Why Next-Gen Titles Cost $60

Heartless Gamer writes "Forbes.com has up an article detailing what goes into the $60 price tag for next generation games. Publishers get about a buck per copy sold. 'The remaining $59 per game goes into many hands. The biggest portion — nearly 45% — goes toward simply programming and designing the game itself. Then the console maker, retailer and marketers each get a cut. Add in manufacturing and management costs, and depending on the type of game, a license fee. Some gamemakers also have to pay a distributor to help get their titles in stores.'"

What about Wii?

[jZnat]

Then how can you explain why Wii games only cost $50 still? I blame the increased graphical power of the 360 and PS3 which increases the development costs due to the developers' (or publishers?) need to utilise all graphical power available.

Re:What about Wii?

[Vandilizer]

Simple you want to know why Wii games cost less!

They are the only ones who are not subsidizing the price of their consoled with the games that they are selling!

Sony takes about $150 hit they need to recap!

Pay for it now, pay for it later in the end you are still paying for it! I for one do not mind paying a bit more now to save later!

Re:

[Itchyeyes]

Nintendo takes just as much a cut of the game as Microsoft and Sony do. The reason Wii games cost less is development costs, plain and simple. A game like Wii Sports, or even Twilight Princess, costs substantially less to make than something like Gears of War or Oblivion.

Re:

[Chmcginn]

A game like Wii Sports, or even Twilight Princess, costs substantially less to make than something like Gears of War or Oblivion.

True... but how does the cost of porting Oblivion compare to the cost of creating Gears of War? Or even Twilight Princess, for that matter.

Re:

[Itchyeyes]

First of all, Oblivion wasn't a port, it was developed for the PC and the Xbox 360 at the same time. However, developing a game for multiple systems is even higher then simply developing for one system, since in addition to the usual costs there's the cost of coding the game for the second system. Obviously, the benefit is that you get a larger install base to sell your game to, but the total cost of development is still higher.

Re:

[Itchyeyes]

It's only irrelevant for blockbuster games, where the added sales far outweigh the cost of porting to a second system. For games with more marginal sales it's a valid consideration. Porting a game to a second platform may increase the overall sales of the title, but the added cost of moving to that second platform might decrease your rate of return on your investment. From a business perspective it might be better to invest that money in another game instead of in porting an existing game. It's somethin

Re:

[bendodge]

That makes sense. I am a hobbyist game developer and have always found that programmers are a dime-a-dozen. Game art (esp pixel animation) is hideously expensive.

Re:

[deuterium]

The tricky difference between securing a good programmer and a good graphic artist is that you can judge the skills of the artist fairly directly. Does their stuff look good? Great.

With programmers, though, unless you have fairly extensive technical skills, or someone else with said skills doing the hiring, you can't be sure what you're getting. If the person you interview knows just enough more about programming than you do, it's hard to say that he's incapable. People pad their resumes and embellish thei

Re: Cost =! price.

[trdrstv]

The reason Wii games cost less is development costs, plain and simple.

No. There is no direct correlation between development costs and consumer price.

If it did you would have non-standard prices that would vary wildly. Do you pay more to see a 'summer blockbuster' that cost 200 million dollars [to make] than an independent film that cost $5 million?

The developers have standard price points and they set their price and development budget to a level they feel they will make the most profit.

Welcome t

Re:

[Itchyeyes]

There is always a direct correlation between the cost to produce a good and the price of a good. The only reason games were generally set at $50 previously was because it was an agreed upon price by the developers, publishers, etc... If developers were not able to recoup their cost at that price then they would not have agreed to sell at that price, plain and simple. Even still there were plenty of games sold at "non-standard" prices. Limited editions went for $55 and $60. Do you think they put those o

Re: Cost =! price.

[trdrstv]

There is always a direct correlation between the cost to produce a good and the price of a good. The only reason games were generally set at $50 previously was because it was an agreed upon price by the developers, publishers, etc... If developers were not able to recoup their cost at that price then they would not have agreed to sell at that price, plain and simple.

If their is any coorelation between the cost to produce a good and the price of a good, it starts with what the customer is willing to pay. The cost of the final product to the consumer dictates the development costs and not the other way around (otherwise the market would not support it).

The Fact that Gears of War cost more to make than Dead Rising didn't mean it debuted at a different price. They were priced equally to maximize profit on each. Gears sold amazingly well, but would not have sold at a $99.95 price point simply because it cost more to produce. We as the consumer don't care how much it cost, we care about the value added to us, and what we are willing to pay for that.

Likewise, games that were easier to develop, like Katamari Damacy, often went for $40, $30, or even $20.

