about studios like Machinegames, not only because it seems like Wolfenstein II sold softly, but because these really magnificient games they're delivering are, as you alluded to, following an antiquated model. As the Destiny-ization of gaming continues, people will have less time to spend on other, different games, and time is its own valuable currency in the pricing debate.

Colin Moriarty

Your point is valid, but gamers on a budget (like you) or gamers who don't necessarily blaze through a ton of games or buy a lot of games (like me) aren't the ones that are driving market forces, just like we're not the ones driving the viability of microtransactions. The bulls will drive the trend, not the bears. Are the bulls willing to buy a game for $70 instead of $60? Are they willing to even go to $80? I bet you they will, and I bet you they'll sacrifice other hobbies to make up for the shortfall, if necessary. Remember: SNES RPGs were $70 and $80 in 1992 and 1993. Onimusha on PS2 was $50 in 2002. The Witcher III was $60 in 2015. Something doesn't add up.

Colin Moriarty

What fascinates me about the idea of a streaming games service run by one of the two Big Guns is that, theoretically, the pricing should work out, just as the pricing works out in spades for the likes of Netflix and Amazon Prime, which both charge absurdly low prices. The thing is, those services are in exchange for "free" movies, TV shows, and the like that aren't the newest and latest. For a streaming service to be viable, it needs to include day-one goods, and that means the cost is going to be far higher, if it's even possible at all. Otherwise, what we have is PlayStation Now, and, well, that already exists.

Colin Moriarty

Skepticism or not, game prices are going up next generation. To $100? Certainly not. But I can see a jump to $70 at the least, and reasonably, even $80. We shall see! The market will ultimately determine the outcome, but will people really walk away from gaming if they have to pay $10 more for a game? I'm doubtful. Price hikes have happened many times in the past, and, as I said in the video, games were so, so, so much more expensive back in the cartridge era. Yet, people still ponied up.

Colin Moriarty

I wanna do something with Switch soon, but I'm not sure what to say yet. I think its trajectory is very promising; I also don't know that it has the games in the pipeline to keep this momentum up. That said, you could easily say the same thing about Wii.

Colin Moriarty

Certainly agree in theory. I think the interesting challange is actually persuading the internet. If CD Projekt Red want to sell Cyber Punk at $100, i'll trust them. They have credibility. Frankly though it could be quickly lost. Look at Mass Effect, the trilogy are my favourite games, I love them and paid for all the DLC. However after Andomeda and the enjoyable but mediocore Dragon Age gamesI don't think i'd be willing to risk a $100 dollar purchase on Bioware or EA. For me at a $100 price point i'd be hard pressed to take a risk on something, I probably never would have played Persona 5 or perhaps even Horizon: Zero Dawn (my game of the year). For me the price point would need a fw things. 1. Track Record. 2. Good Reviews. 3. At least a 40 hour preferably 60+ hour play time.

Always86

I would actually spend $100 on a AAA title if it included all DLC and all the content for it. I really would rather just pay that and get the full experience than $10-$15 here and there for DLC. I think if not move to that have that as an option for the consumer to choose.

Eric S

Great discussion. Something I think you missed here is the attach rate gap between old eras and new eras. The attach rate (% of sold consoles with a respective game purchased for it) was much higher then. On one hand, that means they were less profitable but on the other hand there’s a high risk/high reward for publishers now. GTA5 still sells top 10 each month, and has absurd ROI in hindsight. Something to consider; would like to know the community’s thoughts.

Ryan Berry

At this point I'd rather have varied price points over micro-transactions and loot boxes. But publisher's would rather have an unlimited cash flow, and there is the reality that there's only so much money to go around and higher prices would mean less games purchased.

