Massively Overthinking: Are modern games too cheap?

    
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This week’s Massively Overthinking topic is a submission from reader and commenter camelotcrusade, who takes the industry’s current fight over monetization in a different direction from lockboxes. “Are modern games too cheap?” he asks, probably slowly reaching into a can of worms with a wicked gleam in his eye.

“When you think about it, many other things we buy have increased in price over the last decade but AAA games are still expected to be a maximum of $60, with many of us waiting for sales (or for free-to-play). Meanwhile, games everywhere are adding shops, post-release content, and DLC galore with increasingly aggressive pricing models. How much of this is to make-up margins they can’t capture up-front? How much should an AA game cost in 2017? $75? $90? Is there a price point where lockboxes, gambling, and in-game stores could focus on value-add instead of survival? And how did we get here? Whose fault is it? And how do we get out of this, or is ‘would you like a game with your store’ the future as we know it?”

Let’s talk money!

Andrew Ross (@dengarsw): While games are mostly the same price, you forget the trend towards deluxe collectors editions while also going digital. Deluxe versions of games gives companies ways to pad the bill, while digital helps them cut costs. In fact, I can’t remember the last time I bought a physical MMO CD. Maybe the last one was Wrath of the Lich King?

It’s not an MMO, but one of my favorite games (Undertale) is by an indie developer, and I suspect his ability to finally move out of his parents’ house isn’t from his ability to sell his game but push merchandise. Not only is he getting cash from his game and game music, but t-shirts, plushies, and now emoticons for a popular Japanese messenger service. It’s something AAA game companies can pull off too, if the game resonates with its audience. I’d bought a few Asheron’s Call things from the Turbine store back in the day, plus some World of Warcraft stuff, and that’s just MMOs.

For digital content, I feel like we’ve seen people eat up DLC and skins, especially when it doesn’t kill the playerbase or threaten competition. I’m probably sounding like an old record, but seriously, look at Overwatch. It’s massively successful, but mechanically, the game’s OK at best, struggling in the pro scene, and has a sinful way of releasing most of its lore (out of the game!). That being said, I feel like that last reason also works as a strength: It makes the world more accessible to casuals and even non-gamers. Blizzard gets to skip balancing scenarios and units in favor of animated shorts that help drive up sales of merchandise. It’s a little scary to think about until I realize it also further pushes gaming into the mainstream consciousness.

It’s the fault of companies like EA that prey on people’s psychology to make light content that continually asks for a gate fee and upkeeps. The recent Battlefront 2 debacle is a good, recent example of this. Like Overwatch, its a full priced game with lockboxes. However, BF2 also is largely a multiplayer game, gates actual content, and allows the content wall to be bypassed with real money. It’d be one thing if the content were just skins or horizontal progression (i.e., being able to change a powerful but slow sniper rifle into a medium strength, rapid reloading one a la Splatoon), but it’s raw power.

We may all feel differently about grinding, in that some love it and some hate it, but gamers in general have shown that they strongly dislike games where people with the biggest wallet get the biggest advantage. Developers constantly try to tell consumers that their game won’t do that while still selling stat-granting items in their stores. I’d say blame the consumers for buying things, but I don’t believe most consumers monitor their behavior or spending habits half as well as modern marketing teams. It’s like blaming a deer for getting shot in the woods: It doesn’t stand much of a chance against its predator.

Sadly, self-monitoring is one of the best ways to get out of this. Taking to the streets (or social media) when you realize how abusive these companies are helps too. Supporting business models you like (and also taking that to social media) furthers this. I don’t think we’ll be stuck with digital stores with a side of game as the norm, but we’re in a quick-sand filled jungle at the moment, and it may be awhile. I think focusing on making a good games, AAA and indie, followed by fair, non-stat-associated bonus content (in both digital and physical options) is going to continue to propel good games forward, not only in terms of making their developers a nice profit, but in societal awareness outside of the gaming sphere.

Brianna Royce (@nbrianna, blog): It depends. As camelotcrusade noted, AAA games are being built completely cognizant of the fact that pay isn’t frontloaded anymore; they know they are going to milk DLC and microtransactions later, so if anything, they’re more expensive to the end-user than they ever were, but the fleecing is spread out. Those studios aren’t selling games, anyway; they are evolving IPs into unstoppable forces, so they don’t care whatsoever about their effect on the rest of the market.

A/AA games are offsetting their lower prices by backloading content and quality, and thus we’ve see the rise of early access and the slow death of the mid-budget MMO.

I do think that gamers have become jaded when it comes to ballooning marketing budgets and dirty tricks, and that’s made many consumers far less willing to pay through the nose to be fleeced some more on the other end. The frustration for smaller studios, I know, is that the brunt of that loss of consumer trust is borne by them when it comes to business models, not by the megacorps that drove the trend in the first place. (And yes, I blame the megacorps.)

