Quantcast
Jump to content
Search In
  • More options...
Find results that contain...
Find results in...
    1. Welcome to GTAForums!

    1. GTANet.com

    1. GTA Online

      1. Los Santos Summer Special
      2. The Diamond Casino Heist
      3. Find Lobbies & Players
      4. Guides & Strategies
      5. Vehicles
      6. Content Creator
      7. Help & Support
    2. Red Dead Online

      1. Frontier Pursuits
      2. Find Lobbies & Outlaws
      3. Help & Support
    3. Crews

    1. Red Dead Redemption 2

      1. PC
      2. Help & Support
    2. Red Dead Redemption

    1. Grand Theft Auto Series

    2. GTA VI

      1. St. Andrews Cathedral
    3. GTA V

      1. Guides & Strategies
      2. Help & Support
    4. GTA IV

      1. The Lost and Damned
      2. The Ballad of Gay Tony
      3. Guides & Strategies
      4. Help & Support
    5. GTA San Andreas

      1. Guides & Strategies
      2. Help & Support
    6. GTA Vice City

      1. Guides & Strategies
      2. Help & Support
    7. GTA III

      1. Guides & Strategies
      2. Help & Support
    8. Portable Games

      1. GTA Chinatown Wars
      2. GTA Vice City Stories
      3. GTA Liberty City Stories
    9. Top-Down Games

      1. GTA Advance
      2. GTA 2
      3. GTA
    1. GTA Mods

      1. GTA V
      2. GTA IV
      3. GTA III, VC & SA
      4. Tutorials
    2. Red Dead Mods

      1. Documentation
    3. Mod Showroom

      1. Scripts & Plugins
      2. Maps
      3. Total Conversions
      4. Vehicles
      5. Textures
      6. Characters
      7. Tools
      8. Other
      9. Workshop
    4. Featured Mods

      1. Design Your Own Mission
      2. OpenIV
      3. GTA: Underground
      4. GTA: Liberty City
      5. GTA: State of Liberty
    1. Rockstar Games

    2. Rockstar Collectors

    1. Off-Topic

      1. General Chat
      2. Gaming
      3. Technology
      4. Movies & TV
      5. Music
      6. Sports
      7. Vehicles
    2. Expression

      1. Graphics / Visual Arts
      2. GFX Requests & Tutorials
      3. Writers' Discussion
      4. Debates & Discussion
    3. Gangs

    1. Announcements

    2. Support

    3. Suggestions

TheSantader25

What Are Your Thoughts on The Potential Increase of Video Game Prices?

Recommended Posts

sivispacem
On 9/18/2020 at 1:03 AM, Dryspace said:

I have to get this in before the misinformation from people defending against their own interests:

 

Inflation has very little effect on the sale of information.

I don't think you've quite grasped this. You seem to be under the illusory belief that price inflation is solely, or even primarily, associated with physical commodities. Not only is this manifestly untrue (many physical commodities having devalued over the years rather than increasing), it also massively misunderstands basic economic concepts, how developed economies actually work, and indeed how most developers and producers actually function.

 

This isn't to say I fundamentally disagree with the notion of games being overpriced, I just think it's been that way for a long time. But I also understand that companies have to hedge their bets as it's difficult to gauge whether an indie title is suddenly going to explode in popularity, or indeed a massive AAA flop. But the assertion that inflation doesn't impact heavily service dependent and high personnel driven products that often spend five plus years in production before they can ever even reach  a point of sale is bonkers.

 

There's also significant lifecycle costs associated with ongoing maintenance, support, patching, multiplayer services, et cetera which are unusual in comparison with other products. Though not unique to games most other products where consumers receive long term support for a product (anything ranging from commercial software to vehicles to even rented property) that's either an explicit upfront cost, a rolling subscription or baked into the ticket price or payment plan.

  • Like 2

Share this post


Link to post
Share on other sites
Turan

As long as I can buy and sell physical copies I don’t mind it much. But I’m never paying 80 euros for a digital game. 

