Are Video Games Overpriced?

Do you pay too much for video games? I know I do. At over $50 a pop, major releases of Call of Duty, Mass Effect, Elder Scrolls, Assassin’s Creed, and more are surely raking in generous amounts of cash for the developers, publishers, and resellers. Through direct download sites such as Steam, PlayStation Network, Xbox Live, and others, purchasing has never been easier. So why are games given such a high price tag? Are we really paying too much?

Few industries have survived the recent economic climate quite as well as the video game industry. Video games have routinely outsold equally hyped blockbuster movies, leading up to the gaming industry actually surpassing the movie industry by over half a billion pounds in the UK alone. This margin has only increased over the past few years, leading major development houses to bring in more big name actors to their titles, further establishing the industry in the realm of entertainment.

On the other side, developing a unique game takes a lot more work than it seems. In a sense, development of modern games has evolved into a sort of mixed media between major motion picture and interactive playing experience. Audiences expect to be drawn in to a believable story these days, meaning that characters have to be increasingly interactive and realistic. L.A. Noire, a popular title over the past year, featured a breakthrough facial animation technology that makes rendering of movie-quality facial animation available within the boundaries of a real-time video gaming experience. The game itself feels like one very long movie, and you can manipulate it as you control your character.

So the question remains: is this really worth the high cost of admission?

Indie Games

One of the great things about direct download platforms such as Steam is the ability for players to purchase games from a variety of different sources. Independently produced games tend to come with a much lower price than releases from larger studios. This is due in part to the smaller staff and comparable production values.

A game like Trine or Terraria can be purchased for a fifth of the cost of a new release of Call of Duty. The reason for this is, simply put, it costs less to make these games. There are no (or few) big-name actors to pay, the play environment is easier to create, and the mechanics are typically pretty simple. While the games themselves may be beautiful works of art in their own right, the costs of development are usually less.

On the other side, indie developers are working to make a name for themselves in the market. That means releasing at a lower price in hopes of making the development costs back in volume. Platforms like Steam have made it possible for indie developers to get their creations in front of more people than ever before. The price of releasing titles in physical form are eliminated.

If anything, the success of indie titles such as Minecraft and Terraria have provided a proof of concept that games don’t have to be visually stunning or full of over-the-top cut scenes to turn a profit.

Mobile

The same can be said for indie developers releasing to the mobile market. iPhone, Android, and other mobile platforms are generally fairly easy to script for, and an integrated marketplace makes it even easier to distribute your game to a larger pool of potential buyers. Offering additional content through in-game purchases only adds to the revenue already made possible by the initial sale. This market is especially kind to casual games intended to be played while riding the bus, waiting for a meeting, or simply winding down at the end of a long day.

It would only make sense that these titles be made available for less. The mobile market is driven by impulse buys. $0.99 is a much easier impulse buy for nine out of 10 people to make than $5, or even $15. Appealing to the larger market means making up production costs in volume. With mobile apps, supply is practically unlimited, so the traditional notion of supply and demand doesn’t really weigh heavily here.

This begs the question: Why are Nintendo DS and PSP games still largely more expensive? Surely it doesn’t cost an additional $20 to package a game and make it available? These platforms are becoming increasingly more download-friendly, though the price of these titles remains somewhat high.

Inflation

When considering whether or not you’re paying too much for any one thing, you might want to take a look at how that price has adjusted in relation to everything else. Inflation gradually increases the price of everyday goods such as gasoline, packs of gum, and even software. During the ’90s, you could pay less than $100 for what today is a $200-400 program.

Video games used to go for anywhere from $5 to $30. Today, the priciest games sell for roughly $60 upon release.

Compared to Other Entertainment

If you take a trip to the local movie theater, you could expect to pay around $15 for a ticket, and about the same for snacks. Buying a DVD or Blu-ray of a new movie may run you roughly $15-25 depending on the title. Your expected time of enjoyment out of that movie may range anywhere from 90 minutes to three hours. A video game, by comparison, will usually last you around 10-20 hours before the initial campaign is completed. Add to that multiplayer options, and you may have a product that will provide continuous enjoyment for weeks.

Cable television, another still-popular entertainment industry, has skyrocketed in costs over the past couple decades. Homes with standard cable packages can expect to receive bills anywhere between $60 to over $100 depending on channel options. Package deals including Internet and phone service may lower that individual cost, but the overall bill total will only increase from there. Even if you get the most basic cable service offered by some providers, you’re still paying $30 or more per month.