There will always be games that eschew the “would you like a game with your cash shop” model. We need to pay for and play them and not fund the scum. You have to support the people who are doing things the right way. It is the only way out.

Darn it.

Eliot Lefebvre (@Eliot_Lefebvre, blog): This is going to be long; I apologize in advance. But it’s a complex question, even if the simple gloss is that it’s not so much that games are too cheap, just that our expectations of value and price have advanced at a different pace compared to costs. I don’t think a simple “have games cost more” is going to fix things because what games cost is no longer as simple as the box price.

It’s entirely accurate to say that the price of $60 for a new game hasn’t budged much over time; I remember paying that for a brand-new game when I was in high school, which was nearly 20 years ago now. A lot of other things have changed their prices since then, but game prices have remained fairly fixed. What hasn’t stayed the same is the price of hiring a programming team, and perhaps more importantly, how long that team is expected to keep working on the game after launch.

MMOs, in some ways, broke this as soon as they started existing. Buying an SNES game meant that I got the game, and that was it. There would be no further updates, not that I expected them. That meant that the team who developed Legend of Dog Punters 3 could immediately start working on Legend of Dog Punters 4 once the former shipped, often times using a modified core from the previous game. With an MMO, though, you’re expected to have the game still running in a year and still have to develop based on that game. Online connectivity meant that games were suddenly expected, more and more often, to be supported after they launched.

Seriously, expansions make a lot more sense when you realize that, in some ways, they were always a patch on a business model that already wasn’t working.

Beyond that, the cost of making a game didn’t just go up with inflation. More and more people are required to make a game that can keep pace with contemporary games, for much the same reason that you’d have a very limited audience selling a new car with ’75 stylings. That’s not to say that every single game needs to have graphics so realistic that you can see every bit of stubble on a male character’s face or every single twitch of the female lead’s eyes as she facilitates his emotional development, just that you need to at least be seen as keeping some pace with modern games on a triple-A budget. If you want to put out a credible modern FPS, you simply can’t release a game built around sprites and basic vector mapping.

So games cost more to develop because of inflation, they cost more to develop because of features and graphics, and they cost more to develop because of expected longer tails. You can even see the roots of this in the 32-bit console era, when “longer” became a selling point for a lot of games, and the runaway success of Final Fantasy VII meant games would sometimes ship in multi-CD cases that contained only one CD. That appearance of bulk made a difference.

Oh, and let’s factor in one more fun element: It’s very possible that at this point, your company is noticing that you’ve hit a certain barrier in terms of how many people are going to play games, period. As long as you have a certain box price, a certain list of hardware requirements, and a certain social image, you’re not going to get more players.

So what’s the smart move? Remove some of those barriers. And that box price is definitely a barrier, but that brings in a new problem, where you’re making a more expensive game and expecting it to make more money while costing less. And so we get lockboxes, and nasty free-to-play schemes, and lots of other things that are still engaged in the messy business of figuring out how you can make games cheaper to get into while making more money in the long run.

Can we just make games more expensive? In part, this isn’t going to work simply because the long tail of service is part of the problem. Selling five million copies of Battle for Azeroth is, in all likelihood, not going to pay for a year of World of Warcraft updates, two years of server maintenance, and so forth. And that’s assuming that there are no issues that require extra development or patch time, no unexpected problems, and so forth. People get tetchy enough about paying extra for collector’s editions that usually actually contain some extra stuff; selling an expansion for twice the price is not likely to earn goodwill and buckets of money.

That isn’t to say that stuff like Star Wars: Battlefront II isn’t being mismanaged to all hell. Here we have a pricey game I am absolutely certain cost a lot to develop and has a lot riding on its success… and the publishing company has already shot it in the foot in terms of long-tail support because of early and aggressive monetization. By poisoning the well, EA ensured it’s less likely that the game will actually make money.

What can actually be done? I think we’re going through a period of some growing pains with regards to budgets and what can reasonably done; it’s very possible that the current model of “very big budget for a blockbuster game” isn’t actually going to be sustainable for much longer. But I don’t think that just asking for more money is going to fix the problem, especially when so many other games are competing for attention and eyes. One of the things that I’ve said repeatedly is that subscription MMOs have a problem of needing a base to sustain them when their competition is everything else in the world; asking for $15/month can feel like a lot when I can get 90% of the same experience over here for $0/month.

The trick, as was discussed the other day, is in making people feel like they want to spend their dollars on this game. But that’s a discussion for another time.