Jess J

The fucking blanket bit made me laugh harder than I have in a while, classic Colin. Anyways, I loved the video. I've always enjoyed your theory of exploring the price scale. I think there is definitely room for dense worlds like The Witcher or Horizon and massive service games like Destiny and presumably Anthem to aim for the $100, while games like Hellblade to exist as a smaller budget, shorter length game for a $20-40 price point, as they can allow for tighter narrative experiences similar to that of an 8 episode Netflix series. Unfortunately it seems like every game is trying to be the next Destiny of their respective genre, and plan these massive, overly-ambitious budgets and teams accordingly. Do you think in your more reasonable future of flexible pricing and size of games, would a studio like Machine Games make a Wolfenstein game with the same focus on game play and story but cutting back on cinematics and marketing for a $40 price point? Or would they simply continue producing blockbuster experiences? Anyways, love the show, keep up the amazing work, thank you for all that you do. Have a great week!

Chris Nelson

Great episode Colin. Personally, I don't think the price of games need to rise to support the industry. I'm not an economist, but I know if the cost of a game goes up then the unit sales will go down. I just recently saw that The Octopath Traveler is going to retail for $60 dollars. I've played the demo and decided that I will buy it, but for a small studio with a small budget, that's a huge pill to swallow. I'm only concerned that this price will hinder the total units sold. Another point on this topic is regarding depreciation of game prices after release. I could be wrong but I remember seeing games in previous generations dropping in price months after release and less so now. Remember greatest hits? Hell, even digital games like The Witness is still $40 after two years and popular games like Overwatch will likely not be reducing its price for years. For myself, a gamer who lives on a budget, that means I will buy less games every year if costs go up. I'll be paying the same costs, but I'll be consuming less.

ToastIX

The economics of the situation should play out. It may be that there is little price elasticity in the AAA game market. There CAN be a lot of influencers on price elasticity, but in this case I would suspect that the biggest influencers are that this is a product that people buy with expendable cash (which you have shown is in shorter supply) and other entertainment source options such as streaming services and mobile gaming offer alternatives at much lower prices (and debatably more value on an hours per dollar basis). I agree there needs to be more experimentation in the pricing models, development scope and scale, and even service models. Microsoft is doing something really interesting that could be amazing if they keep pushing their games on demand service to model the revenue capture and content generation to be similar to Netflix. If I could pay $x a month to play all the latest games for as much or as little as I wanted I would pay more for that service and probably prioritize it over other entertainment options. It also would push content/games devs to be creative again to stand out rather than playing it safe or pushing gimmicks to squeeze the consumer. Without the pressure to nickel and dime consumers devs could focus on creating the best experience they can to be more attractive as a long-term partner for a subscription model based distributor. A subscription based model would likely drive a boon in quality much like it did for TV.

Brian Fuller

I'm somewhat skeptical that most people will be willing to pay $100 for a game. The good part about DLC and micro-transactions (when they're done right) is that it allows those who are willing to pay that to do so, while still gaining needed revenue from the people who can only afford a $60 game. I'm just not sure the price increase makes up for the people who won't or can't buy those more expensive games.

Josh Squires

Colin, I agree with you that games are cheaper than ever. I would be fine with publishers charging different prices depending on the game. Also this is off topic, but I wondered what you think about the current trajectory of the Nintendo Switch and what it means for the future of gaming. Currently the switch is selling very well, and the games are doing so well that publishers are rushing to get their games on that platform. Does this mean that graphics are overvalued and players care more about game play/convenience as a whole? I’m curious what you think, and maybe it could be a future video?

strawhatninja

It's smart to pay what you think something is worth. If you can wait, you're going to get great deals!

Colin Moriarty

The power of the wallet is extreme.

Colin Moriarty

The question is whether a trade-off is lucrative or not.

Colin Moriarty

I don't know Jim's entire argument, but I'd say that there's a major difference between Final Fantasy XV and Hellblade in scope, production value, and ambition. Obviously, many triple-A games are mismanaged, ill-developed, and turn out poorly. But that's not always the case.

