After pouring 10 hours of gameplay into this summer’s most overlooked title, Deathspank , I realized that I only spent about $1.50 per hour of entertainment, an incredible bargain, and likely the cheapest form of leisure activity that I’ve spent time with all year. It got me thinking, however: When compared to other forms of entertainment that I indulge myself in, are video games among the cheapest?
I’ve participated in several activities over the last few months and have listed the per hour cost of entertainment in the chart below.
Even with Guitar Hero and Mass Effect 2, which had the highest costs of entertainment in the video game category, I still felt that they delivered an appropriate amount of entertainment value. This of course, does not even take into account the residual value that each physical video game possesses (my ability to trade-in games or resell them for cash at retailers like GameStop), which would increase the value and decrease the per hour of entertainment cost.
Looking at the list, it seems logical that video games are simply priced too low for the value they provide to consumers. So why not increase prices?
Activision Blizzard, our industry’s rogue cowboy, has been doing just that over the last three years. Guitar Hero, which is priced at nearly 3x the cost of a regular game (at least, its band kit is), has sold millions of games worldwide; Call of Duty: Modern Warfare 2 was priced over $10 higher in the UK and shattered sales records; and lastly, the infamous Stimulus Map Pack, which was priced 25% higher than previous map packs, shattered records as well.
What is interesting is that core gamers stormed forums to give Activision Blizzard a tongue lashing for increasing the price of Modern Warfare 2 and the Stimulus Map Pack, but very few complained about the price of Guitar Hero, which on average likely provided a higher per hour cost of entertainment over any other video game. While the collective logic of consumers is called into question in this scenario, there is a perfectly good reason as to why we complain about higher prices for standalone titles and downloadable content (DLC); it is a fallacy of value for non-tangible products.
When buying laundry detergent, deciding between $5 for a 1 liter bottle of detergent and $7.50 for 2 liters is a pretty simple decision; I can physically see the difference in utility and the same is true for nearly any other product with a tangible utility. As a culture, we have been so conditioned to evaluate products based upon physical characteristics that it becomes difficult to comprehend the utility of non-tangible items. With video games being physically identical to each other, it is no wonder consumers whine when one game is priced higher than another—we simply cannot physically distinguish the value between them, as ridiculous as it sounds. Knowing this, it’s no wonder why consumers accepted the steep price of Guitar Hero. It just came in a bigger box and we have been conditioned to accept that bigger must mean more expensive, without considering that actual value per hour of entertainment it may provide.
But when it comes to finances and video game pricing, there is no easy solution. Either publishers can gradually increase prices and accept the consumer complaints, as did Activision with Call of Duty, or attempt some minor deception tactics by altering the physical appearance of their games. One suggestion may be to only make available a “special edition” for the first 3 months of release, throw in a poster and some cheap swag, and charge $10 to $15 more. Seems like a win-win situation; publishers make more money to support bigger and better titles, and consumers fall into the fallacy that bigger is better.
Then again, maybe I’m wrong. But one thing is for certain: I pay about the same in 2010 as I did in 1995 for a blockbuster video game; the difference being that today, I play each game about 2.5x longer. It’s like getting a 1 liter bottle of Pepsi in 2010 for the price of a 400 ml Pepsi in 1995. Now something doesn’t seem right about that, now does it?