Justin Olivetti (@Sypster, blog): It is bizarre and disheartening to see the falling profit margins in fixed-price video games result in more and more aggressive revenue streams. MMO players are no stranger to these, of course, but now it’s really spilling over into all areas of the market with little consensus of the best approach and price points.

Personally, I am not willing to spend over $50 to purchase a game, and if I do drop that much, I expected it to be a “premium” experience with no cash shop tomfoolery. I really don’t mind buying expansions, but I am disgruntled at the practice of withholding content from a launch version to sell to players later at DLC (EA is the undisputed master of this, but that studio is far from alone).

Frankly, I feel that these AAA titles are a runaway train that are not worth the bother of pouring so much resources into them and requiring a large return. That reminds me of the collapse of Hollywood blockbusters and the insanity of gambling with so much money on an unsure return. That’s why I’m more than glad to turn my attention to smaller, leaner studios and their games which can be made for a lot less and don’t require as aggressive a monetization scheme to support it.

Your turn!

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miol
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miol

If you don’t need extra ressources for the implementation of lockbox systems or to artificially stretch out shelf lifes to milk them longer, studios would be just as fine!

Woetoo
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Woetoo

Too cheap? My first reaction is “Yes. Surely?”

Then I think “Witcher 3”.

I can’t help feeling that those developers that follow their passions and succeed end up delivering WAY better games for lower costs than those that follow the money and succeed. Bad games, no matter their origins are always (mostly) going to be bad games.

With a few notable exceptions, I’m not sure the AAA market delivers good games any more. Profitable usually, yes. Artistically pretty, sure. But phone your friend to say “you must play this” levels of fun and enjoyment. Hardly ever.

More passion, less accountancy please. Because with passion and imagination, two guys managed to write a game into less memory than most modern developers can fit their game’s desktop icon into. (Elite).

Start delivering better games, and my answer will be a resounding yes.
Until then, I’ll stick with a “meh, maybe”.

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Iain B

Yup, CD Projekt Red is a perfect example. And they’ve promised to keep it up with Cyberpunk 2077

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Peregrine Falcon

I don’t believe for a second that “AAA games are too expensive to make.” Companies in the past have always figured out ways to save money and still deliver a decent product, and the game industry needs to do the same.

Buy/license a decent game engine instead of building a new one from scratch for every single game. Focus on making good game-play instead of making state-of-the-art graphics that do nothing to improve the game.

Build dev tools that allow the devs to quickly create new content by generating a map and then dragging and dropping items/NPCs on to it so that 4 hours of new content doesn’t require 1,454,734,568 man hours to build.

If AAA games truly are too expensive to make it’s because game companies aren’t being smart about their production process. Period.

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Still Can't Ban This

EVERY engine needs modifications, and many times it is more cost/time effective to custom build. Your concept of how content creation works is laughable. Your entire post tells me you’ve never even made a mod for a game.

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yoh_sl

I’m not convinced that the box price not shifting with inflation is to blame here, not entirely.
I think it’s a corporate culture thing. Look at Monster Hunter World, besides a few collectors editions, it doesn’t appear to have any bad business practices.
And Path of Exile has had a fantastic free-to-play model for years now.

You don’t have to use bad business practices to turn a profit.
These companies are choosing to employ bad business practices for short term gain.

Even if the box price did increase, there is no guarantee that they wouldn’t still be using bad practices in addition to the raised price. Because they don’t just want to just turn a profit, they want all the money.
Wanton greed is not a bug, it’s a feature.

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Zen Dadaist

Nah, everything else is too expensive!

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Alfredo Garcia

The pricing of goods and services, as well as what people will pay and what they say they will or will not pay for them, is as much psychology as economics. Value is an entirely personal metric. As such, I’d rather get greased up and wrestle a shoggoth than try and pin down some objective numbers for what games should cost.

As far as I can see, this whole EA/Battlefront 2 thing (and microtransactions generally) is a more or less free market working as designed. Would I like corporations to behave in a more customer-focused manner? Absolutely. Is that going to happen in most instances? No. That being the case do I think that there should be government regulations in place to deal with and limit bad actors in the gaming industry? Yes. Particularly when attempts to obfuscate predatory practices is involved, as that speaks to intent.

Anyway, will be interesting to watch all this as it shakes out over the next few years.

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Skoryy

Yes, yes, yes, this is exactly the conversation we should be having! Recognizing the situation’s bad is one thing, but you don’t fix anything unless you figure out how you got here and how you plan on getting yourself out of the mess. A month’s subscription, or a gift card, to camelotcrusade for asking this. And one for Eliot for hitting a lot of points I had been pondering on in his answer, and one for Alex Malone for giving us another excellent point of view.