  • Like 1

Share this post


Link to post
Share on other sites
Dryspace
15 hours ago, sivispacem said:

I don't think you've quite grasped this. You seem to be under the illusory belief that price inflation is solely, or even primarily, associated with physical commodities. Not only is this manifestly untrue (many physical commodities having devalued over the years rather than increasing), it also massively misunderstands basic economic concepts, how developed economies actually work, and indeed how most developers and producers actually function.

Well thanks, but as far as I can discern, your entire post is a non sequitur with respect to anything that I have said. I humbly suggest that you are once again hastening to "corrrect" someone before ensuring that there is in fact something to correct.

 

First, what did I state? I stated that "inflation has very little effect on the sale of information". The very first point you make is ridiculous. You argue that inflation isn't only associated with physical goods by stating that..."many physical commodities devalue over the years".

 

First, I never said anything about inflation invariably applying to physical goods. I made no such claim whatever. But even so: Saying that inflation isn't only associated with physical goods--because their prices sometimes go down--is like saying that overeating doesn't only affect human beings--because sometimes humans lose weight. :blink:

 

Inflation has an effect on everything. The difference is how much of an effect it has, and where those effects are manifested.

 

Quote

But the assertion that inflation doesn't impact heavily service dependent and high personnel driven products that often spend five plus years in production before they can ever even reach  a point of sale is bonkers.

I never made any such assertion about "heavily service dependent and high personnel driven products", so calling something I never said "bonkers" is...well, bonkers. A video game is not a heavily service-dependent product, and the fact that a game can take five years or more to produce has nothing directly to do with the sales price.

 

A heavily service-dependent product is one in which a significant number of people--or labor cost--is involved with each sale. I.e., selling the product indefinitely requires the indefinite employment of a very large number of people. You can't sell--not make, but sell--your product without maintaining the employment of that large number of people. That does not apply to the sale of a video game.

 

The only assertion I made was regarding the sale of information and the effect of inflation on its sales price. And my assertion is correct.

 

With a physical product, after satisfying yourself of a minimum market size, you can start with a target sales price based on what you think the market will bear for your type of product--say $10--and then determine that you can spend say, $6 per unit in order to make a gross profit of $4 per unit. That $6 is your Cost of Goods Sold. If inflation causes the price of labor, tools, electricity, etc. to rise, your COGS will rise, and thus you are forced to raise the price of your product in order to maintain the same absolute profit. This happens constantly.

 

With a video game, If inflation causes the price of labor, tools, electricity, etc. to rise, it does not result in the necessity of raising your sales price.

 

Why? Because those costs are not directly attached to the sale of each copy of your game. With each copy of your game that you sell, the COGS decreases. This is how the sale of information is fundamentally different than the sale of physical goods. If you spend $10,000 on your game, each time you sell a copy, the cost of each copy drops. Unlike economy of scale for physical goods, this cost drop is automatic and indefinite--it never stops.

 

 

Quote

There's also significant lifecycle costs associated with ongoing maintenance, support, patching, multiplayer services, et cetera which are unusual in comparison with other products. Though not unique to games most other products where consumers receive long term support for a product (anything ranging from commercial software to vehicles to even rented property) that's either an explicit upfront cost, a rolling subscription or baked into the ticket price or payment plan.

I already mentioned this aspect. The fact that Blizzard provided free Battlenet servers for what? fifteen years or more (as well as customer service) while taking in nothing more than the initial price of Warcraft, Starcraft, etc. demonstrates my claim that these costs are insignificant compared to the power of information multiplication. (I love when gamers insist that monetization is necessary to support servers costs! LOVE IT!)

 

As I said, the price of video games does not need to go up. Certainly not now. But if you are so sure of your position, why don't you answer the question: Exactly how much do video game prices need to rise in order to prevent a decrease in profit? If you like, you can give a separate answer for "Indie" and AAA.

Edited by Dryspace

Share this post


Link to post
Share on other sites
Algonquin Assassin

Considering I bought an "uncensored" version Vice City for $180 AUD back in 2002 these new games look like chump change lol.

