For the longest time, $60 has been the agreed upon price point for video games. However, the beginning of the newest generation of consoles have shown that change is always possible. Last year, the release of 2K’s annual franchise NBA 2k21 was met with a collective shock. The Series X/S and Playstation 5 versions would cost an additional $10, raising the price to $70 total.
Many fans of the franchise expressed their disappointment at the news, with some even calling to boycott the game over its use of microtransactions including a slot machine and unskippable ads.
But did this boycott work? Well VentureBeat reported on Take Two’s 3rd Quarter Fiscal earnings, “Take-Two said GAAP revenue was $860.9 million, compared to $930.1 million a year earlier. GAAP net income per share was $1.57, or $182.2 million, compared to $1.43 a share, or $163.6 million a year earlier.” VentureBeat also states that NBA 2k21 sold 8 million copies. NBA 2k20 ,meanwhile, sold 11 million. It is hard to say whether the boycott worked or not, 2020 was a rough year for us all, but it is undeniable that NBA 2k21 sold less than its previous title.
Call of Duty: Black Ops Cold War also announced that its Series X/S and PS5 editions would be priced at $70. So, in reaction, players argued against its new price. How did this affect sales?
Well according to Analytical Firm SuperData, we can see how Call of Duty Black Ops Cold War performed. Sales data reports claim it to sell around 5.7 million copies, making $678 million dollars in its first six weeks. Compared to its previous title, Call of Duty: Modern Warfare, it sold considerably less. As Modern Warfare sold the same in only three days.
The $70 price point is not just a trend among third party developers. One of the biggest signs of the new status quo is PlayStation, who adopted the new $70 price for their first-party titles. The PlayStation 5’s launch titles, Demon Souls, and Godfall both sold for $70. Jim Ryan, CEO, Sony Interactive Entertainment defended the change, saying that “If you measure the hours of entertainment provided by a video game, such as Demon’s Souls, compared to any other form of entertainment, I think that’s a very straightforward comparison to draw.”
To see what Jim Ryan means, look at the length of some of these games. In fact it is notable that video games have become far longer than they have ever been. What once was considered long, could now be considered half the length of modern video games that ask you to stay for hundreds of hours. So his argument to move to $70 isn’t completely wrong.
Xbox Games Studios have yet to announce if their first-party titles will also cost $70.The biggest title for Xbox in 2021 is Halo Infinite, and that has yet to reveal its price.
Nintendo has also yet to announce any plans for a $70 price tag.
All this is to say, is the new price tag a short-live trend or will it remain? The video game industry has seen price hikes before and the Xbox 360 and PlayStation 3 increased the price point from $50 to $60. Is it now time for the next price hike?
Well, increased budgets brings an increased need for profits and video games have become much more expensive to make. With bigger teams, better technology and larger ads; video games need more revenue than ever to produce a profit. But is it justified? To better understand why this change has happened let’s talk inflation.
As previously mentioned, $60 wasn’t always the standard for video games. Before that, $50 was the agreed upon price. For example, we’ll use 1998 as our starting point, as it is the beginning of the sixth generation of consoles (i.e. PlayStation 2, GameCube, Xbox). $50 in 1998 is surprisingly closer to $80 in 2021 making todays purchasing power weaker than back in 1998. Back then, games were less expensive to make as well, but with the aforementioned budgets being put into these games that has quickly changed. While early gaming systems used cartridges – which were and still can be more expensive – disc games also experience this rise in prices. The simple answer to why is merely profit, which is understandable to anyone.
So with the decade-long stagnation of the $60 price tag, it was inevitable that the industry would make the shift to $70 sooner or later.
Source: Photo of growth of video games cost by VentureBeat
As the next generation of consoles and video games starts and progresses, it seems that history once again shows us the trends that continue on. It may have took some of the largest publishers in the industry to start (Activision, 2k, Sony Interactive Entertainment), but the age of $70 price tags has started and will likely shape the future to come.