Game Pricing

I watched this video from Extra Credits:

I find this problematic. It misses a key point.

Cost of products is not defined by what it costs to make them. It’s defined by what people are willing to pay for them. Then you figure out whether you can produce the product for that price. This is a key point of economics that is quite often missed. Therefore, the question shouldn’t be why people are not willing to pay more (although you can definitely ask that as well), but the question should be why hasn’t the tools and processes kept up with the needs? Why are graphics still so expensive? Shouldn’t there be tools to make that easier and thus cheaper? Shoudn’t the engines keep up with the progress as well?

The video has another kind of a funny presumption. It assumes game companies have some sort of inborn right to expect profits. No. There should be competition and competition will eventually kill some of the companies. That’s culling of companies is not actually what we want, but it is a necessary side-effect of capitalism. We, as consumers, don’t have any kind of obligation to keep the companies that can’t keep up with the competition alive.

Should we support companies that are doing a good job of providing us with entertainment? Of course. However, we are living in a world, where games are still on the rise and even though they have established themselves as a major part of life for many, many people, I don’t think it’s quite clear what form those games will take in the future. Maybe there won’t be as many AAA-games in the future, because the demand doesn’t meet the supply. Can you put this on the consumer, who isn’t willing to pay more than 60 dollars for a product, when they can use that 60 dollars in so many different ways.

I mean, for me, that’s six months of Netflix subscription or four MtG drafts or maybe three to five indie games or several paper RPGs in PDF form. I mean, Fiasco would be $12, Monsterhearts is $10, Apocalypse World is $15 (on sale from $20) and Blades in the Dark is $17 (down from $20 as well). That’s $54 in total. Now, where would I put my money? For me, all these four alternatives are superior. Easily. I could add six movies at a theater as well, but I don’t think that price holds very well everywhere (and I pay that because I usually go to a small hobbyist theater).

There are still plenty of people who are paying that $60 for their AAA-games, but with all the options out there (I mean, for many people $60 might mean not eating for several days), it’s hard to justify that. And companies definitely can’t fall back on bitching about the customer not willing to pay more.

Also, as the number of gamers has grown, we have seen that since the audience is no longer a bunch of very dedicated hobbyists, people’s expectations on the prices are changing as well. Casual gamers aren’t going to put $60 regularly on games. They might do that every once in a while, but that has to be a really interesting title or they need to have an excuse to pamper themselves or something.

So, TL;DR, you shouldn’t put it on the consumer to be willing to pay more. You should see what you can offer for the price the consumer is willing to pay.

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