 

In all seriousness it's not all that surprising. I had to look twice at the Demon Souls remaster on the Aussie EB Games site listed at a whopping $124. That's normally what we pay for, for special editions and stuff. Spider-man: Miles Morales is listed as $94 and it's more or less a spin off a bit like Uncharted: The Lost Legacy.

 

I can see special editions/ultimate editions becoming very expensive. I don't mind paying a bit more though. I have loads of money to burn (except on micro-transactions. I'll never give in to them).

  • Like 3

Share this post


Link to post
Share on other sites
sivispacem
8 hours ago, Dryspace said:

your entire post is a non sequitur with respect to anything that I have said. 

I don't think you understand the meaning of "non sequitur". A non sequitur is a fallacy in which the conclusion reached does not follow from the premises outlined. I suspect what you actually mean is a straw man, but your argument comprised such a scattershot smattering of largely unconnected, often quite irrelevant, and frequently entirely false statements it's rather difficult to understand what your actual point is. I don't think even you know what you're trying to say.

 

8 hours ago, Dryspace said:

First, what did I state? I stated that "inflation has very little effect on the sale of information". 

You also said immediately after "...with a physical product, there is a certain significant fixed cost associated with the production of each additional unit" which indicates that you do in fact believe that physical commodities are affected by inflation in ways that information isn't.

 

8 hours ago, Dryspace said:

First, I never said anything about inflation invariably applying to physical goods. I made no such claim whatever. 

I don't think I said, or implied, you did. My actual point, which is abundantly clear from the actual comment you quoted, is 

 

On 9/21/2020 at 8:18 AM, sivispacem said:

You seem to be under the illusory belief that price inflation is solely, or even primarily, associated with physical commodities. 

Nothing you've said above seems to dispute that fact:

 

8 hours ago, Dryspace said:

Inflation has an effect on everything. The difference is how much of an effect it has, and where those effects are manifested.

Again, read my quoted comment above again. You're in effect confirming the assessment I made of your views despite having spent the last few paragraphs apparently (but not actually) disputing them.

 

What makes you think that inflation has less effect on services (which is in essence what video games are) are less affected by inflation by goods?

 

8 hours ago, Dryspace said:

A video game is not a heavily service-dependent product

Yes, it is.

 

8 hours ago, Dryspace said:

the fact that a game can take five years or more to produce has nothing directly to do with the sales price.

Actually the development time is extremely significant in the context of understanding the actual costs of games or other software products, analogous to R&D time within other industries.

 

8 hours ago, Dryspace said:

A heavily service-dependent product is one in which a significant number of people--or labor cost--is involved with each sale

Firstly, you're confusing service dependency with labour dependency. A heavily service dependent product is one that's heavily reliant on the provision of services by third parties. A heavily labour dependent product is one that has a significant number of people or large labour cost directly involved.

 

Secondly, the "each sale" addendum is simply not relevant in many cases; it's far from universal across industries (particularly tertiary industries) and especially so in information services.

 

8 hours ago, Dryspace said:

You can't sell--not make, but sell--your product without maintaining the employment of that large number of people. 

This is as true as it is irrelevant. You might have a point here if companies came into existence to produce and deliver a single product and then cease to exist once the product lifecycle has ended but we both know this isn't the case.

 

It's also not really reflective of the actuality of product delivery as the actual production costs in terms of both labour and material costs are frequently only a small proportion of product costs. Bit we'll come onto that again in a minute.

 

8 hours ago, Dryspace said:

If inflation causes the price of labor, tools, electricity, etc. to rise, your COGS will rise, and thus you are forced to raise the price of your product in order to maintain the same absolute profit. This happens constantly.

This is a wonderfully naïve summary of physical goods. It ignores two of the largest cost influences- initial R&D time (which I'll pick up in a second), and ongoing refinement. In actuality despite inflation the production cost per unit typically declines rather than rises across the lifecycle of product, as the manufacturing and delivery process are refined.

