Pound of Flesh

Let me give you a quick rundown of how I spend most of my time:

• In school (if it's during the school year obviously)
• Playing videogames
• Writing about videogames
• Thinking about videogames
• In school thinking and writing about videogames

Did you notice anything?

That's right!

I don't have a job.

And it’s not for lack of trying that I am unemployed. No one wants to hire a seventeen year old whose primary goal in life is videogames. And that is a shame. But there is something that is even more shameful plaguing the videogame industry. The cost of videogames is just too high. On a consumer level, development level and even publication level the current cost is unsustainable.  In the past year I have bought three games. The truth is that I do not have the funds to buy games as I please. The result is that in one of the fastest moving and growing industries in the world people like myself are getting left behind. Those without the money to afford to stay current are being lost to the tide of change. With next-gen systems on the horizon, now is the time to address the issue of the cost of videogames. 

So, what exactly is the cost of a videogame? On average, a new game is somewhere between $40 to $60 depending on where you buy it and for what system it is on. A used game can range anywhere from $5 dollars to the-not-worth-buying-it-used-price of $55. The average used game price however, tends to be around $13.67. (This price was calculated using averages from http://videogames.pricecharting.com). But, that is just the consumer end of it all. There are also development and publisher costs to be considered. The average AAA game can cost upwards of $200 million dollars. That number may seem extensive, but it is in fact the actual development cost of Star Wars: The Old Republic released in 2011. Now, that may be an extreme example, but it goes to prove the point. The development cost of AAA development is outrageous. Followed by production costs and marketing the total is raised further by several million dollars. 

I mentioned before that the cost of videogames as it is unsustainable. Without change or some type of intervention the entire system of development with collapse upon itself.  Recently, Square Enix claimed that the new tomb Raider had not sold its expected amount of units. To be clear that game sold 3.5 million units in its first four weeks on the market. Tomb Raider is the second fastest selling game this year with Bioshock Infinite taking first place with 3.7 million units sold. Sony’s The Last of Us comes in at third with 3.4 million units sold. And yet, Square Enix still believes Tomb Raider did not met seals expectations. As a result the entire company is now undergoing a “fundamental review” in which the company looks to “cast all of our resources towards extending what makes us successful and thoroughly squeezing out what doesn't”. That means people will be fired. 

And this is not meant to vilify Square Enix anyway. They are a prime current example of something that happens all too commonly in the videogame industry. The cost of development is so high that when a game does poorly the only result is for the publisher to either down size and fire people or go completely belly up. Even the untouchable big three of third-party publishers; Activision, EA and Ubisoft, do this all the time. In fact Tony Key, Ubisoft’s Senior Vice President of Sales and Marketing, said: “That's what all our games are about; we won't even start if we don't think we can build a franchise out of it”. It is for this reason that yearly installments of Call of Duty (Activision) and Madden and Fifa (EA) are made. The cost of development is so high that publishers cannot afford to lose any possible revenue. Without the constant cash cows that are these massive franchises the industry will collapse. That is unsustainable, the system will not last. 

 

One of the early controversies surrounding the announcement of next-gen systems was the cost for consumers for next-gen games. As the foreseeable development costs increase the backlash will untimely hurt the consumer. Games’ going for $70 to $80 new was a frightening reality that most consumers did not want to face. That fear was displaced with statements from both Sony and Microsoft that their games would remain that the $60 price range. However, specifically within Sony’s statement the wording unclear: “we have announced the pricing for our first party line up of PS4 launch and launch window games … $59.99.” Nothing is said of games post launch window. Third party publishers are also continuing to be stinging with information regarding pricing. Only EA has announced that they plan for their games to be approximately $72.00. I wonder how many consumers can afford to continue buying games at that price.  

As a consumer, videogames are becoming increasingly expensive. As a developer, the high costs are increasing development and creative risks. As a publisher, the increasing costs are forcing a system of either winners or losers. Just look at THQ. As an industry, the cost of videogames is unsustainable. Without change the entire industry will come crashing down. I think that is the most shameful of all.