Lower development costs help a publisher's ability to do that, but it was priced lower to make it more attractive to the average buyer. If a Mario game, or Harry potter game cost the same to develop as Katamari it wouild still be priced higher than $40 since that is what the market will pay.

Furthermore, games were almost never sold at $50 for their lifetime. Once publishers have exhausted the amount of people who are willing to pay $50 they generally drop the price to attract customers who are more price conscious.

Exactly, and this works reguardless of initial development costs. Once the publisher has exausted the maximum profitability of the higher price point, they lower it to bring in more people. That's why you typically have a step down in pricing (from $50 to $40 to $30 to $20) rather than simply cut the price from $50 to $20, because you are optimizing profit and brining in new people at each level.

Re:

[7Prime]

Yet your (b) reason just goes to prove his point. Similarly, the reason why games like Katamari are around the same price as FF12 is because people who buy them view them as not having THAT much different entertainment value. We're used to media having relatively flat rates, because there's no accounting for taste. If people don't like Katamari, lowering the price to $20 isn't likely going to make them pick it up, but pricing it at $39.99 will likely get MOST of the people who would have bought it for $20.

Re:

[Garridan]

For independant game designers who make shareware games, price probably depends directly on development cost.

For the heavy hitters, development cost is a function of price, which is a function of demand. A game designer comes up with some idea, and passes it onto marketing. Marketing does some research, and finds that x gamers would be interested in a certain type of game. Then, with some simple calculus, find that y games will sell at a price of z for maximal gross sales of yz. Subtract out the pric

Re:

[Kevin DeGraaf]

Easy!

On!

The!

Exclamation!

Points!

There!

Dude!!!

Re:What about Wii?

[MS-06FZ]

Then how can you explain why Wii games only cost $50 still? I blame the increased graphical power of the 360 and PS3 which increases the development costs due to the developers' (or publishers?) need to utilise all graphical power available.

I disagree. More likely it's due to the Wii hardware's close kinship to the Gamecube. Developers familiar with the 'cube can take advantage of their existing skills - much like GBA developers could with the DS. The same applies to some extent to the PS3 and XBox 360, too, but those machines are much more distant from their predecessors in terms of capabilities.

But there's also this: in the end, they don't charge you what the game costs, they charge what you're willing to pay and then distribute the monetary yield. The Wii is an economy system, whereas the PS3 and XBox 360 are more high-end gear, (and with more "loss-leader" money to recover) so the game titles are priced to match.

Re:

[Itchyeyes]

You can disagree all you like, but you'll still be wrong. Take a character model from Wii Sports and a character model from Gears of War, which one cost more to make? You can give Epic the best tools in the world and all the experience they could want with the XBox 360; it's still going to cost more to make Gears of War. You need more designers, more coders, more artists, better equipment, etc... That's just the way it works. That's the way it's been for the last 2 decades.

Re:What about Wii?

[nagora]

You need more designers, more coders, more artists, better equipment, etc... That's just the way it works. That's the way it's been for the last 2 decades.

You're absolutely right, and that's a big part of why I didn't buy a console for 2 decades until the Wii arrived. I want enjoyable games, not tedious movie-wannabes or, even worse, pretentious dross by programmers who want to be "artists". That approach just means sinking the budget into visuals instead of game design.

Cheap and fun beats high-definition dullness every time.

TWW

Re:

[nuzak]

It's great that you enjoy that style of game, it really is. I liked Katamari too. But none of us are really interested in your two-minute hate against fancy graphics. I bet God of War cost a lot to do the graphics on (and yeah, it's a last-gen title, but there'll be a GoW3). And guess what, Kratos wouldn't work as a Mii.

Re:

[LordRobin]

And guess what, Kratos wouldn't work as a Mii.

Sez you! I'd love to see a super-deformed Kratos rampaging through the Mii Plaza, decapitating Miis left and right!

------RM

Re:

[miyako]

Not to completely disreard your point, but sometimes it is substantially more difficult to create lower polygon models of things. Yes, games for more powerful systems often have more art assets- and that can correlate to more cost to pay artists- but at the same time there are certainly cases where a more powerful system means that artists and programmers don't have to spend as much time optimizing.

Re:

[MS-06FZ]

You can disagree all you like, but you'll still be wrong.

Blow me. Like you're Mr. Industry Analyst and I'm just the know-nothing feeb? Don't be a prick, we're both just armchair quarterbacks here.

