On the cusp of the PlayStation 5 and Xbox Series X, there’s been endless debate on what’s most important with “next-gen.” Is it faster load times? Better graphics? The increase in overall raw technical power that can soon rival a PC? While all pretty good answers, 2K announcing that NBA 2K21 will cost $69.99 on next-gen systems instead of $59.99 is a decision that could define this generation.
In 2005, Activision took a big leap and released Call of Duty 2 at $59.99, marking the start of the $59.99 price point. Financial experts in the industry estimated the price point would increase alongside the PlayStation 4 and Xbox One, but publishers instead started releasing more DLC and experimenting with all sorts of special editions. These adjustments were a means to offset the steadily increase of costs to develop games. Former Sony president Shawn Layden explained in a recent interview at Gamelab Live (a global digital forum) on the current landscape of creating AAA games. Layden said that the cost of creating games has gone up “ten times” and the current AAA game model isn’t working. So yes, a price increase is long overdue and there should be plenty of benefits to reap from it, but that also doesn’t mean we could be in for a bumpy ride.
Taking a business approach, having the price for games increase to $69.99 will do wonders. While many see it as “only” a $10 markup on the micro-level, large publishers should see a significant revenue increase. With the added revenue, publishers would have the ability to create more jobs to avoid possible crunch periods in game development. Working game developers into the ground has been an ongoing problem in the industry, and if the added revenue from increasing game prices can help relieve that, or increase the wages of those developers, then we should fully support it.
You might be asking, “Okay, I understand increasing the price of games can potentially help game creators, but how does it help me?” Good question. Seeing that you’ll have to pay more money for something now than in the past typically doesn’t sit well with people. However, there is hope. Up until now, Sony and Microsoft have kept the price of the PS5 and Xbox Series X completely under wraps. Knowing that the landscape of game pricing is about to change and it’s safe to assume those two publishers factored this increase in their financial projections, what if the PS5 and Xbox Series X cost only $500? What about $400?
Sony does not want a repeat of the PS3, where it effectively priced much of its fans out with a $499/$599 price tag. It’s possible that the $10 increase in games might be enough for Sony and Microsoft to sell these consoles at a slight loss, knowing the money can be recouped through game sales. Offering the consoles at a more affordable price, we can practically guarantee sellouts for these consoles. That will ensure higher game sales of next-gen titles at the new $69.99 price point straight from the get-go. You win by getting a console that won’t cost a month of rent, and the publishers win with higher game sales.
As is the case with most good news, there’s usually something bad that follows shortly after. Raising the price of games to $69.99 will most certainly benefit larger publishers, but smaller ones might see rough times ahead. With the cost of creating games becoming more and more expensive, consumers already have to be somewhat picky when deciding what games to buy. A higher base price point unfortunately raises the possibility of some of these smaller publishers effectively shutting down or being bought. In 2018, Telltale Games shut down as a result of poor sales. Telltale created amazing narrative, choice-driven stories based on popular licenses, sold these games at less than the $59.99 price point, and still experienced poor sales. Lesser-known titles will slip under the radar more frequently, and because of that, more of these publishers could also shut down.
Ultimately, increasing the price of games is inevitable. Having this change occur alongside major console releases only makes sense, but publishers need to be smart about it. Consumers are not going to react kindly to a hike in games, even if inflation demanded an increase for years now. One way to ensure a smooth transition is to sell the PS5 and Xbox Series X at an affordable price. Allow consumers the financial flexibility to actually be in a position to buy next-gen games. Provide better wages for the talented individuals behind these games, make them feel wanted. Hopefully, publishers will be transparent and proactive about utilizing the revenue increase that’s sure to follow. Otherwise, people will feel slighted and think this was all a money grab to line the pockets of higher executives. Publishers have the power to paint themselves as heroes or be portrayed as villains.
Which will it be?
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