Game Prices are going up, but Microtransactions aren't going away

With the impending release of the PlayStation 5 and Xbox Series X at the end of 2020, some news has been circulating regarding the pricing of games made for these consoles. That news is that retailers are expecting to charge $70 for these games. Considering that big-budget games haven't had a price increase since roughly 2005, when the Xbox 360 was released, should tell you that this is probably going to turn out to be the case - new games in 2020/2021 for the new consoles will likely be $70, and yes, the digital versions will too. After all, a dollar is worth significantly less now than it was 15 years ago - that's just how inflation works.

But what I see a lot of people saying, including even game industry veterans, is that they welcome this change because games are too full of microtransactions, "Digital Deluxe" editions with mostly just small day-one DLC as perks, physical collector's editions with chintzy trinkets that command $100+ price points, and of course lots of DLC that players have to pay for. 

I'm here to tell you that all of that stuff is not going away, not even with a $70 price tag. Why? Because we already accept all of that. Sure, we complain and moan on Reddit and Facebook and elsewhere, we click the thumbs-up on a Jim Sterling video that spends 15 minutes spewing pure vitriol for the state of today's game industry (and usually that response is justified), but here's the most important thing we do: largely, we still buy the games. Right now, the game industry is banking on the notion that even at $70, we'll still buy the games versus walking away from this pastime. Frankly, right now, they've got every reason to squeeze a little bit harder. After all, what were we going to do instead - risk catching COVID going to bars with our friends? OK, some of us will go and do that, but it's not because video games were too expensive or whatever. 

Simply put, major game publishers have spent the last decade normalizing all of the ways they made additional money beyond the base cost of a game. There are a few exceptions here; for one, CD Projekt Red has a policy of giving away post-release content with their games like The Witcher 3 series and the highly anticipated upcoming Cyberpunk 2077. Even EA is experimenting with a "buy the game and you get the game and everything it comes with" (gasp!) method with their Star Wars games (probably mandated by Disney after the Battlefront II debacle) like Jedi: Fallen Order and the upcoming Star Wars: Squadrons, but overall, we're looking at a huge swath of publishers that are just licking their lips at the prospect of selling microtransactions and DLC to new and existing generation of gamers playing on new hardware. 

What Choices Are There

Sure, when gamers see the news that nope, the higher base price doesn't preclude them from being offered dozens of tiny extras for a few bucks at a time, they will attempt to rise up. A few publishers may even relent. But the trends will continue on in the exact way they've been going otherwise. How do I know this? Simple: it's a profit model that the corporate structure demands. Maybe some activist CEO will occasionally balk at making extra profit they don't really need and actually make that sentiment known to their customers, but the simple fact is that any corporation with publicly-held stock chases maximum profits (note: there is no ceiling on such profits) any way they can because the stockholders demand it. There are reward structures built all around lowering costs and maximizing revenue. A new generation of consoles and a new price tag won't undo any of that. 

It is possible, however unlikely, that gamers will rise up in unison and in large amounts, boycott everything they feel is wrong with the industry. Maybe they'll refuse to pay the $70 price tag. They'll scream and moan and possibly get online and threaten the lives of people responsible for perpetrating exploitative DLC and microtransaction schemes. They'll boycott loudly. They'll doxx, they'll make long insulting videos, and flood comment sections with hateful language. (Many of these are unreasonable and often criminal activities, and I do not support or suggest doing that, but I listed them because this is almost inevitably what happens when some gamers feel slighted by publishers and industry insiders.)

And will publishers see that, take heart, and simply take those exploitative elements out, give the players the things they were originally charging for, and try to gain good will with their gamers? If you look at what happened with Star Wars: Battlefront II, where a big uproar started over the exploitative lootboxes included and in response the developers converted away from the microtransaction and lootbox model, you might be inclined to say that yes, making a big stink does work. However I believe that it was the uproar combined with Star Wars owner Disney, a company whose leadership does not like being involved in the making or publishing of video games and would much rather put it in someone else's hands, that had a critical hand in convincing EA to make a change here. 

And think about it for a moment: if EA's leadership were suddenly convinced that exploitative practices like day-one DLC/microtransactions and lootboxes were so wrong, wouldn't they have made these changes across their whole catalog of games? Now, I'm not sure the folks who probably take this stuff too far with doxxing, threats, and the like have really noticed and/or realized yet, but the simple fact is that EA hasn't changed any of the rest of their catalog beyond the Star Wars franchise games. 

Is There No Hope? 

I think the simple fact is that if gamers want to stop certain business models from being thrust upon them when they are shopping for video games, not only do they have to do the research, vote with their wallets, and not buy the games that violate those principles - ever - but they also need to accept that some games of a certain style, caliber, or production value simply won't get made anymore. The fact is that a medium-sized publisher with a decent but not great stable of AAA intellectual property is not going to go out on a limb and spend $150 million and 3+ years making a game if they can only sell it for the base $60 (or even $70) for a copy and not make any money on transactions that they don't have to then outlay tens of millions more on making (like, say, post-release DLC like Gearbox or Bethesda make with their single player games). 

And you can do these numbers yourself. If a game costs $150 million to make and promote (i.e. advertising budget included), and you sell it at $70 a copy, and the retailer/digital store takes 30% of your sales (keeping in mind that retail stores often take up to 50% instead, but let's just call it 30%), then you have to sell over 3 million copies of your game just to break even if you're not charging any additional money for add-ons of any kind. Many big-budget games don't get near 3 million sales. 