If there is one entertainment medium that would appear to be a bargain when compared to video games, it’s services such as Netflix and Hulu. These streaming services offer a variety of movies and television shows for a single subscription fee that can run below $10 monthly. The downside of these services is that, though they may include some ad-supported new television content, the movie content is typically aging and/or independent films.

How to Get a Good Deal

With every high price, there are deals to be found. Steam typically has extremely reasonable sales running for a variety of old and new titles. In fact, the hottest selling game right now (Skyrim) was made available for 40% off during the Christmas holiday. Currently, it sits at 30% off. Modern Warfare 3 is another recent popular release that has received some discounts.

Retail stores will frequently feature a pile of random games at a reduced price during stock rotation. While these titles may not be the latest and greatest, you can usually find a gem or two in the bin at a remarkable bargain. Some retail stores will even feature a reduced price on the day a new game is released in order to encourage shoppers to pick it up at their store. Pre-order sales are another great chance to get a game on the cheap, with discounts of anywhere from 10% to 20% on many new titles.

Physical copies of games can generally be resold secondhand. Used game stores are a great place to find secondhand console games at a reasonable price. You can even, in some situations, trade in your own games and exchange them for others.

The video game rental industry is still booming. Redbox, many movie rental stores, and even online rentals through OnLive and other services allow you to rent a game, play it, and bring it back for a fraction of what it would cost to own the copy outright.

My general rule of thumb when buying video games is to never pay full price. Steam will usually discount a game a month after its release, making it a better deal with only a minor amount of waiting involved. MMORPGs are especially bad about being overpriced when you take the $15 monthly subscription fee into account, so it’s usually best (in my opinion) to hold off until the box price drops. This usually happens about a month or two after the initial launch.

Package deals are also worth looking into. Some retailers will sell a companion book or special edition controller with purchase. The asking price may be a little higher than retail for the game, but the value add might just make it a deal.

Final Thoughts

Are games overpriced? I’d say some of them absolutely are. The sweet spot for me is around $40 for a major title and $10-20 for an indie game. Anything less than that is a deal in my opinion. When you take into account all the work and effort put in to these titles by developers, actors, 3D graphics designers, and cinematographers in some cases, you might find the experience well worth the price of admission.

37 comments On Are Video Games Overpriced?

  • Are you kidding me? You, americans, consider video games… overpriced? Well, I live in Norway and I have to pay about 100$ for a good new game at release (ex. Modern Warfare 3). Am I lucky I can get one for 75$ but that’s higly unusual and probably just Kinect-games.

    I got Saint’s Row: The Third a couple of weeks after release for 60 bucks, and for me… that was a quite good deal.

    • You should try steam, maybe even set it up so i goes though the US. I never pay for than $5 for a game, but then again I don’t buy new games usually.

      • You know what’s funny, is you point out that it’s crazy that we Americans think games are overpriced, then prove our point for us. ūüėČ Games are overpriced. Sean has a good point. Steam is always my first place to check.

        • What I actually ment was that you americans think games are overpriced, when you actually have a lot of cheaper games than other people have. If you are going to complain about the prices, then other people, like me, are starting to look at you dumb because we pay 100$ without complaining. But yes, games are overpriced.

      • Actually I have started to shop on Steam, but my PC isn’t a good gaming PC so I normally play on my Xbox 360. And well, you can’t buy 360 games on Steam.¬†

    • All over the world they should lower them!

  • if you look at other countries. video game prices are CRAZYYY!! as in 100 or maybe even more bucks for a single new release. however that does not mean that games arent overpriced as they are today. some games may serve for hours and hours, but that doesnt mean the amount of content is great. just means it may not get boring for quite some time. i certainly believe that games are overpriced, i remember when games were around 40 bucks max and i think thats how it should be. if games were 30 bucks each, they would possibly make even more profit to the increased sales, except for some games such as Call of Duty in which everyone will spend full price for it regardless. interesting topic definitely, and a great article.

  • Are we paying too much for video games? No, but we like to keep injecting “value” on everything.

    It’s important to note that value, is a state of mind. A principle that seems to be getting lost as we¬†constantly¬†try to tell people, what a good value is.