If you want to talk about effort required to make models - Miis are a special case as they're rather simple. But people don't want that in all their games. They don't want cartoon characters in Red Steel. If you're going for a complex look, it's harder to make a good-looking low-poly model than it is to make a good-looking high-poly model. Game designers have, of

Re:

[RyoShin]

That's the main reason as far as I know. If companies kept their graphics at the height of the PS2/XBox generation, they would quickly be slammed by all video game media as having "lack-luster graphics", despite the fact that they might be able to then offer those games at $45 instead of $60.

A big reason a lot of previously-exclusive PS3 titles are going multi-platform or jumping ship altogether is because of the substantial increase in development cost for the PS3, combined with the very slow sales of the

Re:

[MBraynard]

MS's own 360 games cost $50 still.

Re:

[CastrTroy]

A better analogy. I don't see Dell getting a cut when PC games are sold. I don't think that the designers of the console should be entitle to anything. However, with this model Nintendo would still do well as they don't sell the console for less than it costs to manufacture, and they have a lot of first party games that sell quite well. Sony and MS would have a much harder time making ends meet if they didn't get a cut of every game.

Re:What about Wii?

[krlynch]

I don't think that the designers of the console should be entitle to anything.

They're not "entitled" ... the companies have simply established a mutually beneficial business arrangement that you're willing to pay for when you buy a game. Nintendo sinks money into developing a console, in the interests of making money. The software company sinks money into developing a game title, in the interests of making money. The software company pays Nintendo to license the Wii name and logos for marketing and sales purposes (you know, so they can say the game is for the Wii), and to get Nintendo's technical assistance and expertise. That serves the software house's interest, as it allows them to sell more games, and hence make more money. It also serves Nintendo's interests, as they also make more money. You're free to go ahead on your own and develop and market a console game without the help of the console manufacturer ... but you aren't going to make a whole lot of money without their assistance and logos. Really, how many people are going to spend money to buy a game for a console when the box doesn't say it's for that console? Bloody few....

I don't see Dell getting a cut when PC games are sold.

In this instance, there's no mutually beneficial business arrangement that would dictate that. The correct comparison would to Microsoft getting a cut for each PC game sold. And they DO get a cut (of a kind ... I don't know if they get an actual slice of money per box), in that they license their Windows logos and tools to developers in another kind of mutually beneficial business arrangement.

Re:

[MaverickUW]

They actually have.

The scale of how much money goes back to the console maker is a sliding scale. Last generation, several high profile games came out on Gamecube for $40 instead of $50. Nintendo lowered their own royalties so that publishers would be more willing to take a smaller hit by offering the game cheaper, but likely be able to sell more units. If you have a $20 title, it pays less royalties because it's sold for cheaper than a $50 title.

Of course, there's also Virtual Console to deal with...

Re:

[MBraynard]

I don't think that the designers of the console should be entitle to anything.

The spreadsheet that is made to determine whether or not a project goes forward considers many things: both the upfront revenue and future revenue. All of this, minus costs, get calculated into a NET PRESENT VALUE.

If the net present value, minus the liscence fee that you don't think should exist, was not sufficient, the company would either not produce as good a console or not produce the console at all.

It doesn't MATTER if a

Re:

[Applekid]

Typically, the console manufacturers will produce the games for the publishers. The fees the publisher pays for this service will vary based on how many they make and whether the title will be exclusive to the platform. In return, the manufacturer will produce the discs/cartridges and that media will work in the console. In that price is their "cut".

Re:

[Blakey Rat]

It's an interesting market. The console makers get a "cut" because they hold the keys to the car. Without using Microsoft, Sony or Nintendo's encryption on your disk, it's unplayable on their console. Slashdotters hate DRM. (And stop winging on about Nintendo being so great, the reason the Gamecube disks are so mutant is specifically to make them hard to copy.)

The console makers generally charge a fee to publish the game on their console, but then they spend this fee in additional testing and QA for the gam

Re:

[Fozzyuw]

Microsoft has teams of people QAing non-Microsoft games to meet minimum established standards of quality.

Indeed, this was around back with the NES. They called it the "Nintendo Seal of Quality" [wikipedia.org]. Basically, back then (as I remember it), the developers had to pay for this seal or the game was not allowed to be published on the NES.

That's the skinny on it anyways. Nintendo would claim that it means their 'standards of quality' but that certainly wasn't the came for many, many games at the end of the NES

What about microstudios?

[tepples]

Yes, if you want to develop a game on "system X" you have to pay "company X" some money. Think of it as a license fee.

If a license fee is the price of admission to play on monitors larger than 19 inches diagonal, then where can a microstudio with a working PC-based prototype of a video game get the money to pay this license fee?

