Of the many ongoing video game controversies happening right now, the one that has united most fans against developers and publishers is the rising price of video games. Specifically, recent months have seen Nintendo, Xbox, and likely developers such as Rockstar Games go far beyond the “standard” of $60 or $70 that has been the “status quo” for the last several years. That being said, there are many within the industry who are fine with defending the price increase, including Shawn Layden, who was the former US head of PlayStation. He feels that prices should be higher, for the simple reason that they weren’t higher in previous generations.
In a talk with GameIndustry.Biz, he noted:
“I think it’s because everyone’s afraid. No one wants to be the first one to raise the price, because you’re afraid to lose traffic. So what you do is you just end up eating into your operating income, your profit margin. The cost of construction is just way too high. If you’re going to spend over $200 million to build a game, your margins are super tight, unless you can expect to sell 25 million units. Unless you’re Rockstar, [you] should not expect to sell 25 million units.”
He also bragged that when things took “less time and money to make,” the rewards for his Sony crew were much greater:
“There were more sports cars in the parking lot in the PS1 era than there were in the PS4 era, because if you’re selling 20 million units at $60 for something that only cost you $10 million to make, that’s different than selling 20 million units at $60 for something that cost you $160 million to make.”
So, is Layden right here? In some ways, yes, but there’s meaningful context he’s intentionally avoiding or forgetting. For example, the biggest differences between PS1 era titles and PS4 era titles are scale, scope, and depth. One of the biggest problems in the gaming industry is the self-imposed inflation of trying to make each game “as big as possible” versus what they did in the previous generations, like the PS1 generation, where it was all about making the best games possible.
It’s not gamers asking for $500 million budget games. They just want great games to enjoy and play. Sony recently spent a reported $400 million on a team shooter title and bragged about how it was “the next big thing,” and it lasted two weeks. No pricing model could’ve saved that.
Game pricing will inevitably go up, but the catch is that the price has to match the quality. If it’s there, gamers will buy the games, and recent history has proven that.
