The PS5 and Xbox Series X games price hike is unpleasant – but not surprising - Tech 2 Asia

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Sunday, July 5, 2020

The PS5 and Xbox Series X games price hike is unpleasant – but not surprising

2K Games has been the first company to commit to next-gen game pricing, setting the price of NBA 2K21 on Xbox Series X and PS5 at an eye-watering $70 – $10 more than its price on PS4 and Xbox One. 

But it looks like 2K Games isn't the only publisher that will implement a price hike on Xbox Series X and PS5 games, as research company IDG told GamesIndustry.biz that other major publishers are considering doing the same.

While this is a very high amount to pay for the standard edition of any game, it's also a necessary price increase. Compared to others industries, we've been fairly lucky when it comes to game prices – and here's why.

Why the price hike?

Assassin's Creed Valhalla

(Image credit: Ubisoft)

While the price of the likes of GPUs, broadband and streaming services have increased over the years (often to correlate with inflation, rising costs and demand), the price of games has remained stagnant for years.

"The last time that next-gen launch software pricing went up was in 2005 and 2006, when it went from $49.99 to $59.99 at the start of the Xbox 360 and PS3 generation," IDG President and CEO Yoshio Osaki told GamesIndustry.biz. "During that time, the costs and prices in other affiliated verticals have gone up."

When it came to the PS4 and Xbox One era, we essentially got a pass. Game prices didn't rise despite developers utilizing next-gen technology, meaning for 14 years we've not had to face the harsh reality of how much game development truly costs. While the price of games has remained at $59.99, the cost of making them has increased massively – with Osaki claiming next-gen game production costs have increased between 200% and 300% (depending on the studio, game etc). That's huge.

While game publishers always need to be aware of prohibitive pricing, they also need to take into account sustainability. If the cost of producing something costs more not only in cash but in labour and resources, then we need to make peace with the fact that we too will have to bear the brunt of that cost.

And, according to Osaki, it seems like just a $10 increase over 14 years is pretty good going – and it could have been worse.

"Even with the increase to $69.99 for next-gen, that price increase from 2005 to 2020 next-gen is only up 17%, far lower than the other comparisons," Osaki told GamesIndustry.biz. "While the cost of development and publishing have gone up, and pricing in other entertainment verticals has also gone up substantially, next-gen software pricing has not reflected these increases. $59.99 to $69.99 does not even cover these other cost increases completely, but does move it more in the proper direction." 

Adding it all up

Hellblade 2

(Image credit: Ninja Theory)

Love them or hate them, microtransactions and paid-for DLC have allowed many publishers to keep prices stable for the past 14 years, as companies can cover their costs with the base price and then make more profit off the extra content. Or, in the case of free-to-play games like Fortnite, they can simply make all their profits from microtransactions. 

We've likely reached a point where the microtransactions and DLC aren't enough to cover the increase in production costs in games. In an ideal world, if the overall game prices are going to go up, I would want to see less (read: no) microtransactions in games which have an RRP of $70. But that's not going to happen.

The cost of next-gen

PS5 vs Xbox Series X

(Image credit: Future)

We know that the PS5 and Xbox Series X are going to be powerhouses and that new technology doesn't come without a price (likely a high one). While we don't currently know how much either console will cost yet, we aren't expecting them to come cheap.

Don't get me wrong: the idea of how much next-gen is going to cost makes me wince. Not everyone has that amount of disposable income lying around - I certainly don't. But, at the same time, I appreciate that a big leap in technology comes with a jump in price.

But even if next-gen games price tags are justifiable in the sense of how much games cost to make, they aren't necessarily accessible. We could end up seeing more players shifting to subscription services such as Xbox Game Pass to gain access to new games, where you have access to new and old games for $10 a month, rather than forking out $70 for just one game - I know that's my preferred route.

But nothing is set in stone, yet, and we're still waiting for the prices of more next-gen games to be revealed. What will be particularly interesting is the price Microsoft and Sony set for their PS5 and Xbox Series X exclusives - as that will set the bar for other next-gen games. Until then, I'm bracing myself for the worst.

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