Re:

[tepples]

In Spain Wii games cost 60

There are three issues at work here:

• In Europe, sales taxes are higher than in North America.
• In Europe, sales taxes are included in the advertised price, unlike in North America.
• Europe is geographically farther from China and Japan than North America is.

Re:

[rjung2k]

"not to downplay the Wii, I think its a really fun system, but most of the games simply aren't as feature filled."

If that were true, then feature-filled Wii games should be expected to cost more than $50. And yet I can find feature-loaded titles like Sonic and the Secret Rings (all-new for the Wii) and The Godfather: Blackhand Edition (with new Wii-exclusive missions and career paths) at the same $50 price point.

Inflation

[UbuntuDupe]

Easier explanation:

-Why did next-gen titles five years ago cost $50?

-Now, take that answer and apply inflation for five years.

1.1^(1/5) = 1.9% per year inflation is all it takes, and it's been worse.

Re:

[MobileTatsu-NJG]

"1.1^(1/5) = 1.9% per year inflation is all it takes, and it's been worse."

You've got a good point. It's amazing that the $50 price tag held on as long as it did. However, even a bad next-gen game still fills the DVD with textures etc. because Sony and Microsoft insist on it.

Re:

[poot_rootbeer]

-Why did next-gen titles five years ago cost $50?
-Now, take that answer and apply inflation for five years.

It's not that simple, or else Atari 2600 games would have retailed for under $10.

Come to think of it, they DID, after the industry collapsed. I know MY cartridge collection, for one, grew substantially circa 1984 as retailers attempted to liquidate their remaining stock.

Re:

[Phisbut]

Come to think of it, they DID, after the industry collapsed. I know MY cartridge collection, for one, grew substantially circa 1984 as retailers attempted to liquidate their remaining stock.

Yeah... games were so cheap then... I bought a shovel and dug out lots of cartridges [wikipedia.org], they were coming out of the ground, for free. I later attempted to sell on a gray market to make a hefty profit (no eBay back then)... I still haven't recovered the cost of the shovel...

Animal Crossing

[tepples]

I bought a shovel and dug out lots of cartridges, they were coming out of the ground, for free.

Yeah, I dug up a Pitfall [gamefaqs.com] that way. All I had to look for was an asterisk marking on the ground. [wikipedia.org]

I later attempted to sell on a gray market to make a hefty profit (no eBay back then)... I still haven't recovered the cost of the shovel...

Perhaps if you bury it in the right spot and dig it up later, you can get a golden shovel with a built-in metal detector.

Re:

[Nimey]

In their cases, that was because they were large games that required lots of ROM, and ROM was expensive.

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[grumbel]

ACK, back when the SNES was up to date basically all third party titles cost around 65EUR over here, some even up in the 75EUR, only some first party titles where sold at 50EUR and even then those prices aren't adjusted to inflation. If video games actually would adjust to inflation we would probably pay around 100EUR today.

There is really nothing to complain about the current prices, even if one doesn't like the 60EUR price tag, there are a ton of used games out there and all those cheap platinum/classic r

Re:

[Phisbut]

ACK, back when the SNES was up to date basically all third party titles cost around 65EUR over here, some even up in the 75EUR, only some first party titles where sold at 50EUR and even then those prices aren't adjusted to inflation.

Back when the SNES what up to date, there was no such thing as an EUR.

Re:

[WinterSolstice]

Yup - and I think I paid about that for Ultima on Apple II :)
That's why things like DOOM ($35?) were so nice.

I guess some things never change.

Cute

[MobileTatsu-NJG]

I click on a link to an article of why game prices have gone up and I get a full-page ad asking me to compare various sports cars.

Beats the music industry

[pipatron]

If the programmers and actual developers get 45% of the remaining $59, it beats the music industry content creators by a magnitude or more.

Re:

[kinglink]

The reason this is better is because the publish pays the developer for the game. The developer pays the employees for the game. So the only way the game is made is if the programmers get a fair share of the money.

Basically that 45 percent they are talking about is already spent by the time any of this profit comes in. And suprisingly it works. Most programmers are salaried and they get paid whether the game does excellent or awful, but they are held accountable because they really do want to make the b

Re:

[SirTalon42]

An 'order of magnitude' would be 10x, so for his statement to be accurate 'content creators' would have to get 4.5% or less (though he said 'content creators', not artists, which probably get far less since they're not used for marketing purposes, thats what the artist is for).

Re:

[pipatron]

Yeah. I only know the Swedish numbers, but I don't think they differ that much internationally, at least not in the western cultures. According to them, the content creators gets to see about 2% of the money that the population spend on culture. The rest ends up in the pockets of various middlemen.