 

Automotive is a good example of this; the first car off a production line typically has a vastly higher unit production cost than a version of the same model produced three or four years down the line. 

 

8 hours ago, Dryspace said:

Why? Because those costs are not directly attached to the sale of each copy of your game. With each copy of your game that you sell, the COGS decreases. This is how the sale of information is fundamentally different than the sale of physical goods. 

The fact you believe this is a "difference" between physical goods and non-physical services illustrates my earlier point about a lack of basic understanding of economics. In actuality no such difference exists, and in most industries the unit cost of physical products decrease with each sale.

 

The biggest factor in influencing this R&D and startup costs, which you handily seem to forget exist. With almost every physical product, a certain number of items will need to be sold in order to recoup these costs; this usually isn't included in COGS which is why it's not a helpful metric in this discussion. 

 

 

Maybe an example will help? 

 

 

Acme Aircraft Corporation wants to build a new passenger plane. They spend 5 years and $500m in development and setup costs before they deliver the first aircraft. Each aircraft sells for $25m and has s production cost of $5m. If they sell 1 aircraft, the total unit cost is $625m. If they sell 25, it's $25m. If they sell 250, it's $7m. 

 

Explain how this differs from games or other software.

 

8 hours ago, Dryspace said:

Unlike economy of scale for physical goods, this cost drop is automatic and indefinite--it never stops.

This is only the case if you assume there are not continuous costs for delivery and support during the product lifecycle, which we both know is untrue. 

 

8 hours ago, Dryspace said:

I already mentioned this aspect. The fact that Blizzard provided free Battlenet servers for what? fifteen years or more

The initial Battle.NET was effectively a peer to peer client with no server infrastructure. They didn't institute a client-server model until a good six or seven years after initial release. Their online model has until very recently always been fairly lightweight in the server side requirements, they've said so themselves on multiple occasions.

 

Blizzard are interesting in that their revenue model is heavily dependent on services external to their core games. Whether these are loot boxes, sanctioned internet cafés, et cetera, it's less about initial title sales. They're not really analogous to other online gaming providers.

 

9 hours ago, Dryspace said:

(I love when gamers insist that monetization is necessary to support servers costs! LOVE IT!)

I don't think you have much, if any, grasp of the costs of maintaining long-term server infrastructures to support content delivery, multiplayer services et cetera. The actual costs for infrastructure are relatively small, it's the personnel costs for administration, upkeep and management which are impactful. There's also other supporting services such as security and telephony/connectivity which are enormously expensive and do scale in cost with the player base.

Share this post


Link to post
Share on other sites
Dryspace
10 hours ago, sivispacem said:

I don't think you understand the meaning of "non sequitur". A non sequitur is a fallacy in which the conclusion reached does not follow from the premises outlined. I suspect what you actually mean is a straw man, but your argument comprised such a scattershot smattering of largely unconnected, often quite irrelevant, and frequently entirely false statements it's rather difficult to understand what your actual point is. I don't think even you know what you're trying to say.

@sivispacem I'm not going to bother replying to the rest of your post as I don't see any....profit in it. I used the term 'non sequitur' correctly, in a manner which you, apparently, do not understand the meaning of:

 

2 : a statement (such as a response) that does not follow logically from or is not clearly related to anything previously said We were talking about the new restaurant when she threw in some non sequitur about her dog.

 

Thank you for publicly demonstrating what an ignoramus I am, though.

 

I have noticed this behavior from you in the past: You are very quick to jump on the posts of other people in order to show everyone that the person's claims are "ridiculous", or "asinine", or "bonkers", etc. The problem is that you are very often wrong yourself, and I would imagine a large part of the problem is your eagerness to expose others as fools without making sure you are as knowledgable as you think you are. Further, I can't make an absolute claim regarding your history, but I have never once myself encountered an instance of you admitting that you are wrong about something--much less apologizing. I can't believe that youre never wrong.

