I’ve been gaming for a good while now and I don’t even want to think about the amount of money it has cost me over the years. Gaming isn’t a cheap hobby, especially if you like to have the latest games and hardware the instant it’s released. But should it be quite as expensive as it currently is?

Let’s be very clear. Developing a decent game is not cheap. Not even close. But when things cost this much money is it wise to charge your customers such a fee that, in general, each game requires careful consideration? This has always been the case too, it may actually have gotten a bit better over time. I recall that the latest version of Street Fighter 2 on the SNES cost roughly €100. Don’t even get me started on what NeoGeo games were going for back then. So prices seem to have been going down gradually over the years and the industry as a whole seems to have grown alongside of it.

For some reason console games seem to be the most expensive. A quick answer here is that the production of these games costs more. However, PC games are usually 20% cheaper than the same game on consoles. A lot of the effort in producing said game should at least be shared, right? So why are the console games more expensive? Probably because the installed userbase for PC is much higher than for the average console. So on PC’s the potential number of units sold is higher.

What makes the problem even more interesting is the quality of the game. Great games will justify a higher pricetag. Games like GTA generally offer excellent quality so people don’t mind paying the pricetag. This has been proven since GTA 5 grossed over a billion in sales in the first week or so. But how do you incorporate this into the price? All developers claim that their game is best thing since sliced bread.

Mobile gaming has changed the notion of the price of games (and software in general) even further. How come games can be this cheap and still be profitable? The high profile games on mobile, like Infinity Blade, cost only €4,50! Granted, mobile games probably require less resources to produce, but is that cost 13 times less? The answer here is probably that most mobile games these days, like Infinity Blade, get additional income through in-game micro-transactions.

So, if micro-transactions work for the mobile games, shouldn’t it work for console games too. The situation for consoles is actually fairly similar. Extra, downloadable content is more and more common these days. But instead of lowering the price of the initial game these have been kept the same and the cost of the DLC is so high it can surpass that of the original game. Take a big game like Assassin’s Creed 3, that was sold for approximately €60 when it came out. The game featured a singleplayer campaign made up of 12 “sequences” and also sported a multiplayer component. A couple of months after the release an extension to the singleplayer was released. For €10 a player would be getting one whole additional sequence. Basically double the price of what you got for a sequence in the original game and that purchase also included the multiplayer.

Apparently the success of mobile gaming comes from the low price point. Buying a game for your phone is much less of a risk than it is for a console, and because of that a lot more people do so. When buying a game will set you back 60 bucks you want to make damn sure it’s a good game.

The higher pricepoint also doesn’t automatically mean increased revenue. One reason for this is that people who bought the game may want to sell it again to get some cash back (potentially to buy the next game) and a lot of people will be looking for those second hand games because of the price of the new game. So if we assume that games are resold once on average the publisher might as well have sold the game for half the price. If they did sell the game at half price two people would have the game creating a larger userbase for online gameplay and as a potential market for DLC. Also, if the initial price of a game is lower selling it is less interesting because it will bring in less money.

Perhaps an open market mechanism might be the fairest solution. With this I mean that demand directly drives the price. If more people want the game, the price goes up. If nobody wants to pay that much the demand will drop and the price will drop as well. Until the price drops to a point where demand starts rising again and that will increase the price again. Something like this could be incorporated into the digital stores relatively easily and might provide an interesting experiment at the very least.

Another approach is to start selling games in pieces. Telltale games has been very successful with their episodic content. Each episode costs around 10 bucks so the purchase threshold is much lower. Releasing a game in chunks has a few other benefits like more potential for improvements (based on feedback from the earlier episodes) and shorter release cycles (no more waiting a year for a next installment). The downside is that each episode is much smaller so finish much sooner. Besides Telltale other publishers have tried this model. Most recent is the Killer Instinct game on the XBOX ONE. That game is free to download but offers only a single character. Additional characters and gameplay can be purchased as DLC. Basically you pay more if you want more.

A third option is a subscription model that used to be common with MMO’s like World of Warcraft. In this model you pay a recurring fee each period that will give you continued access to the game.  This can generates a recurring influx of money but also requires continued commitment to deliver new content. Making this model only interesting if there are enough subscribers each period. Downside for the gamer is that when you stop paying you lose access to all that you have built. Also if you needed to pay a subscription for each single game things could get very expensive for the avid gamer. This model has been tried and hasn’t shown the most success. World of Warcraft is the only real example of this model working. But a subscription from a publisher covering more games seems to be the better option. Sony already has something like that with it’s Playstation Plus service, but there the user has no control over what games are on offer.

We also need to be realistic. Creating high-quality games is not cheap. Not even close. GTA 5 cost over 250 million dollars! That money needs to come from somewhere. A balance needs to be found. One way this is also happening is through crowdfunding. Sites like Kickstarter are filled with games looking to get that initial investment. Prices are usually much lower than at retail. The reason here is that the developer knows from the start how many copies will be sold so it can set the price accordingly. After the release additional copies might even be sold, possibly making the game (very) profitable. Downside of this model is that as a client you are taking a leap of faith. You may not be getting a good game or any game at all if things really go south.

So, is this just me wanting to pay less for my console games? That too (I’m dutch), but mostly because I feel I don’t have to pay there price anymore. The current high prices are putting a brake on the growth of the industry. New platforms, like iOS and Android are luring not only gamers but developers as well. They are showing that alternate pricing models can be viable. If the console vendors don’t do something about it they may well find themselves obsolete.

Update: While I was working on this piece news came out that Nintendo is in fact looking into alternative pricing models. What they are looking into is similar to the free market model that was described above. Only difference is that the demand & supply is linked to a single user. So, if you buy a lot of games, they become cheaper. It’s somewhat similar to what Nintendo has already been doing with it’s premium network. There you would get ‘credits’ for buying games and you could use those credits for buying new games. This new model looks to be expanding on that.