Order of magnitude

[tepples]

A "magnitude". Is this a mathematical or scientific term? How big is a "magnitude"?

An order of magnitude difference [wikipedia.org] is a factor of approximately ten. For instance, Mega Man X for Super NES was 1,280 KiB, which is an order of magnitude larger than Mega Man for NES, which was 128 KiB.

Because it's what the market will bare.

[hal2814]

As long as people are willing to pay $60 per title, that's what they will cost. You can break down the numbers all you want but if the market won't tolerate $60 games, there sure as heck won't be any. The least important links in the chain will either be paid less or eliminated entirely.

Re:

[xdroop]

My god, man, this is Slashdot -- it is no place for rational discourse. And on economic theory no less!

Unless you are going to rail about the "unfairness" and "greed" inherent to the current system, I recommend you find another place to discuss the matter.

(Now in your defense, you did disguise your rationality by using "bare" instead of "bear".)

Re:

[hal2814]

"(Now in your defense, you did disguise your rationality by using "bare" instead of "bear".)" Yeah I noticed that after I hit submit. I guess I've seen the "We bare all." billboard a few too many times on I-85.

Re:

[Pendersempai]

You're neglecting the supply side of the price/quantity equilibrium. If some suppliers were willing to supply their (equivalent) games for $50, then even consumers who would tolerate a $60 pricepoint will instead by the $50 games. Your formulation assumes that the developers would all collude to fix their price at the maximum the consumer would bear -- which may be true, but I haven't seen any evidence to support it.

Re:

[hal2814]

"You're neglecting the supply side of the price/quantity equilibrium."

Most games on a given platform despite their differences are priced within about $5 of each other at launch. Pricing them any lower tends to give consumers the impression that the game is a "value" (read "inferior") game. That impression is worth more than any possible collusion. Pricing them much higher simply keeps consumers from buying in the first place. At launch, games are priced as high as consumers will tolerate. After that

Re:

[The-Bus]

The thing is that we passed the $60 limit, in real dollars, a long time ago.

NES cartridges could be $45 back in the late 80's (possibly higher, I don't recall, just remember that as an average price point for new releases). Some games on the SNES were even more expensive: I distinctly remember seeing Mortal Kombat being advertised at $79.

Adjusting for inflation we're looking at $75-$105 prices nowadays. And outside of specialized collector's editions or games requiring additional hardware, we're not at that

Re:

[Aladrin]

Interestingly, as long as the alternative is a choice between supporting the company and paying for something legally, ethically, and morally, and downloading it off the internet and screwing the developers of the game you love so much, damning your eternal soul, and taking a chance on going to jail, a big chunk will pick $60.

There, I fixed that a bit for you. It goes far beyond the money aspect. Some people actually appreciate the fact that the developers put a lot of hard work into the game and if sales

Re:

[BlueCodeWarrior]

Interestingly enough, it's possible that the OP meant that when choosing between paying $60 for a game and not buying one at all, some just won't buy a new system at all. I know $60 games are one reason that's kept me from buying any next-gen consoles so far.

Not everything is about piracy.

Re:Because it's what the market will bare.

[MeanderingMind]

If it's a waste, why are (hypothetically) you taking the game for free? That appears to be what you're implying is the proper response to the price.

I'm confused by a strange attitude I see in people today I'd label "entitlement". Somehow, we are entitled to anything we want, whether or not we can afford it. Instead of dealing with it and living without luxuries, we take what we want.

I don't know where this attitude comes from, I'm just noting what I've been seeing here in America.

Market forces

[tygerstripes]

It's interesting to see where that money goes & how it's divided, but to suggest that the ultimate destination of that revenue is the reason for the price of games is ignorant and foolish. Supply and demand, people. Any company who doesn't get all the revenue they can for a release won't last long.

Re:

[account_deleted]

Comment removed based on user account deletion

Way past my impulse buy point

[sixteenvolt]

When I am browsing through something like Steam, I don't think twice about buying a game for $20 or $30. For $60, it definitely becomes a calculated purchase, and I really start questioning how badly I want the game.

$60 seems to be pushing the extreme limits of how much I'd even pay for a video game under ANY circumstances. I wonder if this line will ever be crossed?

And People Wonder Why DS Sells So Well...

[EXTomar]

I agree with the parent that $60 is past the "impulse buy" range. I suspect why the DS does so well month after month isn't the hardware (which is so-so) but the fact it is a cheap gaming device with cheap games. Especially with kids, are you willing to spend $60 on a game you've never heard of for your kid or a $30 kiddy looking one?