    The simple fact is that those who are satisfied with just Angry Birds can’t understand the value that comes from Modern Warfare 2. All they see is a price tag and¬†perceive¬†it as an “inferior value.” Visa versa as well.

    Once again, this idea of putting a value on a purchase of video games, or any good in general, is such a flawed way of thinking. A game that I consider a great value to me, might have zero value to someone else.

    We shouldn’t be asking people, “Are we paying too much?” The only important question is “Are we happy with the product?” It would seem that we are, and the price is a non-issue.

    • A lot of people were happy with the HP TouchPad, then the price dropped and it became the best-selling tablet of that month. If a 300 million movie costs $16 to buy, $15 to see in a theater, and $1-3 to rent, there’s no reason why a game made with the same budget shouldn’t be brought down a bit. They’d probably sell even more.

      • Comparing apples to oranges. The console gaming market and the movie going market aren’t the same and don’t have the same size audience. More people watch movies then play console videogames. Movies can be sold at a more affordable price because the bulk of the audience. But you know, that really doesn’t matter.

        Now could they sell more if console video games cost less? Maybe, who knows? But it won’t matter to the dedicated Modern Warfare Fan. They will purchase a $100 videogame (and people have) because they like the product and it makes them happy. Who are we to try and put a value on that?

        As for the HP Touchpad, I think happy is the wrong term. People purchasing HP Touchpads have more to do with impulse buying than it had to do with valuation of one’s happiness. It was an acceptable gamble on the consumer’s part, whether they find value in it or not.

  • well since the gaming community is only growing now adays, i think that the big companies producing these games are trying to milk us of our money, thats why i will only buy games used, i will NOT pay $50-$60 on a game, but overall i do believe that i am paying too much for games.

    • Are you aware that purchasing used games hurts game companies, who then need to increase prices and¬†withhold content¬†through DLC due to loss of revenue?

      Unlike selling used books, selling used games has no beneficial outcome for game publishers. So when Gamestop sells a used game, all the money goes to Gamestop, not a single cent go towards the industry.

      • And who cares. They don’t need to raise prices, they do it¬†because¬†they want to make money. Most games are making million these days. So please don’t tell me they are loosing millions becuase of used games sales. Its just another escape horse the¬†
        industry¬†¬†uses when their game doesn’t sell.¬†

        • Argument¬†of someone who isn’t in the video game industry and doesn’t read the hundreds of articles illustrating the fact that used game sales hurts revenue.

          Quantic Dream, makers of Heavy Rain, attribute millions of dollars lost from used game retailers. EA lost around 340 million in the Sept. 2011 quarter, partly due to loss of sales from used games.

          The point here, I find it funny that many claim to be big video gaming buffs and supporters, but only ever purchase games used. That money  only supports Game Stop and other retail outlets, and developers never see money ever.

          • RomeosTrueDude

            And guess what!?! I WOULDN’T BUY FUCKING USED GAMES IF THE ACTUAL GAME WAS SO FUCKING EXPENSIVE!!!!!!!!! THAT IS TH MAIN REASON WHY WE GO TO GAMESTOP! they want to stop the whole “used games are stealing our money” bullshit then lower the damn prices. That’s why we go to GAMESTOP. To buy a game cheaper. The only reason they are 50 bucks is cause they are greedy bastards. And when youdo…the game turns out to be a HOT fucking mess that acts like one major hallway with having doors but all are locked except the end and the beginning. But, UNDERSTAND the reason WHY people go to used game stores than to bash people who do. NOT EVERYONE has the money to 100 plus dollars on two games that just “look pretty”. I’d rather go back to Nintendo era. Ugly games that play well. The were cheap and SOLD EXTREMELY WELL!!! (hell people STILL rebuy those games…).

      • when the game sold as new they made the money for that game already so if sold used they cant make ony more on that same disk. not hard to figure this out.

  • ¬£40 a game? ¬†Of course they’r overpriced! ¬†I don’t really bother with video games but when I do want to play a game i.e FIFA 12 or WWE 12, I’m waiting a month or two or get a pre-owned under ¬£30. ¬†

  • Not everyone seems to remember SNES and N64 titles being upwards of $69.99 and $79.99. Granted the cartridge format is more expensive in general, but at $59.99 now, we get a TON more content.

    I agree that $59.99 is overpriced, but in comparison to the cartridge generation, its not.

  • A New release game in New Zealand cost $120USD Yet the same game would retailed for $60USD in the states with the same company, Its pretty crazy!