Colin Moriarty

To be honest I buy most of my games on sale digitally from PSN. Once in a while like with Arkham Knight, Metal Gear Solid 5 or Skyrim VR I'll go full price but it's out of my budget in general. The level of price I'll pay goes game to game, depending on how much interest I have in it. Games like Overwatch, Uncharted 4, or Horizon New Dawn I paid on a good next tier down sale price. But there is no way I need to buy them and play them on release. That's never the case for me. My take is if that I like them and may have felt I underpaid I'll buy some DLC, which will even it up. I've bought games like Doom and Tomb Raider on PC and PS4, both on sale, and I think the developer got their money's worth from me from them. It's just a case of adjusting to what is available when and buying from places that will pass on the sale to the developers/publishers.

Peter Campbell

Great ep Colin! Ive always said that people have the power here. Instead of complaining that games are too much at launch, don't buy them. Wait until they reduce in price and buy when your perception of value (eg game length, quality) meets your financial situation. If you think $60 is too much for a 10 hr single player game fine, wait until it's cheaper. The problem is that people (for some reason) feel that the purchase is forced because they confuse need with want. No one NEEDS a new game. They WANT them. And that's fine, but if they aren't in a position to afford them, that isn't the industrys fault. Also too, what a lot of people dont get is the oncosts associated with retail games (eg cartage, physical production etc) that drive up the cost that needs to be covered somewhere.

Smokey Joh

Loving the new series so far! One issue with increases prices is going to be the devs still including b.s. DLC and microtransactions. I can't see them leaving money on the table

James Little

Hey Colin, what do you think about Jim Sterling's argument that says that triple A titles are not efficiently developed? As in the budget should actually not be that outrageous? Is there some truth to it? Does Square spend too much when developing Final Fantasy XV? Have the guys that developed Hellblade proven that you can actually develop triple A at an affordable cost? Is it impossible to compare studios and situations? Just wanted your thoughts regarding those comments, beacuse I had never heard that argument before. Glad to have you back with gaming and history. Keep up the good work.

LiquidEnder

With each dev and each game, it's going to be case-by-case. Some devs (and publishers) will have to put up or shut up; others will sink or swim based on the value proposition. I think it's purely market-driven, and I'd love to see how it plays out.

Colin Moriarty

Sure, it's true, but perhaps we should go a step further and just make Madden, NFL, FIFA, et cetera, games as a service. One sum to get in; lots of microtransactions to update rosters, get new modes, et cetera. These guys have to start experimenting before the market overtakes them. Remember: SEGA dominated Madden a little over a decade ago with a football game that cost literally $20 at retail. The only way EA won that battle was to acquire NFL exclusivity. Food for thought.

Colin Moriarty

There's a major difference, in my mind, between the games (and types of games) you're talking about. you brought up the No Man's Sky example, which is a great one. A small team took years to make this gigantic game that "could have" and come from a triple-A studio with a staff of 100 people. Yet, it didn't, and it showed. It had the gloss of one of those games, the veneer of one of those games... but it wasn't one of those games. It was a gigantic turd, really. Imagine what a team with more size and means could have done with the idea? The games you're talking about, from Hellblade to Cuphead, are great, but they aren't on the scale -- nor do they have the highest possible production values -- for there to be a correlation, at least in my mind. A game like The Last of Us isn't going to come out of an indie studio with 20 heads.

Colin Moriarty

Thanks! I will. I love the track, too.

Colin Moriarty

Why pretend? It may just be the truth. =D (Glad you liked the episode!)

Colin Moriarty

Well, the Atari 2600's reach was 20 million, and NES' reach was more than twice that, and will be greater than Xbox One's reach, when all settles. That said, your point is taken. Thank you for watching!

Colin Moriarty

Your mention of The Witcher 3 was extremely appropriate in the context. CD Projekt Red has been raising the bar for over a decade now in terms of technical performance, content and sheer quality of presentation. They should be the tip of the spear for raising prices to $80. I'm sure their loyal fanbase would follow, and not without good reason. I see Bethesda doing the same with a similar justification, but their quality assurance would have to be much tighter, given their history. Otherwise the backlash could jeopardize such a movement and put the gaming industry in peril by further paralyzing other developers from following suit.