This is why I'm disappointed in this era for consoles. Both the XBox 360 and PS3 are overpriced, their software is overpriced, and the games are getting shorter and maybe of

Re:

[MeanderingMind]

The Wii could make a killing if they actually had some games.

Not to mention systems.

Re:

[RexRhino]

I will pay $60 for a console game, easy. A) I know it works on my system. B) It is legal to resell it when I am done, and recoup some of the costs. C) I am getting subsidized hardware.

However, for a PC game from Steam, where you can't resell the game, where your PC might not be enough to get optimum performance from the game, where you have paid the full unsubsidized cost for the hardware, and especially on the PC where they release beta products that need to be patched before they work properly... then def

Re:

[Kelbear]

I think I share your price elasticity. I buy games on Steam on an impulse, it hardly takes more than 2-5 minutes before I decide to pay up.

At $60, so long as it looks like it'll be "decent" I'll pay up.

But more than $60 bucks and I would take a long hard look at what else I could be buying for that price. Opportunity costs.

Thing is, while inflation keeps moving, the practical buying power of the average consumer isn't necessarily moving at the same pace. And that buying power is much more relevant than how

This is pure bullshit

[ludomancer]

This article is a work of fiction on a hilarious level. "Next-Gen" titles cost $60 because the greed of publishers demands it. Publishers get the majority of the profits, developers only get the amount it actually takes to develop the game and pay their employees. I can't believe the writers of this have the gall to say otherwise.
For the record I've worked in the industry for 15 years. There doesn't seem to be a hair of truth in this article.

Re:This is pure bullshit

[LordPhantom]

....and your post was grade "A" fertilizer. Look, real prices of games have actually gone down over time due to inflation. 60$ today is -not- the same as 60$ in 1995 or 1990, etc. When you were buying the high end games for your SNES, you were paying the equivalent of roughly 20$ more in terms of today's money. The reason for games being cheaper also probably has something to do with the fact that more of them are selling (volume).

In short, greed has nothing to do with it. It's a simple matter of money value over time, and mildly increased production costs.

And honestly, using a vague work history for the record industry isn't likely to increase your credibility for most people here, most of all in a post that tries to imply that -game- publishers are greedy.

Where do you live?

[BlackCobra43]

20$ now being equivalent to 50$ of money from 10 years ago? That's 10% yearly inflation - not remotely close to reality. In accusing others of downplaying the impact of inflation, you grossly exagerated it.

He lives somewhere they teach math

[Sycraft-fu]

The SNES was released in 1991, the new top titles were $50. Take $50 in 1991, run it through the Bureau of Labor Statistics inflation calculator, you get $75 in 2007. So if the cost of new top titles currently is $60 in 2007 dollars then SNES games were $15 more each in real dollar terms. Given that the grand parent seems to have done an estimation, $20 is close enough. He's not saying that $20 in 1991 = $50 now, he's saying that the $50 you spent on SNES games would be about $20 more than the current price

Re:

[scot4875]

And *your* post was grade AA fertilizer.

When we were buying those NES and SNES games, we were also buying a cart that generally made up a large portion of the manufacturing cost. ($20ish) A lot of PS1 titles were $40 because they were cheap to manufacture.

How much do you think it costs to press those optical discs? Are Blu-ray discs an extra $10 per disc to justify that cost?

--Jeremy

Re:

[p0tat03]

Spoken like someone who doesn't develop games, which isn't your fault, but here's some clarification:

Depending on the types of games you play, production costs have risen dramatically since the last generation. Heck, they've been rising since long before then, but only have we seen a price hike now. The workload to produce your average FPS is now *many times* more than during the times of Halo 1 or Half-Life 1, and the size of teams have ballooned dramatically just to give you all the marvelous eye candy

It's mostly licensing...

[MaWeiTao]

I don't think the $60 price tag is anything new. I recall seeing PS2 and Xbox games in that price range.

The obvious reason why console games are expensive is because of console licensing costs. It's why the same game for PCs costs $10 to $15 less. PC games have been $45, at most $50, for years but console games seem to have been creeping up in price in that same time period. So the price difference clearly isn't due to increased development costs.

This is one of the reasons I never really got into console gaming. I don't like having to pay for these nonsense licenses nor do I like having to spend that much on games. Certainly consoles have some desirable games, but not desirable enough that I'm willing to spend that much more money on them. And if you think what we pay in the US is bad, you should see prices in Japan where your average game is at least $70, and I've seen some close to $80.

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[duerra]

You're not wrong, exactly, but I think that there is another factor in there - PC games have to compete with free (piracy). That also helps keep the cost of games down.

