Nobody wants to hear about a price hike—except they are on the gaining end. However, in a comment last week Capcom president Haruhiro Tsujimoto said the prices of video games are too low. According to Tsujimoto, video game development costs have risen astronomically while the price of video games has remained the same.
The era of $70 for video games began about a year ago. Triple-A titles like God of War Ragnarök and Gotham Knights sold for $10 higher than what gamers were used to. Today, it has become almost a norm for Standard Editions of triple-A video games to sell for $70—and it has been adopted by virtually all large publishers.
However, Capcom has been one of the few publishers that remains stuck with the old canon. Games like Street Fighter 6 has a price tag of $60 instead of $70. However, that may change any time soon. Tsujimoto suggested that raising the price of video games would be a “healthy option” for the industry.
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Tsujimoto made the statement at the Tokyo Game Show as reported by Nikkei. While speaking at the event, the Capcom president spoke on how he believes video game prices are too low.
“Development costs are about 100 times higher than during the Famicom era, but software prices have not gone up that much,” said Tsujimoto. “There is also a need to raise wages. Considering the fact that wages are rising in the industry as a whole, I think raising unit prices is a healthy option for business.”
The debate on Tsujimoto’s case for video game price increase
The video game industry is currently facing a looming strike action from SAG-AFTRA. One of the issues in contention is an increase in wages for performers to counter the impact of inflation. However, Tsujimoto believes that inflation has “little to do with the game industry”, citing that people still bought video games during the Lehman Brothers stock crash of 2008.
“Just because there’s a recession doesn’t mean you won’t go to the movie theatre or go to your favorite artist’s concert,” said Tsujimoto. “High-quality games will continue to sell”.
The costs of quality video games in 2023 differ from what it cost to make them in the 1980s. Triple-A titles of this decade require more time, people, and resources to make. Even smaller titles are still many times more complex than games of the ‘80s and ‘90s.
That means developers now spend more to create great games than they did 3 or 4 decades ago. These dynamics are what Tsujimoto used to back up his suggestion for higher video game prices. However, those on the other side of the fence can argue that video games now come with season passes, virtual currency, add-on content, and cosmetics that continue to milk players after the base pay.
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In fact, most players end up paying 2 to 3 times the initial cost of a game through in-game purchases. In-game purchases have become the new goldmine for developers and publishers. For example, Take-Two Interactive made about $2.28 billion from in-game purchases in 2022 which accounted for 65% of the company’s annual revenue of $3.5 billion.
Interestingly, when developers talk about the rising costs of video game production, they rarely talk about the rising recurring consumer spending on in-game purchases too. However, the aim of this post is not to draw conclusions, but rather to make comparisons and allow you to draw your own conclusions.
How video game production compares to movie production
When talking about increasing the price of video games, the next best entertainment media to compare video games to was the movie industry. This also makes sense (to us) considering the increasing collaboration between the movie industry and video game industry.
A-list movie actors are increasingly making more than cameo appearances in video games. Also, video games are increasingly getting movie adaptations. So, that’s the justification for this comparison. We will compare them based on a number of indices.
Cost to consumers
According to Statista, the average price of movie tickets in the United States hit $10.53 in 2022, rising from $9.16 it used to be in 2019. Over a three-year period, the price of movie tickets has grown by around 15%.
It’s important to mention that the average price of a movie ticket can vary depending on factors like the type of movie (IMAX, 3D, or standard), the time of the day or week, and the location of the theater. Tickets are usually more expensive on weekends and after 5 p.m. and in big cities and urban areas. Therefore, the price of standard movie tickets can range from $6 to $13 while that of 3D and IMAX range from $8 to $20.
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In terms of video games, the $60 has remained stable for over a decade and only recently changed to $70 for some games. PC games usually have a lower price (mostly $50) due to lower production and distribution costs. However, PC games also experience the most price swings from free-to-play games to premium games with prices over $100.
So, while the price of video games has remained unchanged in a decade, that of movies has swung up by 15% in three years. This will be a useful point to argue for the increase in the price of video games.
Production time
On average, it takes more time to produce an AAA game compared to top-tier movies. On average, it takes about one and two-and-a-half years to make Hollywood movies. Out of this time, about 800 days are spent in the development phase.
Pre-production usually takes about 146 days while production and post-production take 106 days and 160 days respectively. By the way, these are averages that can be shorter or longer depending on the complexity of the movie. Animations take considerably longer.
On the other hand, it takes between 3 and 5 years to make AAA games. Just like movies, this will also depend on factors like the size of the development team, available resources, and the complexity of the game.
Duke Nukem Forever holds the Guinness world record as the game that spent the longest time in development. It took 14 years and 43 days to make the game. Also, movies are mostly 90 minutes to 3 hours long. However, video games usually have from 6 hours to over 20 hours of content. Those in favor of a video game price hike will back up their argument with this point.
Size of the production crew
The average number of people involved in movie and video game production varies depending on budget, complexity, genre, and scope. According to Statista, the average number of crew credits in the top 1,000 films between 1994 and 2013 was 588.
Although we were unable to find the same average for video game production, a game like Red Dead Redemption involved a team of over 1,000 people. That gives a hint to how bloated the payroll of a video game company can be.
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Also, it usually takes between $50 million to $100 million to make movies. On the other hand, the cost of making triple-A games has steadily risen from $1 to $4 million in 2000 to over $200 million in 2023. Several reports suggest that GTA 6 will cost over $1 billion to make. This is yet another point that may justify an increase in the price of video games.
Do you think the price of video games should increase or stay the same?
Inasmuch as gamers will hate to see a new price tag for a triple-A game, it may be an inevitable turn of events if the price of video game production continues to rise. If the status quo remains the same, a time may come when some studios may be forced to close down.
For gamers, this appears to be a choice between the devil and the deep blue sea. Inasmuch as gamers may not like the idea of paying more for triple-A titles, the sound of the demise of their favorite studio may sound worse. We would love to hear your thoughts in the comment box below.
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