There was a time when AAA titles in the video game market could see significant variation in price based on their production costs as well as a wide range of other factors. However, that hasn’t been true for a very long time, seeing as how the $50 to $60 range has long since become the standard.
Why Has $60 Become the Standard Price For Video Games?
For those who are curious, there is no profound reason for why the $50 to $60 range has become standard for AAA titles in the video game market. Instead, it is the product of a self-reinforcing phenomenon. In short, each time that a consumer buys such a title at a price in the $50 to $60 range, they become that much more accustomed to it. Over time, this translates into an assumption on the part of the consumers that the $50 to $60 range is the “rightful” range for the price of a video game. As a result, setting a price outside of the range can be pretty risky for even the most anticipated releases because it will generate considerable dissatisfaction by breaking consumer expectations. Something that can snowball with remarkable speed in this inter-connected era.
With that said, $50 to $60 is still pretty expensive, meaning that there are bound to be people out there who are less than enthused about paying such a price for even AAA titles. Unfortunately, there is reason to suspect that AAA titles might be underpriced rather than overpriced in the present time.
For instance, there has been a fair amount of inflation. To be exact, the Bureau of Labor Statistics state that 2019 prices are about 48.99 percent higher than 2000 prices, which is the product of about 2.12 percent annual inflation throughout this period of time. As a result, even if we assume that the inputs needed to make an AAA video game have remained constant from 2000 to 2019, it seems reasonable to say that the nominal price of an AAA video game should have seen some increase because the purchasing power of a 2000 dollar was higher than the purchasing power of a 2019 dollar.
Of course, the inputs needed to make an AAA video game have not remained constant, not least because there has been a huge change in what makes an AAA video game an AAA video game. Nowadays, players have very high expectations for how an AAA video game looks as well as a how an AAA video game plays, which in turn, means high costs expended on meeting those high expectations. There are some people who might remember when the video game industry was still starting up, meaning that they might expect video games to have relatively small budgets. However, that is simply no longer the case in present times. Speaking bluntly, the video game industry is now capable of beating TV, movies, and music by pure size. Due to this, while it is difficult to come up with exact estimates of the costs of making AAA video games from an outsider’s perspective, it isn’t uncommon to see figures of hundreds of million for the most anticipated titles in recent times.
Combined, these two factors suggest that the $50 to $60 range might be underpriced when it comes to AAA video games. Certainly, it would explain why video game companies are putting so much effort into capitalizing on DLC as well as microtransactions, which presumably provides them with further revenue streams that require less in production costs. However, it is worth mentioning that there are some factors that have worked in the opposite direction as well. One particularly excellent example would be the increasing popularity of buying video games through the Internet rather than through brick and mortar stores. This is important because it reduces the cost of sales for video game companies, seeing as how producing physical copies, packaging physical copies, and then sending out physical copies are laborious and time-consuming processes. In the present time, the bigger video game companies that tend to make AAA video games still have to pay them to some extent because they haven’t gone fully digital, but they don’t have to spend anywhere near as much as when the Internet was still fledgling infrastructure.
Should You Still Be Spending $60 For Each Video Game?
The question of whether people should be spending $60 on AAA video games or not isn’t a very good question. Fundamentally, different people are willing to pay different prices for the same products, meaning that it is difficult to say that a particular price is clearly right or clearly wrong. Instead, it is more useful for interested individuals to figure out whether they themselves are willing to pay such a price for an AAA video game.
Interested individuals can do this using their intuition. However, if they want a more systematic way of thinking about it, they can base their decision on the expected entertainment value of the AAA video game in question. Essentially, they should come up with an estimate for the number of hours that they can expect to get out of the game before dividing its price by said estimate to come up with the cost per hour of entertainment. If they don’t have a problem with the figure that is produced, chances are good that the AAA video game is indeed worthwhile for them; if not, well, there is no harm to them waiting for the AAA video game to go on sale at some later point in time. Of course, there is still the issue of coming up with an accurate idea of how much entertainment they can expect from the AAA video game. However, said process should be easier than ever before in modern times, not least because it is so easy to find footage of the games as well as people commentating upon them. Combined, this should provide more than enough information for interested individuals to come up with a relatively well-informed assessment based on their personal preferences.