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The Price We Pay In The Next Generation

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The Xbox 360 is released, and a new generation has started. I’ve noticed that a majority of Web sites and magazines – staffed with folks that should know better – have unfairly criticized the “rising” cost to play games in this new generation. Is $60 really too much for a standard video game? Can a system ever succeed that retails for over $299? It depends on what year you’re in.

According to three Web sites I chose at random:

Federal Reserve Bank of Minneapolis Consumer Price Index Calculator

$299 in 1985 = $423.49 in 1995
$299 in 1985 = $540.76 in 2005
$299 in 1995 = $381.79 in 2005

Tom’s Inflation Calculator

$299 in 1985 = $426.48 in 1995
$299 in 1985 = $544.15 in 2005
$299 in 1995 = $381.49 in 2005

westegg.com Inflation Calculator

$299 in 1985 = $426.49 in 1995
$299 in 1985 = $530.62 in 2005
$299 in 1995 = $372.01 in 2005

[ADBLOCKHERE]It’s obvious from the results that if $299 for a “core” system 10 years ago was passable, then $399 for a premium system is an acceptable price now. It isn’t 1985 anymore! If you want new games and systems be prepared to pay.

At Blogcritics we set the record straight! In the case of the $399 “premium” version of the Xbox 360 it comes with a lot of crap compared to a Playstation “core” system in 1995. I mean crap in the best possible way. It’s unclear what the PS3 will come with if anything, Sony may just depend on all the stuff it’s throwing in the box like Blu-ray capabilities. Unless the PS3 is at least $1000 they’re going to take a massive loss but it should pay off eventually.

So you want to know what the breakdown is on software? I’ve gone ahead and calculated that for you too. According to the above Web sites:

Federal Reserve Bank of Minneapolis Consumer Price Index Calculator

$50 in 1985 = $90.43 in 2005
$50 in 1985 = $70.82 in 1995
$50 in 1995 = $63.85 in 2005

Tom’s Inflation Calculator

$50 in 1985 = $90.99 in 2005
$50 in 1985 = $71.30 in 1995
$50 in 1995 = $63.79 in 2005

westegg.com Inflation Calculator

$50 in 1985 = $88.73 in 2005
$50 in 1985 = $71.32 in 1995
$50 in 1995 = $62.21 in 2005

There you have it folks: we’ve been benefiting from level prices for a long time now. We’ve actually been paying less for hardware and software because the MSRP has stayed constant until now. Don’t get me wrong; I don’t want to pay a penny more for anything but this must be done.

It’s worth it for all gamers to be aware that we’re not getting a raw deal. You can keep supporting your favorite developers without feeling taken advantage of. Now you know, and knowing is half the battle.

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About Rob Faraldi

  • http://www.breakingwindows.com Matt Paprocki

    That’s all well and good assuming you found the $50 price point proper in the first place. There’s no reason they cost that much to begin with, let alone $60. Remember how we were told about disc based media and how it would lower game prices? Never happened because they know people will pay it.

  • http://gamersunitemagazine.com Rob F

    @ Matt

    It’s debatable if there was a need for the cost in the first place. Regardless of your view, there’s certainly a need for it now.

    I don’t remember developers/publishers promising lower prices for disc based games. It was mentioned a bit that manufacturing costs would be lower. When disc based systems like Playstation and Saturn came out dev costs rose.

    Furthermore, if you go with my little “chart” above you’ll realize that because they’ve kept software prices level for 20 years they’re actually charging less. $50 in 85 is $90 today. Pretty compelling.

  • http://www.breakingwindows.com Matt Paprocki

    Games cost roughly $10 million to make.

    Movies cost over $50 million reguarly.

    Combine DVD and a movie ticket and you pay about $30 to see a movie.

    You pay $50/$60 for a game.

    I don’t care about inflation stats. That doesn’t make sense. The cost to produce a game has gone up. It went up for movies too, but I’m not about to pay $50 to see a movie, ever.

  • http://www.coin-op.tv Rob F

    @ Matt

    You have a limited audience when you compare film and games. There are more DVD players out there than game consoles. Hell, some consoles play DVD’s! Because you have the potential to sell more you can charge less. You also don’t take into account broadcast rights, pay per view, a substantially larger global market for film.

    A game might cost 10 Million to make, but what about advertising and other factors included with not only developing but delivering a game to the public? Plus a game might cost 10 million now, but the prices will go up!

  • http://www.breakingwindows.com Matt Paprocki

    Limited audience that pushes the revenue of the industry right up there, if not above, that of major movies every year (and climbing). Yes, there are A LOT of ways to sell a movie, but with a game like, say, King Kong, you have:

    Xbox
    360
    PS2
    Gamecube
    DS
    PSP

    That’s all the same game on different platforms. That’s tons of revenue. If you want to include marketing, movie prices then hit over a $100 million, and they still only charge me $30.

  • http://www.coin-op.tv Rob F

    The game industry rivals film at the box office. WHen you combine DVD sales, Broadcast rights, Pay Per View, etc. film still makes more.

    How much did King Kong sell and make all together? You have some hard worldwide numbers for me?

    Xbox, PS2, 360 all have DVD playback which helps a films chance to succeed on DVD. Not all films cost 100 million for your info. Most films don’t come close.

  • http://www.breakingwindows.com Matt Paprocki

    I don’t have hard numbers for Kong. However, to say not all films cost $100 million would be correct. On the opposite side, you have a film that costs $10 million, it could go right to cable. There’s no theatrical release, and rarely does it end up DVD. The money comes from one place: advertising revenue.

    You’re also right when movies make more. I completely agree. That still doesn’t make the math add up. Lets use a $200 million movie like Kong:

    Massive marketing campaign not even included in that above figure, the special edition 2-disc DVD will be around $20 retail. I paid $6 to see it in the theater. A $200 million movie will cost me $26 TOTAL, that’s with the theatrical experience and tons of special features on the DVD that cost even more to produce.

    A $10 million dollar game will run me $60 now, everytime. That’s going to assume it’s an original title. Take Madden, which uses the same engine year after year (aside from a new console launch in which they usually toy with it). Aside from the license and maybe some new commentary, where’s my $60 going? Why am I paying $60 for a new Prince of Persia when it’s using the same engine, just with a few new gameplay mechanics that don’t come close to justifying the price tag?

    That has nothing to do with inflation. It’s a rip, and there’s a reason I rarely buy new titles. Isn’t it amazing how the price can drop to $30 a month after release these days?

  • http://www.coin-op.tv Rob F

    @ Matt

    You’re generalizing a bit too much. Without real numbers, facts, and figures on film and games I think the discussion is over.

    The dead horse is officially beaten