So let's slim down the budget a bit. Let's spend half that amount - $75 million - on a game. That cuts your development time in half, or you can pay your employees less. Of course, if you just cut their pay and benefits, the quality of work will likely be lower since you're not attracting the best talent anymore, and they may wind up take longer to finish the game, which then costs you money you didn't originally budget for. But let's ignore even that and just say that without a doubt it'll just cost the $75 million. Now you have to sell 1.5 million copies (and again, any copies sold at retail give you less revenue than digital). Seems like a good idea, right? 

But what if you predict, correctly, 20% of the gamers buy a $90 Deluxe edition? Now you've got a cool $21 million to play with to either put into the budget of that game, or of your next. What if 50% of the 1.5 million players buy $15 worth of cheaply-made DLC? That's another $7.5 million you can invest in making the game bigger or better for every player, possibly furthering sales even more. You can see that with a few offers of simple stuff and a few basic trinkets, you can make up some of those lost budgets and improve your game on its squeezed budget for all gamers. Then there are the models for Season Passes, game access programs for monthly fees (like EA's Access program), and more. All of which are not necessarily forced on players but can help shore up the iffy financial decisions that making games often proves to be. Of course, all of this revenue could be just piled up in a company war chest, or paid out as bonuses to greedy executives, or as dividends to the shareholders to drive the stock prices up - I won't deny that big publishers are greedy by nature (what public corporation isn't?), but adding these premium paid features to their games gives publishers extra cash and the option to do with it what they want. 

And of course, not all publishers need to do this. The biggest franchises, often built over decades, will sell upwards of ten million copies almost without fail, but we've heard many times about games selling upwards of even one million (which sounds like a success, right?) barely breaking even or even losing money for a publisher, and with the numbers above, I think you can see how that's a reality.

Let's Set Up An Example

Take, for example, Saints Row. It's a AAA game property, a fairly big IP in the games industry, but it's not as big as Call of Duty, Halo, Grand Theft Auto, or Uncharted. The studio members at Volition along with their publisher Deep Silver have confirmed they're working on a new Saints Row, but I seriously doubt they are going to spend ungodly amounts of money and time making this like Rockstar does with their huge properties. That's not how a mid-range publisher succeeds. And if they know they can't make four bucks per download of some DLC it took only a day's worth of work to make, then the scale of the entire game will have to be pulled back in order for the publisher to want to even finish making the game in the first place. (This is one of those things many gamers don't understand: making a game is actually quite a risky maneuver, and many games over the years that are generally considered good or great actually lost money.) 

I suggest that maybe, we just accept that the next Saints Row game may not be quite that much bigger or badder than the previous games. Sure, it's been something like 7 years since the last major game was released, so I'm sure the graphics will be better this time, but will it be bigger? More packed with things to do? More full of character, life, silly quips, and 80s references from overpaid actors and stars? If it is, maybe it'll be because they charged $70 and are charging for some microtransactions, DLC, and silly Deluxe editions. And if we rise up and tell publishers we won't accept those things, then maybe the next entry in the franchise after this one will have to be a little bit smaller. Maybe it won't be made at all. 

We Already Consented; It Will Continue

It is easy to point out large profits by some companies and say that the video game business is charging us too much for their products. In many cases, that is a valid argument, but it's not always that way, and the good companies, the ones who try very hard not to rake in ridiculous profits, they're the exception on the other side of the spectrum. In the middle is a swath of publishers and developers who are trying to make big, expensive games while staying in business, keeping their shareholders happy, and also trying to make their players happy too - and many times doing one comes at the cost of the other. Sometimes some companies come up on the right side of the equation, and sometimes they don't. Either way, I guarantee all of them are looking at the $70 price tag they believe they will be able to charge starting towards the end of this year, and evaluating what they can get away with - while avoiding the ire of becoming the next meme-like bad game company, like we've seen happen over the years on-and-off with EA, Activision, Bethesda, Ubisoft, and more. 

Even then, gamers collectively have short memories, and even if any one person holds a grudge for a decade or longer, most won't - and plus, there's always a new generation of gamers coming up, ready to spend their parents' money, who don't know about past transgressions yet are wowed at the fancy newness of some game trailer being shown. I don't say this to insult those gamers or question their motives or credentials, but every major US-based game publisher has been guilty of exploiting their customers in one way or another, often more than once. It's all on a big cycle of getting away with little exploitative things, ramping it up to get record profits, finally getting busted by the public when it gets to be too much, then "redeeming" themselves with some solid releases. And nearly all of the major game publishers are on different steps of that cycle at any one time. 

For example, right now, EA is trying to save face by delivering Star Wars games with no microtransactions after the Battlefront debacle, while Bethesda is doing poorly this year due to exploitative practices in their online games while there has been no major new single player game - the kind of thing that usually puts them back in players' good graces - seen in nearly 5 years and their upcoming releases like Starfield have no hype built up and no release date. Meanwhile, Ubisoft's exploitative practices from the last few years are mostly forgotten, but they've delivered some just flat-out mediocre and disappointing games in the last year. I'm sure they'll turn it around soon, but the point is, the cycle will continue. 

Does a $70 price tag preclude or prevent publishers from this cycle? Have gamers already flat-out rejected spending a cent over $60 for a game? The answers to both questions is no. 

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