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Why do video games cost so much?

With the ushering in of the "next generation" of gaming everyone has experienced not only increases in graphical capabilities, but prices have increased on the software side too. And so you ask, why do video games cost so much and where is all this money going? Very good question and Forbes has your answer. They did a nice write-up of where this money trail is headed, how much a game actually costs, and talks about the risks publishers and developers take on. And of course they use Gears of War as their example, delicious. It's a very good read and a very good graphical representation of all the facts. Interested? Then check out where your money has gone.

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Reader Comments (Page 1 of 1)

KineticOnline1

12-19-2006 @ 9:19PM

KineticOnline said...

Kinda intresting, i'd love to see the breakdown of where the money goes for the people in the UK & Ireland pay (aka the extra $30)

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lp2

12-20-2006 @ 12:56AM

lp said...

"Kinda intresting, i'd love to see the breakdown of where the money goes for the people in the UK & Ireland pay (aka the extra $30)"

Umm, we don't pay $30 more for games in the UK do we?

Most new games, if you buy them from the right place cost around £35-£45 which would be the same as the US + VAT (which they pay tax in addition to any quoted value)

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Bennyishere3

12-20-2006 @ 3:34AM

Bennyishere said...

Any "extra" money people pay in other countries is because of fees. Norway is a prime example (mainly because I live there...). We pay up to 599 NOK for a new, non-MS 360 game. Retailers have even begun to price games at above 600, but those are to be avoided... I get my games from a specific retailer that sells them for 499. They sold Gears of War for 399!

599 NOK equals 90 US Dollars! This sounds ridiculously expensive, but it's really not. Norway is, if not THE, one of the richest countries in the world. That's thanks to oil, fish and fees on just about everything. So, EVERYTHING is more expensive than in the United States. Norwegians has a higher income than everybody else, so it's made up for. That's why Norwegians love spending money in cheap, foreign countries, while everybody else hates spending money in Norway. I always multiply with 9-10 to get the Norwegian price of a US price, even though it's only 6 (or less, as the dollar is getting weaker) when you use a converter.

This is why converting Yen to US Dollars doesn't really make a good picture of what the Wii should cost in the US...

Back to the article though. I must say, this explains NOTHING :P That's how I see it. I just think games cost much because they need to make more money. It's that simple. This article suggests on a lot of stuff like risks and whatnot. I call these smaller factors that don't really justifies the increase in price, mainly because they've always been there.

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GhostDoggy4

12-20-2006 @ 5:48AM

GhostDoggy said...

So, why is it in some other areas of the globe they are paying less than what American consumers are paying?

I am glad to be using to the best of my ability to play the demo first via Live and not drop money on jokers for bad games. But when you truly consider the life-cycle of a popular game, it could be more than $60 when publishers start charging $15 or more of minute amount of additional content download (Ubisoft and Ghost Recon).

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Peffer5

12-20-2006 @ 4:12PM

Peffer said...

It was interesting, he broke it down nicely.

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me6

12-20-2006 @ 5:12PM

me said...

Fuck ebgames and brick and mortor store bring on E-commerce quickly why the hell do they get way more than the publisher. They are killing video games. Then they make hordes of of money on resales which is a major profit considering they buy low and sell high. I would imagine the games and consoles would cost a lil less if they were eliminated. I guess they would sell less, but in these days who isnt shopping online. this is rediculous..we should boycott places like gamestop/ebgames

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wkcr7

12-20-2006 @ 5:15PM

wkcr said...

Bennyishere: I also live in Norway, and completly agree with you!

Anyway, You were lucky to get Gears for
399! I saw the special offer too, but now the price has gone up to 549 ... (Atleast when I last checked ;_; ) I had hoped to get if for this really good price the day I get my Xbox 360! ;)

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