15 years ago, in 2005, the price of a standard AAA video game was unofficially set at $60. The Xbox 360 was released that same year, and the PlayStation 3 followed almost exactly a year later. Call of Duty 2, Resident Evil 4, and Kingdom Hearts II were released, and Harry Potter and the Goblet of Fire debuted in November (the same month that the aforementioned Xbox was released). Things haven’t changed a lot since then; the most recent Fantastic Beasts movie came out a year ago; Kingdom Hearts, Resident Evil, and Call of Duty have all had games come out within the last year; and AAA games still cost $60. That changed, though, when publisher 2K Sports revealed that their newest title in the NBA 2K series would be priced at $69.99 for the newest generation of consoles.

This might come as a surprise; a lot of consumers already consider $60 to be a pretty high price point for a piece of entertainment, so a $10 dollar jump might be seen as games becoming too expensive for the average person to reasonably purchase. It’s an understandable viewpoint, especially considering the fact that the purchasing power of the average American consumer hasn’t budged in roughly 40 years. However, there’s a reason for the hike in price, and it has a lot to do with the way that games are made.

In 2005, a major AAA game would cost $25 – 35 million to develop. For a similar title made today, a studio might be spending upwards of $75 – 100 million, and if a studio (or, more likely, a publisher) has multiple projects being developed at the same time, those costs are multiplied for every game being made. So, game costs have gone up, but why? The answer lies, mainly, in things like graphics; developing graphics is an extremely expensive part of game development. The graphical arms-race that has occurred over the past two decades or so has led to higher and higher spending on things like new tools and more talent. Because consumers keep fueling the arms-race by showing a purchasing preference for games that look better, companies continue to spend more money on their graphics to outdo each other and get consumers to buy their game.

To offer a more in-depth explanation: 15 years ago, when Call of Duty 2 came out, animators and texture artists could only do so much work because computers could only handle graphics of a certain quality. Textures could only be so detailed; there could only be so many frames in an animation before the game would start to lose important frames per second. Because of these graphical limitations, there were only a certain number of artists that needed to be working on a game for it to achieve its ideal level of graphics.

Steam's cover of Call of Duty 2.
Video games have come far in terms of graphic design, which means more money in the creation process.

As graphics became more complex, though, more and more artists needed to be hired in order to up the quality. A character model that might have taken one week of work to complete 15 years ago might take seven weeks of work now because so many more polygons (three-dimensional shapes used to sculpt virtual models) need to be dealt with, and textures need to be much more detailed in order to sell the illusion of being realistic. This leads to companies needing to hire more artists, which isn’t cheap; the general number that most industry-folk give when discussing how much it costs to maintain a single developer is about $10,000 per month, which includes salary, equipment, office space, benefits, and more. Essentially, better graphics lead to more developers, and more developers lead to increasing game prices.

Marketing plays a part in costs too; marketing budgets throughout the entertainment industry tend to be incredibly high, and games are no exception. Dozens of games are released every day, hundreds per week, and trying to stand out means spending money to make sure that people know your game exists. This increase in the cost of making games is why loot boxes, DLC, and microtransactions have become so popular; they act as extra sources of revenue for developers to make extra money after the consumer pays that initial $60. 

It’s important to note, though, that there are some forces that are counteracting the increase in production costs. The games industry has more consumers now than it did in 2005, which helps successful games earn more money than ever before. There’s also been a major influx of new gamers into the market, as COVID-19 has encouraged people to find new hobbies (like gaming) that they can do from the safety of their home, and existing gamers are purchasing more games now that many of them aren’t really able to leave their homes. Games that aren’t as popular, though, don’t necessarily reap these benefits because they might not be seeing an increase in gamers who are purchasing their games. These new consumers might make the market a little easier to bear for developers, but they certainly aren’t a fix to the problem.

The bump to $70 is meant to help alleviate some of the issues that the industry is facing, and it’s a big deal. Playstation officially announced that its studio’s games would start costing $70 across the board, and while Xbox hasn’t said anything yet, NBA 2K is confirmed to cost $70 on their next generation console as well, and a lot of other publishers are considering a move to the higher price point. Games on PC will likely follow suit as the industry at large continues the transition, and, within the next year or two, it’s very likely that $70 will be the industry standard for a brand new, fully-priced game. It’s hard to say what exactly will change as a result of this; maybe demand for games will go down as prices go up, or maybe people will continue buying the same amount of games and nothing will change. Hopefully, though, the increase in price will lead to important changes like better pay for developers, less microtransactions, and better games being developed.

Feature image: Courtesy of clutchpoints.com.

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