With game prices rising amidst expensive development cycles and massive layoffs across the industry, Fraser Simpson looks at why video games are becoming more of an expensive hobby.
The gaming industry is constantly changing. New games are released every week of varying qualities, every decade will bring about a new console from the main console manufacturers, and the gaming market continues to grow year after year. The hobby has never been more mainstream, yet problems are beginning to amplify. Game prices are rising, development cycles are becoming more expensive, and the gaming industry is seeing major layoffs in recent years. Why have prices gone up? How will this affect those looking to work in the gaming industry in the future? And will this lead to a potential repeat of the infamous video game crash of 1983?
Firstly, new game releases have seen their average price recently rise to £70, an increase from the £60 standard for new releases from past console generations. Many reasons can be attributed to these price rises, one being that development budgets have undoubtedly risen. For example, Call of Duty: Black Ops Cold War from 2020 reportedly cost over $700 million to produce, an increase of $250 million from the previous Black Ops game, Black Ops III, which cost $450 million to produce in 2015. If we look further back, the original Black Ops game from 2010 reportedly cost $18-28 million to produce. Whilst this is a single example, and Call of Duty is undoubtedly a massive franchise, the substantial increase in the development budget for these games is astounding and potentially economically unsustainable and can be seen as a reason companies are increasing game prices.
Photo of 5 generations of PlayStation games, where the average price of a newly released game has gone from £50 to £70 in 30 years (Photo Credit: Fraser Simpson)
Bonnie Sawtell, a third-year Games Art and Design student, believes the increased time spent on developing new releases can be attributed to the increased prices of games. She said: “It’s definitely going to be increasing the budget because of just how much time it takes, and how games are getting physically bigger (in storage size). I do truly believe that, to some extent, they are raising the prices just because they can. But I do think that production costs lean into this fact, especially with titles like Call of Duty that are so large that they do take more space to kind of create. It just depends on company to company and title to title.”
Alternatively, it could be seen that new release prices for games haven’t gone up as much as they could have done. When we look back at the 1990s, game releases were also in the £50-60 range. It isn’t difficult to find old photos or screenshots of a gaming magazine from that decade and find game prices, at least in the North American market, being upwards of $70. Technically speaking, video game prices have gone down if you adjust those old prices for inflation, but for those wishing to buy games now, they’ll find it difficult to justify spending £70 on a new game, when their wages have not kept up with the inflation of almost everything in today’s economy.
For the next generation of people wishing to work in the industry, the outlook seems bleak, especially if studios would rather hire someone with experience rather than take a chance on newcomers. Kimi Eggleton, another third-year Games Art and Design student, believes that “if you come from a background where there’s nothing, you’ve got to spend that extra money to even try and get in there. You’re asking for a studio to make an investment in you. If they don’t know who you are, and they’re not going to take that risk because of financial decisions, why would they choose you?”
Kimi Eggleton on their Games Art and Design Course (Photo Credit: Kimi Eggleton)
Kimi herself is from a working-class background, having grown up in Coventry, and feels strongly about video game prices, as she remembers a single game being a treat for her younger self. She said: “I know for a fact if I were to say to my mum nowadays, this new game’s coming out and it was £70 or £80, she’d say sorry, can’t afford that. I feel it should be an important hobby they (children) get into, because it inspires a lot of creativity. But I just feel they will get priced out of it.”
Layoffs are unfortunately present in many industries, yet the past few years have seen major companies such as Electronic Arts, Microsoft Gaming, and Sony Interactive Entertainment announce layoffs to their workforce. All these companies saw increases in profits during these periods where the layoffs occurred, whilst the global gaming industry is expected to reach a value of $321 billion by 2026, according to a 2024 PwC report. Kimi believes these layoffs can be attributed to why games are becoming more expensive, saying: “The studio’s overall cost has just shot through the roof, so they’re trying to make up for that. Instead of cutting the CEO’s wage, they’re cutting out the staff and they’re making up with it by charging people an extra £20 on their game.”
The video game crash of 1983 was a large recession in the North American video games industry between 1983 and 1985, which saw video game revenue fall from $3.2 billion in 1983 to around $100 million in 1985, a drop of almost 97%. It serves as a reminder of how to avoid crashing the market, and while there is always a chance that the industry could at some point fall into a similar recession, Bonnie believes it’ll likely never happen again, at least not to the same extent, believing that “gaming is too mainstream to fail”.
Photo of different video games consoles, such as a PlayStation 3, PlayStation 4 and PlayStation 5 (Photo Credit: Fraser Simpson)
So, where does this leave gaming for the foreseeable future? If there’s any indication, the market will likely continue to grow, layoffs will unfortunately continue to happen, and game prices will slowly but surely increase. Undoubtedly, while the future of gaming is not entirely hopeful for those wishing to work in it, it can almost be certain that the threat of a market crash like in 1983 will not happen again, and as one of the most mainstream hobbies out there, gaming will continue to thrive in some capacity or another.