I bought a new video game this weekend.
“Triangle Strategy,” a new tactics based RPG for the Nintendo Switch. It cost me $59.99 before tax.
How is that possible?
There’s a lot of talk these days about inflation. The price of everything is going up. A dollar doesn’t go as far as it used to.
This is not unusual. Really, it’s inevitable over time. The current rate of inflation is causing an economic shock, but even in good times there is a slow and steady crawl upward in prices.
A can of refried beans costs $2, gas is hovering around $4 a gallon, even the Dollar Store has raised their prices.
Yet video games are still $60.
And when I say “still” I mean it. Last week I came across an old Toys-R-Us ad from around November of 1996. It featured the latest in Super Nintendo releases like “Donkey Kong Country 3” and “Madden ’97,” each selling for $59.99.
What else in your life sells for the same price today that it did 25 years ago?
Even within the video game market the price of new consoles has doubled and the price of controllers has nearly tripled, but the industry standard of the $60 video game somehow persists, all but completely detached from any of the usual economic forces that may drive prices up or down.
Even discounting inflation, the cost of video game development has ballooned from generation to generation. Once upon a time, video game credits may have listed a few dozen people. Today’s modern AAA titles have the production values of major motion pictures, and the budgets to match.
Where once you had one guy trying to make a soundtrack on a five channel sound chip, now you have games scored by professional orchestras. Where once you had a sprite with a handful of frames of animation and maybe a few recorded voice lines from an unnamed person that happened to be available to speak into a mic, now you have professional actors delivering performances in state-of-the-art motion capture.
But for every advancement that should justify a price increase, there seems to be another advancement that counteracts it.
At the late end of the Super Nintendo’s lifespan that $60 price point started to strain. Some games, like “Street Fighter Alpha 2” and “NBA Hang Time,” started hitting shelves at $69.99.
Imagine that, $70 in 1996 money for a 16-bit game.
However, the mid-90s also saw the industry begin the transition from cartridge based video games to CD based games, which dramatically cut down on production costs. Games made for the CD based Sony PlayStation could be produced significantly cheaper than the cartridges of the previous generation, allowing cutting edge titles like “Crash Bandicoot” and “Twisted Metal 2” to retail between $50 and $55.
For a direct comparison, while “NBA Hang Time” for the Super Nintendo retailed at $70, its PlayStation counterpart was being sold at Toys-R-Us for $47.99 (with a coupon).
It would be another decade before the slow crawl of inflation brought the standard price back up to $60, but it eventually did and there it has remained.
The industry has fiercely maintained that equilibrium, bending over backwards to stick to that price point in the face of ever rising costs. Almost to the point where I’m not sure the $60 price point still has any basis in economic reality outside of simply being the price people are used to paying.
Digital distribution, for instance, takes the expense of producing, shipping, and selling physical retail copies completely out of the equation.
Meanwhile, downloadable content allows developers to continue monetizing their games after the initial sale. This creates an incentive for them to keep the base price down in order to ensure a larger audience for DLC sales later, which likely sees a higher profit margin.
It is just incredible how this industry, decade after decade, continues to rally around what seems to be a completely arbitrary price point.
But nothing lasts forever, right? Inflation, especially at the rate its going, will eventually force the industry’s hand and make them consider breaking that $60 standard once again. At some point, it just becomes mathematically impossible to hold the line.
Well, maybe. Because the industry has one more card to play that could maintain the status quo for at least another decade or two.
They could abandon physical media entirely. No more cartridges or disks to produce and ship across the globe. Just download codes.
It seems crazy, but the industry has been inching towards that direction for some time now already. The current generation of PlayStation and Xbox consoles already have disk-free variants and game streaming services like Game Pass are becoming a larger part of the conversation every day.
If faced with having to choose between selling a physical game for $70 or selling a digital only game for $60, the industry may very well decide to pick the latter. If anything, the current spike in inflation may accelerate that eventuality.
Travis Fischer is a news writer for Mid-America Publishing and should really call
his mom to thank her for what she spent for him back then.
