A significant portion of the video game’s industry has opted with the establishment of a new generation to hike the price of video games from the established $60 to $70. Some in the industry, IE Sony, wanted to increase the amount even further, but the rest of the colluding executives settled on what they viewed as a minor hike of $10.
Industry analysts immediately went into damage control mode to ensure investors that the public would not only accept this new paradigm but do so happily. Sure, they may grumble. This they admit, but at the end of the day, they will roll over as they always have. Unless, of course, they don’t, in which case the hike will be rolled back. Yes, in the same statement of guarantee, the analyst admits it isn’t written in stone, and the consumers might not accept it. This is what is called creating an out, so if your main prediction that is mutually exclusive from your out doesn’t come to pass, they can then take credit for predicting the alternative.
Analysts by nature, sell their expertise and a lot of what they say is pure theorization, so when industries are looking for experts in the field, they will pick them as they have papers out on the topic. Thus, demonstrating an expertise on the matters. Never mind 90% of their predictions never came to pass or were so wrong a drunk sailor high on shrooms could have made the same guesses with a passing understanding of the industry.
Despite the criticism that can be leveled at both the industry and analyst’s methodology, the question remains whether or not the $70 price tag will succeed or whether it is doomed to failure. When it comes to sports titles where the users will buy what amounts to the same game with less features and more bugs, knowing they are doing so, $70 will probably succeed. After all, if a buggy broken mess that is the same game won’t dissuade consumers from buying said game, nothing will.
For the broader industry, the $70 price tag is more likely to fail than it is to succeed for the simple reality that consumers cannot happily give what they do not have. In a recent editorial by Bloomberg, one veteran explained it succinctly.
“When I started earning my own income, left my parents’ house, the standard so far was $50 when I was younger, then it went to $60, and I am hearing it’s going to go to $70. It’s getting kind of ridiculous.”
“We don’t know how long it’s going last. I would rather keep my money in a safe place rather than giving my money to Activision. I do understand they need more programmers, graphic designers. But some of that just seems a bit greedy.”
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Vast numbers of people have seen their income or budget devastated by the lockdowns to the point a $70 game isn’t within the realm of feasibility. Even before the pandemic and lockdowns brought this about, many people still couldn’t afford or justify spending so much on a piece of entertainment.
Economically that isn’t a viable reality for many people. Nor is it a particularly good value when you consider for the same amount you could rent 17 movies from Amazon or buy 4-7 games during a Steam sale.
Beyond the economic reality of having the money or not is growing economic uncertainty among consumers. During times of high economic uncertainty, consumers tend to shrink their purchasing volume and conserve their money to safeguard against potential future hazards. Translating to fewer sales for these companies.
Beyond the economic uncertainty and reality of the situation are two devastating potential unforeseen consequences of this price hike. Many consumers already know a great deal of AAA games are not ready to go when they launch. Instead, it takes a few months of patches to bring them to their peak state, which is coincidently the same timeframe it takes them to begin devaluing as stores look to liquidate their unsold stocks.
Many will wait for the price to decrease on the games and enjoy playing a vastly smoother experience. Games with a season pass of content could see consumers wait till the entire game is out and buy everything in the inevitable sale that will occur to “celebrate” the release of the dlc.
Those that don’t want to wait can and will just buy games used. With no difference between the new and used version of a game, if it is a must-have, saving money will take priority over the luster of having a new game for many consumers. What makes this reality worse for the industry is the fact they gain nothing from any used sale. They will be forced to rely on season passes and downloadable content to earn anything.
Inevitably any gain the industry sees from the price hike will be offset by consumer purchasing habits and methods. The industry believes that consumers at the same volume or at a loss that will be eaten by the gain will simply suck it up and continue buying their games. For those with no shortage of money, this will likely be the case, but a plurality will either be unable to or opt to find cheaper means to acquire their products. Whether the industry likes it or not, the $70 game is likely doomed from the start.