One thing that hasn’t been brought up yet, but I think is vitally important in the discussion, is the evolution of the gaming market in the age of F2P. Check your app store, your console store, Steam, what have you, and there are a multitude of Free-To-Play options available. I blew my mind reading Damien Schobert on Twitter describe mobile F2P sales being successful if 5% of the players actually paid cash. 5%! Now think of that when you’re looking at your favorite game’s cash shop and/or lootboxes.

I don’t have hard numbers. However, I can consider how many players that, once upon a time, may have grudgingly paid up front for a new release, only to now gleefully play F2P games without having to pay one thin dime. Now combine them with other players who balance spending hundreds of dollars on a AAA title versus far less on a B2P/F2P title. Throw in the collapse of the mid-market game and the embrace of gacha by AAA, and I can make the educated guess that the bottom on the gaming market’s been bottoming out for the past decade. Gamers that were reluctant to pay, now have a plethora of options where they don’t have to pay. The big titles are basically embracing the only reliable source of cash left: The whales.

Where this is going, I wish I knew. Gacha’s been merrily trucking along in Japan, and America sold its soul to Vegas decades ago. Even if we did go the Maude Flanders route, I can easily see AAA titles countering by going full Lexus: “You want the ultimate gaming experience? Pay up.” And the whales and whale wannabes will.

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camelotcrusade

Aww, thanks. And a thanks is more than I expected and by far enough to cheer me. ?

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Witches

They are too expensive, everything else in the digital world gives you more for the same amount, the same 100€ that bought me a 1TB HD now buys me a 3TB HD with better tech, virtually every piece of hardware gives us more for the same price.

A car costs more because the parts that make it also cost more, the whole argument that server space costs more blah blah blah, is just a consequence of them not buying stuff they can afford to save money, money that never seems short when they have to invest in stuff like 3d that may well be the future of gaming but definitely isn’t the present.

I remember when one of the arguments was that games had to be printed and packed etc, games went digital but that didn’t make them any cheaper, i pay for the physical disc and box the same i pay for downloading it, using my own bandwidth that i also pay for.

The only thing that will come from a raise in prices, is another raise in prices, lockboxes will not disappear, dlc will not disappear, season passes will not disappear, the nickel and diming will continue but now you will pay more upfront.

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Josh

Personally, I think there’s just too many AAA games released, which dilute the market. Not only does this cut into the profit of game makers, but it also means that we often get badly made games from developers that are stressed about pumping out more and more content.
I really just wish the game industry would slow down and focus on making better games instead of just more games.
And this really does just apply to AAA, big budget games. Having a lot of low budget indie games that are more experimental and diverse not only allows for creative games to have an outlet, but it also allows AAA developers to see how gamers respond to various types of innovations without investing in something that’s a huge loss if it fails.

amkosh
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amkosh

I remember when games cost 19.95. Then 29.95. Then 34.95. Then 39.95. Then 49.95, and now 59.95. So increasing prices is not a new thing. It has been stable for a while now, at least the AAA level.

People think price is set by taking the amount it takes it make it, all the middlemen, and then adding a modest (or not so modest) profit and then you have the price. That is not the case. What determines price is simply what the market will pay. Video games are by definition non necessities, and as such they have a fairly elastic demand curve. Price goes up, sales go down, price goes, to a certain point, because not everyone will buy/use a video game. I’m simplifying things here too, there are many other factors on price.

However, I’m comfortable sayin this: What a game costs to make has nothing to do with its price. What a game costs has everything to do with whether the game is made or not.

Let’s say you make a product, a widget. You do all the math, all the surveys, comparable analysis, and apply all the art of pricing a product. You come back and determine that your widget can at most be priced at 60$, has the best sales/revenue ratio at 45$ and you has a minimum sale price of 40$.

You’re manufacturing team then comes back and says initially the widget will cost 60$ to make, and that over 5 years it will decrease to 45$.

This widget would never be made. While it is true, eventually it will be profitable, the time to reach a profit would be long. Also you have to consider opportunity cost of the investor giving you money for this. He/She is going to only fund projects which give him/her the most potential profit in an opportunity.

Same thing with games, if the cost to make a game is so high, the most likely thing that’s going to happen is the game won’t get made. If it does get made, it will be made with with premium monetization. It will be designed to get you to want those extras. You can call it P2Win if you want, but in reality, all the studio and publisher is doing is getting as much revenue as they can to maximize their profit to keep their owners happy, and most importantly investing.

If that bothers you, ask yourself this: Do you work for free? I doubt many of you do. I also figure most of you like getting raises. Why is it any different for the owners? The other funny thing is many of you are quite probably “owners” of EA, either directly, or more likely indirectly in that your bank, insurance company, etc own funds that invest in those companies.