What gets me is that I know I'm not the only one who would be more likely to drop $25 or so on a game without thinking twice if they were priced as such, but when they're priced at $60... I feel more compelled to wait. Then, by the time the prices for the game actually come down, there's usually a newer version of the game out and I don't w

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[ivan256]

What gets me is that I know I'm not the only one who would be more likely to drop $25 or so on a game without thinking twice if they were priced as such, but when they're priced at $60... I feel more compelled to wait.

You've struck on the exact reason that I own neither an Xbox 360 or a PS3 yet. When the $25 "Greatest Hits" libraries for those systems grows to something sizable, perhaps I'll reconsider my ownership position. $60 for a game is on the borderline of what I'm willing to pay, but they push me

Why does anything cost what it does?

[ThousandStars]

Because people will pay the price. If they won't, the product sooner or later disappears.

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[oliverthered]

The why aren't games / movies cheaper on the psp?

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[trdrstv]

The why aren't games / movies cheaper on the psp?

A fine example of an over priced product disapearing from the market.

Wrong, It's all about what people will pay.

[Oz0ne]

If you'll notice, a lot of next gen titles are existing previous generation titles in higher resolution with a few more effects enabled. Obviously the development costs there weren't anywhere near what the inintial development was, especially with cross platform titles that have to have a portable enough code base to be deployed on disparate architectures.

The $59.99 is completely artificial, because that's what people will pay. There's no other reason for it. Of course, some games do cost quite a bit mor

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[tomstdenis]

I'd like to point out that it make take several titles to recoup the cost of a single game engine.

That said, I think they're focusing too much on detail [the wrong details], which is why the games cost so much. If you had to hire 200 artists, musicians, modellers, etc. for a year to make a game, you'd sell it for $60 too. Back when games were the product of 10-20 folk, it was totally possible to sell them for $20 and profit.

Tom

Supply meet Demand

[MrCopilot]

Why do they cost $60, People will pay it. Period.

Next-gen?

[ebingo]

I'm sorry, but I always buy games for current-gen systems. What would be the point of buying a game for a system not out yet?

Because They Can

[Greyfox]

Just wait a year and buy the game in the bargain bin for $15. If you've got to have the title NOW, you obviously don't mind paying the premium that much.

GoW production cost: $10m not $20m

[El_Muerte_TDS]

Now explain why other games that were twice as expensive to be made also have the $60 pricetag.

It's getting to be too much at times...

[PotatoHead]

Frankly, Final Fantasy XII was worth the $60. (Yeah, I know the non-collectors one was $50, but it was out of stock at the time.)

Many of the franchise games, with recurring themes, are no longer worth the $60. Many of these simply look better, or have some nifty feature and that's it. Hmmm... reminds me of Microsoft software actually. --no thanks! This title was big (really fricking big), expanded on the story line and overall theme nicely and had fantastic art direction. Beautiful and engaging game,

better question...

[quick_dry_3]

is why does the same game on Xbox360 cost AU120 while the Xbox game cost AU90 at release?

The games in question have already been out for a fair while on XBox, yet the 360 version costs even more and the game is old. (OK, maybe not a better question, but I find it damn irritating /rant)

Bad math corrected: $28 per copy, not $1.

[ChaosDiscord]

Analysts predict that some other publishers will need to clear 1 million units to get in the black--and start making about $1 per game sold.

The remaining $59 per game goes into many hands. The biggest portion--nearly 45%--goes toward simply programming and designing the game itself.

Aaah, no. This is terrible, terrible math. The article is claiming that for copies 0 through 1,000,000, the publisher makes nothing. Then for copies 1,000,001 and beyond, the publisher is only making a dollar per copy. Utter nonsense.

Why would be publisher not be profiting for the first million? Obviously because they're recovering their initial investment. The investment into programming, design, art, and the like. So once that millionth copy is shipped, you don't get to count it as an expense any more.

The attached graphic indicates that art/design is running about $15 per copy, and programming is running about $12. From this we can conclude: For copies 1 through 1,000,000, the publisher is making zero profit. For copy 1,000,001 and beyond, the publisher has recovered the art, design, and programming costs. Add in their $1 pre-planned profit (also in the graphic), and now they're making $28 per copy. A significant difference from the articles insanely wrong claim of $1 per copy.

Nothing new

[hansamurai]

$60 is nothing new for games, I remember NES and SNES games costing this much, and after inflation, that price was probably closer to 80 or 90 of today's dollars. I've probably only bought about five total $60 dollar games, and most of those were for the N64. I buy most of my games used or at the $40 price range, just requires a little patience...

