Why retail console games have never been cheaper, historically
Recently, we took a look at the history of how much various video game consoles have cost at launch. Research shows that the upcoming consoles from Sony and Microsoft look much more historically competitive once inflation is taken into account (and once expected price drops are extrapolated). But the cost of the hardware is actually not the most significant portion of what you'll spend on a console over its lifetime; the price of software matters just as much if not more (and these days there are factors like online service and accessory costs). In light of this, a few readers have asked us to examine just how the prices for games have changed over the years.
This is trickier than it first seems. Console makers don't set uniform suggested retail prices for every video game released in a given year. Software prices can vary based on publisher, genre, system, format, and more. Game prices are also often reduced quite quickly as a game gets older, so bargain-basement clearance titles can complicate things.
To try to account for these issues, we decided to look at a representative "basket" of games in a variety of genres for each year for which we had reliable data (loosely defined genre list: Action, adventure, fighting/brawler, racing, RPG, shooter, sports, and other). For each genre, we determined a general range of prices by looking for the most expensive and least expensive games we could find with documentary evidence of a contemporaneous advertised price. We then took the average of the high price and the low price for each "basket" to come up with a general range of game prices for each year. To limit the effects of clearance items, we limited our data to games that were being advertised within a year of their original release date (to see the raw data behind our analysis, as well as sources for prices, check out this Google spreadsheet).
Even with all of this, the data isn't perfect. We were limited by the number of advertisements featuring game prices we could easily find for most years. Dedicated shoppers could probably find prices slightly lower than our lows for each year available, and there may be games that were selling above our high prices as well. Also, this list only looks at retail games, so it fails to show the impact of low-priced downloadable games on services like Xbox Live Arcade, PlayStation Network, and WiiWare in recent years.
Those caveats aside, the data show that retail games released today are actually much cheaper than they used to be on a dollar-for-dollar basis. While today's suggested retail prices could easily increase $10 without going well outside historic norms, modern-day costs seem higher than ever when compared to their purely downloadable brethren.
The Cartridge era
In 1982, a copy of Activision's Tennis would run you $19.99 in Sears' holiday wishbook. That may sound like a bargain basement price, but it's actually equivalent to a moderate $48.18 in 2013 dollars. On the other end of the spectrum, a new copy of the Intellivoice-supporting B-17 Bomber on the Intellivision would cost you $39.99 in that same catalog, or $96.38 in today's dollars. Early gaming was not cheap.
Game prices stayed remarkably stable as the industry transitioned to the 8-bit era. While nominal prices for NES games in 1988 were generally higher than those of Atari games six years earlier, the inflation-adjusted prices for games remained at almost exactly the same $60 to $80 level, in today's dollars, with a few outliers on either side.
But prices began to shoot up almost immediately as the 16-bit era started. Carts for the SNES and Genesis featured larger, costlier ROM chips, and those financial burdens were passed on to consumers. In 1990, a copy of Strider for the still-new Genesis could run you $67.95, which is a staggering $120.95 in today's dollars. In 1992, stores were charging $69.99 for high-demand games like Final Fantasy III and Street Fighter II, the equivalent of $116.18 today.
As 1996 came around, prices started to fall back to historic norms somewhat, as retailers cleared out excess stock of increasingly outdated 16-bit games and got rid of cartridges for failed systems like the 32X and Jaguar. But by 1997, high-priced N64 games sent asking prices soaring again. The last few SNES games were also going for often ridiculous prices at this time; a copy of the SNES' Toy Story for $79.99 in 1997 was the single highest nominal price we saw in our research (though other titles were higher on an inflation adjusted basis).
By 2000, cartridges were having their last gasp in the form of some tired N64 releases, but those ROM costs still prevented retailers from lowering the price too much. Wal-mart was charging $79.97 for a copy of the N64's Castlevania: Legacy of Darkness that year even as brand new PlayStation 2 games were retailing for $50. As far as game pricing goes, Nintendo definitely backed the wrong horse by sticking with ROM cartridges for so long.
The disc era
The dawn of the CD didn't bring immediate savings for the console-based consumers, though. New games for the PlayStation and Saturn routinely retailed for $59.99 in 1996 dollars. Some titles, like Virtual Fighter 2, could go for as much as $69.99 ($103.59 in today's dollars). Lower production costs and competition quickly brought those prices down, though, and by 1997 it was hard to find a new 32-bit game for more than $49.99 (still more than $70 in today's dollars, though).
Disc-based game prices generally stayed at the same nominal level of $40 to $50 through 2003, which meant inflation slowly ate away at the real-world value of those games. By 2006, the introduction of the Xbox 360 and PS3 raised the top asking price for games back up to $59.99 again, but the effects of inflation meant those games were actually slightly cheaper than the $49.99 games players were buying in 1997. Meanwhile, it was getting easier and easier to find games at discount prices within a year of their release, as retailers worked to clear out shelf space for new titles.
The real price of a new, mass market, disc-based console game has barely changed in the last 10 years. It's topped out around $60 in today's dollars, averaging around $45 to $50 for discounted and low-priced releases. Adjusted for inflation, that's much less than gamers were paying even during the best days of the cartridge era. Good luck getting any new game in 1993 for the equivalent of $60 today (which would have been about $37 back then).
But retail game prices haven't fallen nearly as far as prices for purely digital games. Those downloads rarely retail for prices above $20, unless they're trying to maintain parity with a retail release. Part of this is due to the costs of physical production, shipping, and retail overhead, and part of it is because downloadable games tend to be smaller, shorter, cheaper-to-produce titles (though this last part is changing rapidly; see the recent release of the meaty State of Decay as a cheap download).
Part of the pricing gap, though, is likely due to the sheer momentum of a retail market price that hasn't changed in real terms in so long. Increasing broadband penetration and increasing competition from the purely digital side of things might be enough to snap the retail market out of this streak and into more flexible pricing in the near future. Alternatively, the major publishers and Gamestops of the world might try to increase their retail prices in an attempt to make up for ballooning development costs.
Remember, though, even if retail prices stay the same for the next 10 years, a $59.99 game in 2023 will be significantly cheaper than the $59.99 game you are picking up today.
http://arstechnica.com/gaming/2013/0...-historically/