 

Now, for the pertinent question that you ignored: I claimed that inflation has little effect on the sale of information, and that video game prices do not need to rise.

 

If you are sure that I am wrong, you should be able to tell us how much video game prices need to rise in order to avoid a decrease in profit? Be as specific as you wish.

  • Like 2

Share this post


Link to post
Share on other sites
sivispacem
1 hour ago, Dryspace said:

@sivispacem I used the term 'non sequitur' correctly

The definition you're using there is its use as a comic device within literatire. It has nothing to do with discussion. Not that that use is correct either, given that I was, in fact, addressing the material content of your post.

 

More than happy to publicly demonstrate your ignorance given you've asked so nicely.

 

Your claim that inflation has little impact on the "sale of information" (not that we're talking about sale of information but primarily provision of a service) is an assertion made with zero empirical evidence to support it and plenty to contradict it. I don't really have much inclination to address an unnecessarily specific red herring of a question that doesn't relate to that assertion, given that the burden on proof is on you to demonstrate that you are indeed correct. Even if it were true, or relevant, the following statement, "(therefore) video game prices do not need to rise"...now that's a non sequitur.

 

I would posit your refusal to address any other point I've made is a product of inability rather than anything else. The fact the bulk of your response was just an ad hominem sort of reinforces that fact.

Share this post


Link to post
Share on other sites
Mister Pink

My thoughts on prices going up. Well, if it's a uniform price-increase, then I'm a little cynical. But if it's renowned and acclaimed developers increasing their prices then I can kind of understand to an extent. Developing games is pretty risky. The time and investment is huge. Devs and publishers can put millions into a project for 5 years only for it to flop. Then there are games that their success if built off 10, 15 years of building brand reputation. GTA VI might make 1 billion in sales. But that's 20 years of building a reputable brand. For me, you may as well add up the budgets of all Rockstar games and subtract it from the sales made on GTA V as some sort of variate analysis because that 1 billion isn't just made out of thin air. It's 20 years dedication by core team members, key decision makers etc. To me, that's where the value comes from. That's where the value is created. 

 

Then of course, some projects wont receive X amount of budget to create unless investors are satisfied the game will hit Y amount of sales. And again we go back to brand reputation. This is why you can't really just throw money at a production and then expect it to be successful. So imagine you won the lotto and decided to drop 100m on making a game. Without brand reputation, you'll be spending 200m on global marketing to  try get people interested. And where do you get 200m from? 

 

Lets use examples: Max Payne 3 cost 105m to produce. It needed 4m copies to be sold to break even. 

It had a weak debut, selling only 440,000 units in the first month. This missed analyst predictions that it needed to sell 4 million units in order to break evensince it cost $105 million to produce. A year after it was released, "Max Payne 3" finally achieved that goal.  Source: https://www.businessinsider.com/the-most-expensive-video-games-ever-made-2014-7?r=US&IR=T#max-payne-3-105-million-5

 

Now, breaking even in't as clear as units sold multiplied by average cost of game. It's more complex than that. . 4 million copies to break even is the value Rockstar need to entertain Take 2 and investors otherwise that 105m budget isn't made available to develop the game. Because it's all predicated on stocks, investors, and confidence in the brand. Because essentially, it's art, and the response to art/entertainment is very subjective. 

 

To use the film industry as an example. Even Quentin Tarantino has self-funded large parts of his films because the studios know it's a risk to invest in films. But you say, it's Quentin Tarantino. Well, it doesn't guarantee anything to an investor and Tarantino often found himself self-funding. Martin Scorsese, couldn't get the budget he needed for The Irishman from the traditional studios he would go to for funding until Netflix took a risk. 

 

My point is while 70 is expensive, comparatively, to the past, there are so many variables to account for. And one of those is risk. Cyberpunk 2077 is getting funding from Polish government, but it's getting funding off the success of The Witcher 3. There is huge confidence in CDProjekt RED. What about Bioware that have a couple of duds like Andromeda and Anthem? How do you think those meetings go with EA when trying to secure budget to make their next game?

