by XboxOZ360 & dkpatriarch 
©2010 Grant Smythe / David Hilton
“
Gaming can be one hell of an expensive hobby.
However, there is more to the problem than just the retail costs of games.
Many gamers consider the retail costs of games and consoles being the main culprit of their fiscal stress, and one could argue that is the case, especially here in Australia where we seem to always pay more.
In fact, game retail prices have remained reasonably stable for over two decades now, and in most cases are even now lower than the initial influx of games two or more decades ago.
There is more to the problem than just the retail costs of games.
As Australian Game Informer editor Chris Stead pointed out in his study article to uncover the high costs of gaming here, retail games prices are reasonable all things considered, and there is no evidence to show price gouging or exploitation by either retailers or publishers, much to his dismay (Chris Stead in Issue#5 of Game Informer Aust, pgs 12 – 17).
So why are costs growing?
Let’s go back say five years shall we, looking at the year 2005 when the gamersphere was a-buzz with the news of the “Next-Generation of consoles” about to hit our lounge rooms and become a focal point in our home entertainment.
They were no longer being pushed as simple game consoles, aimed at the minors and younger teens and twenty-somethings, but with the three major players sights set firmly on the household as a whole: mum, dad, the kids and even grandad and grandma as well, a true ‘family experience’.
Back then there were 3 main console rivals: Sony, Microsoft (the newer kid on the block at the time), and the old stalwart, Nintendo who was working on their gaming ‘revolution’ after disappointing Gamecube sales, but still dong well with the portable Gameboy Advance and DS, released the year before. The PC games still looked better, but new consoles were on the horizon to challenge them.
But my, things certainly have changed haven’t they.
We now have a bewildering choice of often-changing SKUs and colours for both home and handheld consoles alike. There’s multiple 360, PS3, and Wii versions many like to keep upgrading to, as well as all the accessories (eg. wireless adaptor, driving wheels) and peripherals (Kinect, Eye Toy, Move controllers) that are part-and-parcel for the ‘modern gamer’.
Then adding to the many Nintendo portables the DS/DS Lite/DSi/DSiXL/and the upcoming 3DS, Sony have attempted to budge into the market with the PSP 1000, 2000, 3000, and GO!. Apple’s iPhone and iPad and other mobile phone devices have joined them with gaming apps that compete very strongly with the portable gaming console experiences. And the valiant PC is still holding its own, but requiring lots of expensive upgrading to stay ‘competitive’.
So if you are a gamer today, you are going to be tempted to own a lot of different gaming devices in order not to miss out, which is also one of the major contributing factors, and those devices keep rapidly changing, sometimes annually, to something that often seems better.
Go back again five years ago, or even earlier, and games still cost basically the same as now: the cost for the higher end games here in Australia was $AU109.95 (now $AU120), then $99.95 ($AU110), and then $89.95 ($AU100), with Classics coming in at $30 – $40 less than the initial game.
Collectors Editions were fewer and would usually see an extra $20 – $50 tacked on to those figures, pushing game retail prices to $AU160 – $AU180 for Collectors or Limited Edition, depending on what they were, similar to the current Collector and Limited Edition SKU’s being made available.
Naturally there wasn’t the proliferation of those types of special edition SKU’s then as there are now; far from it in fact. Whereas now we have around 6-7 out of 10 games being released that have some form of Collector/Limited Edition, or a specific Exclusive Retailer Edition (ie; only available, say, at EB Games/GAME/JB Hi-Fi), back then it was as low as 1-2 out of 10 that would have the honour of being called a Collectors/Limited Edition.
Publishers only increase special editions if they can sell them for more (often tying new releases in with ‘Special Release Console Bundles’) and so gamers are buying these premium, more expensive versions, adding to their overall game costs. The prices stay ‘much’ the same, but the number of choices increases dramatically.
That aside, the present retail cost of games has only risen $10 across the board. However, to our advantage, unlike earlier, we now have some retailers selling release day games well below the RRP (recommended retail price) in order to gain the advantage over their competition, offering bonus swag as incentives. The number of retailers selling games (and even cheaper used games) has also increased.
So you could argue we have even more choice now than we did even five years ago, and at an actual cheaper purchase point, let alone say 10 years back or further still.