Tom Breiter

Although I agree with most of what you are saying Colin, I have to say that publishers and scared shit-less about setting a precedent with lowering price for titles like say Madden because if it doesn't work out, it will be a pain for them to reinstate it at $60. Also, as you know, pricing is so volatile these days a mere weeks after a game is released that for them to sell a game for $40, when they could sell it for a few weeks at $60, is just something that will be very hard for them to do.

JMR

The problem with the AAA publishers (not the devs) telling us games require teams of hundreds and budgets in the millions is we keep seeing indie games come out with from teams of a dozen, or even one or two people and yet have game play and value equal or better than allot of AAA games. I think we're also seeing people appreciate these more with the success of games like Hellblade, PUBG, Cuphead, and Hat in Time... That said, I have no problem paying more for a game that is worth it... but it won't take to many games like Battlefront and No Man's Sky to burn me back from that.

David Ouillette

Great episode, Colin! Hey, tell Ramon & Team that he absolutely slayed it with your retro-game inspired remix to your outro theme. Simply Excellent!

Alex Castellanos

Another amazing episode! I’d like to pretend he’s naked under that blanket. Made the episode even more enjoyable. I wouldn’t mind paying more for games if we get more experiences like those from Bethesda and naughty dog.

Thanks for a great episode. You didn't bring scale of the market into account which is a major driver in games. The cost to manufacture is almost non-existent today, while the cost to design, is off the chart in comparison. Remember, titles have the option to sell onto every console and PC today, that wasn't an option back then. The atari or nintendo was targeting a market of hundreds of thousands, not hundreds of millions. While this introduces small incremental costs it opens exponential revenue streams. I'd argue when accounting for this games may be over priced, at least the majority of them. TW3 or Skyrim can and should command a higher price, but very few AAA games can even hold a torch to those.

Chris Holtzer

Yeah, I concur. There were way more triple-A (and double-A) studios when game pricing was more in line with inflationary trends, what was actually on the disc or cartridge, and when manufacturing became suddenly cheaper with the advent of digital media. It's sad, but it's also true: Gamers need to put their money where their mouths are, or the entire cycle ends.

Colin Moriarty

Good on you. The Witness is another example of a game that explored that in-between space. What I'm most curious about is game pricing going up, however. We shall see!

Colin Moriarty

Thank you for watching! Glad you enjoyed.

Colin Moriarty

I suspect they're gonna use the next generation of consoles as the excuse, which is fine with me. Has to happen at some point.

Colin Moriarty

It does work but many of us lament the loss of the single player game (story based etc). Well that specific type of game just can't last in this market. So unless you simply just want games like Overwatch (games I specifically have zero interest in), and less games like Witcher 3, then we have to accept that the financials aren't there and being open to a change. Even in the case of GTA 5, probably the best selling single player game, they probably haven't released more single player content like they did with 4 because the online micro transaction stuff in the online mode is so profitable. This is a real shame.

CTE

All you have to look at is the number of studios that have closed down, especially in the AAA space. You constantly see gamers defend current prices by the number of gamers increasing, but if that were at all true, then these studios would not be shutting down. It seems to have slowed a bit but that is likely because there are so few AAA studios left at this point (and the ones that are left are owned by big publishers that can afford a few flops like EA).

CTE

Well delivered, cogent argument. Appreciated the data driven approach. Devil’s advocate - I think the current model with a $60 Base and MTX/DLC is best of both worlds. People get a low barrier to entry, and publishers and devs make their money. The publicly traded video game companies are surely doing well with the current model, of their financials are to be believed.

Brett Geiser

I bought Hellblade on both PS4 and Steam for no other reason than to support the business model- a short, tight, AAA quality game for half the standard price is something I’d like to see a lot more of.

Marc Boggio

it blows my mind that Mario 3 is only $10 more than Mario Odyssey. The hike is coming. I feel bad for everyone who wont be able to pay for this hike.

Joey Finelli

Thanks for another excellent episode Colin! Keep em coming

Brock Thomas Walsh