 

I  sort of think the market decides the value. People will pay 70 because it's worth it to play GTA, Cyberpunk, Elder Scrolls and they'll play them for 100's of hours. If people pay it, then that's the value is set. If the price goes too high, many people wont buy it. I also think, even though expensive, 70 is great value. I've over 100 hours of RDR2. That's value to me. Because I can pay 15 (excluding the cost of food and drinks) to the cinema at get 2 hours entertainment. For 70, that's like two or 3 trips to the cinema averaging about 4-6 hours of entertainment. 70 quid, is OK  (relatively speaking) for large AAA games where you might get 20-50hrs entertainment. 

Edited by Mister Pink
  • Like 2

Share this post


Link to post
Share on other sites
Yokelsson

Well, isn't this lovely: 

 

It seems like GTA V on PS5 will cost $75. Let that sink it. A seven year old game that made more money than any other piece of entertainment in history of humanity, and they want $75 for it. Of course, they're gonna be making money hand over fist on Shark cards on top of that.

 

If this doesn't make things painfully obvious, I don't know what more do you need. It's not about higher risk for developers or higher production costs. It's just the good old greed and everyone is jumping on the bandwagon.

  • Like 3
  • KEKW 2
  • excuseme 1

Share this post


Link to post
Share on other sites
owl-man

That price is pretty much like a lot of older games on Steam, one example being Black Ops 2 which still costs 90 AUD or 140 AUD for all the dlc, so I can't say I'm surprised when I see an old game with the price of a new one. Disappointed, but not surprised.
bqWn3G0.png

Edited by owl-man

Share this post


Link to post
Share on other sites
Jason

Placeholders on stores aren't definitive so I'll believe that GTA V PS5 price when I see it... but I don't disbelieve it at the same time either, because it's Take-Two who are literally monetising the next-gen upgrade for NBA 2k, you have to buy a more premium edition to get next-gen version.

Share this post


Link to post
Share on other sites
Mister Pink
5 hours ago, Yokelsson said:

It seems like GTA V on PS5 will cost $75. Let that sink it.

Now that is taking the piss. If this is true, there's no way in hell, I'm supporting that. Shark Carks undermining the gameplay in GTA Online is attrocious as it is, but if that's true then no wonder people are leaving Rockstar in droves. 

Share this post


Link to post
Share on other sites
Midnight Ryder

Games are far superior and take much longer time and much more money.  So yes does not bother me.

Share this post


Link to post
Share on other sites
Commander S
10 hours ago, Yokelsson said:

 

It seems like GTA V on PS5 will cost $75. Let that sink it. A seven year old game that made more money than any other piece of entertainment in history of humanity, and they want $75 for it. Of course, they're gonna be making money hand over fist on Shark cards on top of that.

 

If this doesn't make things painfully obvious, I don't know what more do you need. It's not about higher risk for developers or higher production costs. It's just the good old greed and everyone is jumping on the bandwagon.


 

"But poor little R*/T2 need to charge more, or they won't be able to afford to make more games or updates!"

 

< alternatively, replace with >

 

"But that's understandable - you're paying more for a superior, more modern product!"

 

:beerhat:

 

 

Again, it's not just greed: it's the greed that comes with the confidence of knowing that you have a captive market, and the majority of people would rather stump up more cash than hold off on buying a game for a few months. "AAA" publishers know they're safe to charge whatever the f*** they like, because the audience is going to pay for it anyway... :sigh:

Edited by Commander S
  • Like 2

Share this post


Link to post
Share on other sites
D9fred95

I too am quite excited for the year 2060 when video games with the graphical and gameplay quality of Anthem will cost $600 USD.

  • Like 2

Share this post


Link to post
Share on other sites
cabaccum

As long as there are players who are willing to pay for this, the prices will be raised.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.


  • 2 Users Currently Viewing
    0 members, 0 Anonymous, 2 Guests

×
×
  • Create New...

Important Information

By using GTAForums.com, you agree to our Terms of Use and Privacy Policy.