Where the biggest cost is…
What has changed now is the sheer number of games for the different consoles, PC, portables, DLC (like XBLA , Wiiware, and PSN) as well as DLC additions to existing games, and phones in the form of apps.
Again let’s go back 10 – 5 years. A new game would be released approximately once a week or even two weeks in many cases, then that moved up to around 2 – *3 games per week or *fortnight as we got closer to 2005 (much fewer on Gamecube!).
Now here in 2010, we can have upwards of 10 retail games being released in just 7 days (not counting DLC, portables, STEAM, Games On Demand or apps), with upwards of 7 – 10 games being released on the same day across all three major platforms. God, if we took the above mentioned into consideration and DLC choices, the number of games available to gamers these days has simply exploded beyond comprehension.
In effect, now it’s basically impossible for any gamer who is living well within their means, or their parents means in some cases, to purchase and play every game being released, even if they stuck to just the one platform.
However, it’s not uncommon now to find a Nintendo Wii, an Xbox 360 and a PS3 sitting in the lounge rooms of most gamer families and gamers alike. As previously suggested, to add to that sheer number of choice, we now see a huge push from publishers to secure pre-orders on games well before release via the likes of Collectors/Limited Editions that are only available via pre-ordering through retailers.
Some games like Assassin’s Creed Brotherhood and Halo Reach, Mafia II and Dead Rising 2 have multiple versions (3-4) of the one game releasing at different price points – on the same day or within the same week. If one was to acquire a standard edition ($AU100) of each title, that would amount to a staggering $AU400 minimum in just one week.
Where choice can be a burden
While this is great for us as gamers as a whole, having this choice combined with the desire to have the latest and greatest is the primary reason gaming is costing serious gamers an arm and a leg to simply stay up with the latest games.
The social side of gaming means whereas in the past we could discuss Goldeneye on N64 or Tomb Raider on PS1 and most our friends would be able to associate with our experiences, now there are so many titles that it is hard to keep up with common experiences to share. In order to play with our friends we need to be part of the whole online phenomena that now exists, which was not available in 2002-2005 as it is now.
This plethora of choice has created a new breed of gamer, the non-keeper-gamer. The modern desire to have everything now at any expense, along with impulse buying or “I’ll get around to playing it eventually” thinking, means many gamers are simply buying more games that they often don’t finish or even play, be they retail or downloads, adding to the individual’s cost factor.
Just exactly how many uncompleted games have you got in your collection, or better still, how big is your collection? Is it like it once was, or do you find yourself owning less, but buying more?
Naturally one could argue that game publishers are obviously making a killing with all these consumer choices, but in fact, game publishers are all basically losing money each financial year. Some by millions, some by tens of millions annually.
Add the large number of releases spread across every gaming platform (including phones) from each publisher, with huge expensive teams now required to create many bigger modern games, plus the smaller market share for many of the titles, and you can see it’s the huge amount of games hitting the shelves or download zones that are creating the paradox of more gamer spending but less profit for many publishers.
Choice is a great thing, but it can also be a curse.
Is the solution for the gamer to simply stick to one platform? But which one? What if a game on another platform seems made just for them?
Of course choice means you don’t have to buy, and many are opting for this option as they become jaded or confused by modern gaming. But for gamers who used to pride themselves on their wide variety of gaming platforms and game genre skills the challenge is becoming too great.
So what is the future for gamers?
The future, at least in the medium term, looks grimmer rather than brighter.
With the likes of publishers like EA Sports and Activision taking heavy steps to “‘limit the supply of content in pre-owned titles” (in other words try to sabotage used game sales) and with ‘full game’ digital downloads seen by many as the future with its high fixed pricing due to lack of retail competition, we can only expect being a gamer to become even more expensive.
Thus making that crucial choice about which AAA title to buy, or which new peripheral (Kinect/Move) to get, and sadly which game and gaming gadgets or gear to miss out on entirely, means for some of us that time enjoying games is fast disappearing and becoming more of a stressful time, rather than fun.
Will over-saturation mean the gaming industry will face a ‘correction’ in the future or will gamers choose to limit themselves more to a smaller and specialised sphere of gaming to avoid constant decision making torment? Have your say below.
