It is without a doubt that the video game industry has improved tremendously over the years. The industry is continuously raising the bar in terms of quality. We are also witnessing a greater diversity in the types and categories of games. But there is still one issue that is restricting the industry, and that is the standard price tag on video games. Moving away from standard pricing will increase innovation, improve overall game quality and allow game developers to capture some of the sales from the used games market. Read below for the argument against the standard pricing for video games.

Focusing on What makes games best:

In a great amount of games we see different gameplay types that do not fit with the core, but rather feel forced into the game. For example, shooters are susceptible to having unnecessary driving sequences. Unlike Half Life 2 and a few other anomalies, most of them have gotten them wrong. The problem with the forced gameplay modes is that not only do they not fit well with the core gameplay, they feel awkward, disrupt the momentum and in some cases can be downright frustrating. At the end of the day we wonder why they were included in the first place.

Another very common example is the inclusion of multiplayer mode. Again it feels mandatory for a $60 priced game on the market to have some sort of multiplayer component to it, regardless of the component being worth playing. In a lot of cases this mode is included in the game solely for the sake of inclusion. It is almost pointless for shooters to have a multiplayer component unless they plan on making it unique or on par with the Halo series or the recent CoD games.

The major problem with the substandard gameplay and multiplayer modes is that it adds to the cost of development for the game. These additional costs do not create value for consumers. However these costs are passed down to the consumer. Without standard pricing, developers will be able to focus on what makes their games best. This will raise the value per dollar for the consumers. With the elimination of extra costs of development, the developers will not need to pass these costs on to the consumer.

Innovation Unlimited:

Flower is a great milestone for the industry. The game was developed by a professional game designer and was priced very differently to other games on the market. By restricting only those ideas that can be charged a standard $60 price, we are potentially missing out on a lot of innovative ideas that come in different sizes. Innovation and ideas come in different sizes and should not have any boundaries.

Capturing Revenue from the Used Game Market:

One of the hot topics talked about in the industry is the success of used games sales. Some developers have voiced their concern in this regard. One would imagine that the most sold and bought second hand games are the ones that are short, low on replay value and of lower quality. In other words the game is not as highly valued by the consumers. That is not to say that it is a bad game, but rather people would prefer to buy it at a lower price. If the games with lower values are priced at lower prices, more people would be willing to purchase the game first hand. If bought at a lower price, people would also be less reluctant to sell it back as not only would the price be lower, but the resale value would be even lower. Furthermore gamers would be less likely to sell a game they feel is of good value. This would allow the developers to recapture some of the used games sales market.

Price Vs Quantity:

The optimal price-quantity values would vary on the individual demands for each game. There is the question of whether the increased quantity of games sold would offset the decrease in price. I personally believe this would be the case because the majority costs for a game are fixed costs. That is the cost of development and advertising. The variable costs, that are the cost of manuals, cases and discs, are minimal. The success of Steam, Xbox Live and PSN present the opportunity of almost eliminating the variable cost entirely. Hence the costs of games have high operating leverages and therefore the benefits of increased sales quantity are large. When this is added to the point that some games are of lower value to the consumers, the increase in quantity should theoretically more than offset the decrease in price for the games of lower value.

Another potential argument would be that consumers can wait for the eventual decrease in price of video games. However by the time this happens, the hype and advertisement for the game has run down if not completely died out. In addition it would have been replaced with the hype and advertisement of an upcoming or newly released game.

Overall Conclusion:

Games are different from other forms of entertainment as they have the potential to provide a more immersive and deeper experience. In order to let innovation run rampant, we can not have developers forced to create a “one price fits all” game. The consumers will benefit from greater innovation and a greater value for their games without standard pricing. The prospects of lower development costs and the chance to regain revenue lost to the used games market mean that the developers also have a lot to gain from the move as well. It’s a win-win situation, theoretically.