Correct me if I'm wrong, but...

[falsified]

I really think I remember seeing Mario Kart for the SNES being something like $55-60 (and offtopic, but it was some weird random number like $57.42)...back in the early 90s. Yes, I know that cartridges cost more than CDs/DVDs to manufacture, but Sega CD games were in the same price range at about the same time.

The laws of inflation don't seem to apply in the video game realm. We get off kind of easy now as compared to before. I don't remember relatively new "greatest hits" being sold for $20 a pop back then

Chrono Trigger was $100 in speciality stores

[Astarica]

Was it because it cost roughly twice of any game that's ever been developed? Or maybe cartridges cost $40 more than CDs? No, it's because whoever sold it thought this is the right place to maximize profit. They may be right or wrong, and history seems to indicate $100 is probably the wrong price to sell a popular game. But really it's not our problem whether games are priced right or wrong. If they're priced wrong the publisher eventually pays for that mistake. If $30 gets you more profit than $60, eventually someone will notice this and start selling them at $30. The fact it's not happening suggests selling at $60 might be a good idea after all.

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[j00r0m4nc3r]

The publisher makes a hell of a lot more than $1 a title

Yeah, especially when they doctor their books so that the $1mil they were supposed to spend on marketing and PR went straight into their own pockets, and when they massage sales figures so they don't have to pay the developers what's fair. Publishers are a dirty dirty breed. Their entire business model pretty much falls apart if you remove the corruption.

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[Nimey]

OK, show your research proving this. You have research, don't you?

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[Tickenest]

The extensive supporting documentation and sourcing you have included with your argument makes it all the more compelling. Perhaps you have a newsletter to the likes of which I may wish to subscribe?

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[Itchyeyes]

Source? Unless you've got something to back it up, I think I'll believe the story from a reputable business magazine over an anonymous message on the Internet.

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[Canthros]

From the article: 45% of revenue goes to development costs of various sorts: art, programming, engineering, design, etc. Everything that it takes to get from having nothing at all to having a salable product. Retailers get about 20%, or $12. Of the retailer's $12, at least $11 goes to cover various operating costs associated with having a storefront. That shouldn't be a surprise: it's been known for a while now that videogames are a loss leader for many stores, and that the real money in video game sales is

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[tomstdenis]

They sell old games at a discount for various reasons

1. To clear stock, selling a game at a lower loss is better than a total loss.
2. Older game could inspire future sales (lead generation)
3. Why the hell not?

Tom

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[tomstdenis]

Supply and demand.

If the game is selling million*S of copies, there is still a strong demand for it. Lowering the price would not make much economical sense.

When sales taper off they usually promote them as "players choice" or "gold" games for $39 or $49 or whatever...

If you can resist buying a game for the first year after it comes out, you usually can save yourself some money. However, if you instead just buy fewer games you can get them early.

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[tomstdenis]

Oh, yeah, well expect some level of lying. But don't underestimate the # of hands in the pot. Especially sport franchises where they pay millions in license fees just to stick a jersey on some modeled animaton. /me plays NES games, and desperately wants a Wii

Homebrew on what platform?

[tepples]

..who gets what percent of the $0 I spend on awesome homebrew games?

You meant on Nintendo DS, right? Wii, Xbox 360, and new PSP units are still completely locked down, and PLAYSTATION 3 homebrew using the "Other OS" bootloader still has to use Quake 1 era software rendering because the hypervisor turns off the RSX chip.

360 not locked - XNA

[a16]

The 360 isn't locked for homebrew at all - it's easily the best homebrew gaming development platform out there right now. Have you never heard of XNA?

Xbox 360 with XNA is $894

[tepples]

As I understand it, the XNA Creators Club subscription costs $99 per year per console for all users, not just developers. This adds $495 to the total cost of ownership over the five-year expected life of the Xbox 360 platform. XNA Game Studio software also needs a recent PC running Windows XP Service Pack 2, unlike Dreamcast and DS that get along fine with a not-so-recent PC. From XNA Frequently Asked Questions [microsoft.com]:

Right now XNA Game Studio Express is only designed and tested for Windows XP SP2. [...] The individual you are planning to share the game with must be logged in to Xbox Live and have an active subscription to the XNA Creators Club

The $495 extra cost of XNA over the 5-year life of an Xbox 360 isn't far off from the $599 co

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[animaal]

Well, as you're implying, Forbes aren't surprised. It's all economics. Forbes must think they can sell more issues by writing about high game prices than by writing about the price of trout in Belgium.