Some things in life are inevitable: death, taxes, and $60 video games. But why do new video games cost $60 — a price that has remained fixed for over a decade — when pretty much everything else has gotten increasingly more expensive? What was the first $60 video game, and what did it do to set the precedent that all new games now follow?
If one were to ask game developers these questions, they'd probably explain why video games cost so much to make. Today, a $60 price tag is rarely enough to allow game devs to recoup costs, which explains why even total flops feature additional DLC packs for sale. Not every game can be like Tetris, which was made for free, and the people who create your favorite titles need to be paid.
Even so, this sort of stagnant pricing doesn't appear anywhere else in the entertainment industry. Movie ticket costs vary by theater, time, and location. Books can have radically different prices, as can seasons of TV shows. The fixed $60 price point for new games is an anomaly, and it's bad for basically all parties.
Since publishers are setting the prices, it stands to reason that the value they decide upon will be in their favor. GameStop makes basically no money on new games, to the point that they encourage their employees to be evil in order to turn a profit.
On average, game publishers take home $45 for every new, full-priced game sold. After marketing, licensing fees, and eating the cost of unsold games, publishers still average $27 a game, which is pretty darn good. By comparison, movie studios only make about $6 per ticket. Even so, games rarely make money, as they're amazingly expensive to make.
When asked about the high price of games, many publishers point to the increasing difficulty in keeping up with the technological demands of newer consoles, but in reality they often make ill-advised choices. One Wired article mentions that the primary reason gamers resell games to GameStop is because they don't think the games are very good.
The article specifically mentions Brutal Legend, which cost an insane $25 million to make, but was a critical and financial flop. Developers Double Fine shelled out a ton of cash to get Jack Black as the main voice actor, and the failure hit the studio so hard that they now focus solely on smaller, less ambitious games.
Call of Duty games have huge budgets, but they also move tons of units. Other, less popular games feel pressured to keep up with blockbuster titles, and wind up going way over budget by including allegedly necessary features. Many believe that a game isn't great unless it has cut-scenes with voice acting, online and single-player options, 30+ hours of content, and a long list of other features that all cost money.
If publishers were a little bit smarter about where they spent their money, they'd be able to make a profit more easily. Mobile games, for example, tend to be much cheaper to develop, and they usually cost less than $10 upon release, but tons of them still turn huge profits. Good graphics don't matter if the gameplay is boring.
When games like Destiny cost some $140 million to develop, anything less than incredible sales will result in developers losing a fortune. On top of that, publishers only make money on new game sales; all the money spent on used games goes directly to the immediate seller. It doesn't take long for used games to flood the market, so developers make most of their money in the first few weeks after a game is released.
If Bungie had dropped the price of Destiny by even two dollars, the game would have had to sell to an additional 400,000 new units to break even.
In the early 2000s, PS2, original Xbox, and Gamecube games cost a uniform $50. When the next generation of consoles was introduced, licensing fees increased by an average of about $10, so companies simply tacked the additional cost onto what they previously had been charging.
While in reality, most games don't turn a profit at $60 per unit, this price was deemed fair, and before long it was the new industry standard.