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1485680cookie-checkPublishers Gear Up Increase Game’s Cost To $70 Next Generation
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Publishers Gear Up Increase Game’s Cost To $70 Next Generation

Alas, here we go again. Once again, the video game industry is attempting to increase the cost of a new game by $10. With ambiguous claims of unspecified increases to development cost. Currently, only NBA 2K21 is listed with the increased next-generation price tag, but more are likely to follow the example if they sense there is no blowback or that the scheme itself can be successful.

Defenders, as seen above, are already utilizing the prior debunked argument of economic pressures, to justify this anti-consumer move. Ignoring that as production values have increased in gaming, so to have the tools available to meet those demands have improved and decreased in costs. Developers 20 years ago would consider the tools available to developers today to be a godsend, especially with Unity and Unreal Engine being free to download, and an innumerable amount of assets available for each engine pipeline to reduce the costs of asset propagation.

Then there is the simple economic reality that digital distribution has decreased the cost of video game distribution and increased returns per sale, as noted in a piece by Metro, where they revealed that EA is making more money from microtransactions than actual product sales these days, meaning they’re making more without having to spend more.

The anatomy of a physical sale is not great for publishers, as detailed by the Los Angeles Times. For each $60 sale, a publisher can expect about $27. Whereas with digital distribution for every $60 sale, a publisher can expect $42 after the console manufacturer and sole proprietor takes their 30% cut.

Industry insiders like Former Playstation executive, Shawn Layden, have presented a similar argument for increased game cost.

“It’s been $59.99 since I started in this business, but the cost of games have gone up ten times. If you don’t have elasticity on the price-point, but you have huge volatility on the cost line, the model becomes more difficult. I think this generation is going to see those two imperatives collide.”

“[AAA development] won’t be less expensive than the current generation of game development,” he said. “4K, HDR art and creating worlds don’t come cheap.

“All the costs around gaming are labour costs, right? You don’t have to build a factory. You don’t have to turn sand into glass. It’s just creativity and your ability to bring like-minded people together to accomplish something, but it’s all based on the people… Those are all the costs associated with it.”

Except here is the problem with his argument. The majority of a publisher’s budget does not go towards development. Typically administrative and marketing rival or in some cases – see Activision- far exceed the funds allotted to development, as was revealed years ago when a budget sheet from Electronic Arts revealed they spent more on marketing than development costs. Meaning each sale goes more towards funding the administrative and marketing sides of the business than it does paying the developers.

Keep very much in mind development budgets for acompany’s financial statements is divided between many different projects. Comparing the budget of a single project to just the administrative budgets of companies demonstrates an expansive difference.

Then there is the issue of unearned multi-million dollar bonuses executives get paid. Administration doesn’t produce. It either directs, or it optimizes. Rarely are these bonuses earned, let alone deserved.

It is not the consumers’ responsibility to pay for the corporate bloat or mismanagement by out of touch elitist executives.

Hopefully, this will play out as it did the last time the industry attempted to raise prices on video games. One company will try, only to fail miserably before having to apologize for the stunt. Then the industry will grumble and attempt to find new ways to monetize the experience aside from just producing in an optimized fashion, excellent and varied products.

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