Why New Video Games Still Cost $60

Call of Duty vs. Battlefield. Disney Infinity vs. Skylanders. Every year, intense marketing battles happen over which games will dominate certain categories. Why don’t publishers like EA or Activision do what marketplace competitors do in other areas do and simply undercut the price?

The long answer is complicated and a little bit shady. The short answer? Everybody needs a cut of the profits. In a post over at The Consumerist, Kate Cox outlines some of the practices that have become standard over the last few years of selling video games:

There’s a reason that pretty much every retailer in the US charges $59.99 for a new video game on the week of its release. It’s a price point that comes from the publisher, and all the retailers that sell the new product to consumers agree to abide by it.

Stores that choose not to abide by the price agreement quickly find themselves out of favor with the publisher for future shipments. So if Big Game Store wants to get players in the door for next year’s Call of Duty iteration, they won’t drop below the publisher’s guidance for this year’s.

That kind of agreement is called minimum resale price maintenance. From a retailer and publisher perspective, that flattening out of competition has a bunch of positives.

Publishers know what their cut of the game will be. Stores know that they don’t have to cut into the bone on their own profits to try to get shoppers in the door. Retailers compete on convenience, other available goods, and other factors that aren’t price. From a consumer perspective, well, consumers are utterly unable to make decisions based on price, and sometimes that really stinks.

Of course, brick-and-mortar stores aren’t the only place to buy new video games and the increasing popularity of Steam and similar digital distribution hubs lets video game consumers creates a space where the dollar goes a bit further:

Blockbuster games usually launch on Steam at the same price as their console counterparts, or sometimes $10 lower. But the launch price, on Steam, is never the price for long. The major sales are now so regular and so massive that they have taken on an iconic status of their own. Gamers can all but mark the seasons by them.

And so, too, can competing online game sellers. Smaller gaming-focused sites like GamersGate, GOG, GameFly, Desura, and plenty of others also now tout regular deep discounts to subscribers — but it’s not just the specialty shops. Amazon, too, has developed a habit of pushing major game discounts with remarkably coincidental timing to Steam’s big sales.

So might this kind of price-cutting come to Xbox Live and PSN? Probably not:

Nearly a decade later, in 2014, Xbox Live and PlayStation Network do have robust digital offerings, and both offer monthly sales and occasional promotional discounts. Same-day digital release is a reality for more and more games every month. The tech is ready… but the element of competition is still missing.

The digital storefronts for both major consoles are walled gardens: Sony and Microsoft have the final say, and you’re not going to see a Steam app hawking relatively new games for $5 on the Xbox One anytime soon.

Imagine that, though: an official outpost of Steam or GOG—which would even be more attractive, given its specialization in out-of-print titles—on a console. Won’t happen in the near future but we can dream.

[The Consumerist]