©2010 Grant Smythe / David Hilton
xxxxxx
Filed under: Blogbanter, Console gaming, Editorial, GameBanter, Xbox 360, Xbox 360 News Tagged: | Chris Stead, ds, DS Lite, DSi, DSiXL, EB Games, Eye Toy, Game, game costs, game informer australia, Gamecube, high cost of gaming, iPad, iPhone, JB Hi-Fi, Kinect, Move, next generation consoles, Next-Gen, Nintendo DS 3D, PSN, PSN Pro, Steam, This-Gen, Wii, XBLA, Xbox 360 collectors editions, Xbox 360 limited Edition
Quick comment, I think you’ll find it was Issue#6 of Game Informer Aus, that had the article by Chris Stead
Thanks Nick, yes I believe it is, and he’s just done a brilliant follow-up to his earlier article on the Australian R+ rating . . . they always write decent stuff, as opposed to some mags that fill their pages with pics and a lot of ‘street-talk’ – because it’s trendy or in. I admire them for sticking to details, facts and good journalism.
Actually I don’t think it is so much the price of games or the amount of good games out there, I think a big factor in this gen being more costly than the others is gamers need for surround sound systems, HD TV’s and now 3D TV’s and of course the price of add-ons like Kinect and Move that is raping our wallets of all our hard earned quicker than we can fill them up.
Great article, I’m happy the media is starting to catch on that things are really starting to get out of hand.
Here’s my take, and I have been making this comment on so many sites lately that I think I’ve honed it relatively well. Somewhere in the early 2000s publishers started to adopt the “AAA game” business model, emulating the safe bet Hollywood blockbuster. With this came the beginning of the push towards appealing to the mainstream gamers (they call it “broadening the appeal”), and the mainstream gamer is pulled in by things that offer immediate gratification. The focus changed from creative gameplay to things that appealed to the mainstream i.e bigger explosions, better graphics, more visceral violence, more gratuitous action, more weapons, etc etc.
For years they pushed these things heavily in their advertising, making them more and more important to the industry because they became more and more important to the mainstream market. This created a scenario where the market had to constantly be more and more impressed, and the ever growing mainstream market came to simply expect things that were once amazing feats. We’re at a point now that games cost 5-10 times as much to make than they did ten years ago because anything less than the “AAA” game is considered too risky. They spent years heavily marketing aspects of gaming that had little to do with the actual gaming, and more to do with the visual or visceral appeal of the game. These things are expensive.
With this came the move away from all niche genres, and a mass homogenization of the market. Anyone who played a PS1 probably understands just how much more variety we had in our games back then. The publishers have put all their eggs in the mainstream basket.
The problem with this is that this business model only works if the industry grows infinitely. You can keep making the standard for making money on a game cost more and more to infinity if the industry grows along with it. However, if there is even a slight stutter in growth, or even a hard stall, the entire industry crashes because the very existence of the industry itself has come to rely on the most expensive games to make.
Used games and multiplayer drove the industry. Used game sales created revenue for gamers to purchase new games, and this is a major factor in the growth of the industry the same way it is for the vehicle industry. Multiplayer was pushed heavily as well, and it is at the point where publishers feel like most games have to offer multiplayer at this point. Now that the growth of the industry is slowing, these things are no longer in the publishers best interest. The mainstream is now fanatical enough to find ways to buy games even if their used games are worth too little to want to trade in, and multiplayer, while formerly a selling point, has come back to bite the ass that created it because it keeps people from buying new games. At least that’s what they think.
Just like any industry approaching financial crisis, the focus is not on how to lower the costs of maintaining profit, but how to get more profit out of current products. The banking industry is doing this right now too, with bank fees being charged for everything at a rate unseen in history. Publishers want more of your money, even though it was their toxic business model that put them where they are.
Gaming makes more money a year than any form of entertainment in the history of the planet Earth, more than music, movies, and literature have ever made. If this 16 billion dollar a year industry cant even keep itself afloat despite it’s massive consumer support, then I’m sorry to say, but it deserves to crash. Publishers will not let go of the business model that made them rich because they created an environment that depends on it. It’s probably that the only way to fix this is house is to burn it down build the new one stronger.