  • Freeware, people! Freeware! gamershell,¬†caiman.us,¬†reloaded.org, abandonia (well, some of it…), classicdosgames, etc etc. Ditch the console and save a bundle!

  • Love a good freeware title.

  • Video Games are very overpriced, but if you have a Playstation Portable(PSP) 3000 or older you can get games used because they are in UMD trays. When games are released, they should start ¬†off expensive, but not hold on strong forever(months) at $50! They should lower the price for games after about a week because they are just games even though some people use them to make money on Youtube.com when they make commentaries.¬†

  • One has to be dumb to play games as well as purchase them no matter what they cost.

  • As a child of the 80s, I remember going to the store and buying games for ¬£1.99. Is it wrong to consider anything over this amount to be ‘overpriced’? ūüôā

  • I buy games that are either older, or under the radar. Games that dont get a spotlight. Paying 30 bucks for a brand new ps3 game just because its not call of duty. Is a great deal to me. And at the same time helping out a lesser known company.

  • I’d say definitely overpriced. This year, we only got our children two new titles for their Wii: Mario & Sonic 2012 London Olympics and Kirby’s Return to Dreamland. $100 for two games. Want to know what they spent their time playing instead? Angry Birds on their Nook Tablets. If proprietary gaming systems want to keep up with the handheld downloadable market, they simply have to bring prices down.

  • To me it’s all about what you’re paying and what you get in return. But for the most part, I find console/pc games a little overpriced.

    I have absolutely no problem dropping $10 on a game like Infinity Blade 2- Good fun and replay for the price, plus I know they usually do a few decent feature updates.¬†Also, I don’t mind paying $60 for a game like Skyrim where you get literally HUNDREDS of hours of gameplay.
    Where the problem comes in is where console/pc games come out that have 5 hours of crappy gameplay that cost 50-60 bucks. Or, in my opinion, stuff like battlefield and CoD which are basically the same thing every single year and cost $60 and are basically just an expansion. 

  • Nathan Inkster

    I remember the days when they were £20 

  • Yep, and that’s why video game piracy has been increasing

  • Try living in Australia mate, We pay $100.00 for the same games you pay $50.00 for and in several instances, we can get the game until months later when its released in Australia for that high price even when ita available¬†via download (which is blocked to us aussies.

  • my comment would be – if u take into account the amount of work done,¬†artistry¬†involved in developing a game for lets say xbox, ps, pc etc u ll find that u are paying “fair” amount of money for the entertainment value u get from the game, it is however sad to see most people do not want to understand the other side of the story and things like piracy etc are seriously hurting the industry, just like Youtube cant replace movie industry similarly high end video games arent suppose to be compared with iOS or android platform games, but things should evolve so that necessary encouragement be given to artists n prod companies and they continue to work with charm, my verdict = high end games aren’t at all overpriced, if u dont like them u shud take time to ¬†just understand what goes into the development of these games

  • Going by Movie standards, video games are UNDER priced. If you spend 15-20 bucks on a movie on blue ray or dvd, how many hours of entertainment will you actually get for your money? Lets say for the sake of argument you buy a new release movie for 15 bucks and it is 2 hours long and in the period of a year you watch it 5 times (which is generous). That is 10 hours of entertainment for 15 bucks which averages out to 67 cents per hour of entertainment. Now on the video game side of things you spend 60 bucks on a new release title and lets say for a year you average 5 hours of play a week (which is nothing to most gamers). That comes up to 260 hours of entertainment for 60 bucks which averages out to 23 cents an hour paid for the entertainment.

    So maybe you are looking in the wrong direction and its actually movies that are overpriced.

  • The amount of hours you play a video game say compared to a movie at 10-13 bucks for a 2 to 3 hour movie I’d say it’s not over priced at all I think the resellers of used games are way over price they buy them for next to nothi g and sell it back for 10 bucks less is insane I never buy used games totally worth 60 bucks I remember buying ff8 for 80$

  • Andrew Tickner

    Check out the “Humble Bundle” site … you pay what you want; seems the average is around $5-10 depending on platform.

    http://www.humblebundle.com/

  • I feel that most mainstream games are over priced and not getting much in return. In cases like Mass effect, BioShock and Fallout cant complain because of the content provided. Long story short games like CoD aren’t worth it but RPG’s are.

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