Games are actually not inflation adjusted?

Bear with me because my memory’s pretty bad. Nowadays, computer games are like $45-$50 correct?

I can’t picture Pirates! or Pool of Radiance (~1987) costing more than $35 back in the day. That little wheel with runes you had to line up to play.

US Department of Labor: Consumer Price Index for urban
http://research.stlouisfed.org/fred2/data/CPIAUCNS.txt

1987-12-01 115.400
2007-03-01 205.352

Twenty years, about double the cost. If I’m reading it correctly, something that cost $1.15 in 87 would cost about $2.05 now.

While we’re at it, now much did a Nintendo or a Sega Genesis cost?

So things like corn flakes exceeded the general inflation rate cause I think those at least tripled in price. Electronics of course dropped. In fact, now you have to pay to THROW the stuff away. We also had more dolphins and whales to save back then. And the Wonder Years. Col. Oliver North.

I got a Genesis when the system launched, and I’m pretty sure it was $300.

Does that make the PS3 inflation adjusted?

  1. Nintendo games were 50 bucks. Manufacturing costs took up a larger chunk with cartridges, with larger games costing upwards of $60.

  2. Much like all other entertainment, the demand for video games is incredibly elastic, which means it responds really well to price changes. Raise the price, and demand drops. People have to eat, but people don’t have to buy video games.

  3. This could be troubling, given that labor intensive industries often have Baumol’s cost disease. Given the astronomical rates that development budgets have risen, I think this may be the case.

What I would really like to know is how retailer margin has fluctuated over the years. I would assume, given the monopoly that software manufacturers have over their goods, that retailer margins would have shrunk over the years. From what I have gathered, selling pc and console video games in a store front does not provide the margins that sufficient for profitability. This drove retailers to find alternative, higher margin business, like magazine subs, and used video games.

Many of the big title PC games in the late 80s were $50-$60; stuff like Wing Commander, Might & Magic, and the Ultimas. I let myself buy one PC game at the end of each school year in college. Check out that archive of the first 100 issues of CGW and you’ll see the price in many of their ads.

This is why I couldn’t understand the d0med arguments when Doom 3 and Half-Life 2 were released at $55 or $60, rather than $50. If you adjust for inflation, PC games have decreased in price over the last 20 years.

I took a long console break between the Atari 2600 and the PS1 (bought a year after the release of the PS2), so I don’t know how console game prices have changed.

I recall Nintendo titles (SNES era) going for 800 and up in the local currency
(Crazy Moon Coins). For comparison, the cheapest Guitar Hero II for the 360
foes for 800 with a guitar controller. Nowadays, console prices are at 500 to 600
for new games on Wii, 360 and PS3, with some stores charging a bit much, topping
out at 700. 1 dollar = 6 bucks in our currency now. Typical adjustments to the
price of a product add 30-50% to the cost of anything.

If the inflation adjustment is about the same across the world, console games
are down to a third of the typical price 20 years ago.

No, I’m still not paying full price if a game is over 500 - the independent guys
at the open market downtown can get me better deals :)
(Originals, still sealed, 200 to 350 - that’s $30 and up)

But yeah, the PS3 seems to be the only inflation adjusted console. The 360 is
a steal at its current prices, if you also have consumer protection laws :P

Not only have game prices reduced relative to inflation, the effort that goes into creating a game has drastically increased, and games are about the cheapest form of entertainment per dollar you can get (once you account for the cost of time lost watching ads in “free” mediums like TV).

Gamers are skinflint cheapskates, except perhaps when it comes to MMOs.

I hate to point out the obvious, but the market is not the same in almost any respect. In addition to Jasper’s points on production costs, games also sell far more copies than they did 20 years ago.

What percentage of games to you think make money, rossm?

I dont know what he thinks, but I think not more than 10%. I’d hazard 2-5% for big budget non casual stuff.

As others have said, games are actually much cheaper now than they were 25 years ago – in real terms, not just in “adjusted for inflation” terms. All the SSI wargames I bought in 1980-1984 or so were about $75 each.

Cutting edge computers are also much cheaper. Even 15 years ago, it was difficult to build a gaming machine for under $3000 – now you can easily do so for under $1000.

I didn’t know the old SSI games cost that much, but I do have an Origin catalog from 1990 and as Sidd says, prices were extremely high. I think Wing Commander was something like $70 (1990 dollars) and the sound-pack-voice addon or whatever it was added another $20+.

I remember when I was a kid and we bought Atari 2600 Asteroids for either $40 or $50. I think $50.

Much like all other entertainment, the demand for video games is incredibly elastic

After the great crash I remember seeing big bins full of 2600 games in department stores, priced a few bucks each.

For some reason I remember playing games for a lot longer when I was a kid. I’m not sure if it was because I had to (due to not being able to afford new ones), or because they didn’t shovel out as much crap back then.

The most expensive game, even today, that i’ve ever bought was Phantasy Star III, as a kid, for $79.99 + tax out of some boutique outlet in the mall, in a town 20 miles away, because it was the only place that sold Genesis games.

Released in 1990.

SlyFrog- And you can’t make an educated guess? Which theory strikes you as more plausible?

I remember dropping $70 on quite a few later-era SNES games.

The note about computers is valid. You’d have to be a moron to spend $3k on a gaming rig today, to spend that much you’re getting a stupid custom case and like eighteen fans and shit. As recently as 2000 $1500 was just getting you a middle of the road box.

Is it just me, or is there a lot more competition now then in the days of $70 games. A lot more developers, a lot more games being released, and a lot more established franchises. I suspect the lower ceiling price on games has a lot to do with the competition. You break the ceiling, a lot of consumers will simply look at the next game on the shelf.

There are other factors, the number of consumers of video games has increased, and modern publishers are spread out over so many games and franchises there is little pressure for every game to be profitable, if a game its a major hit then its profitable, simple as that.

I don’t have any hard numbers but there were certainly enormous quantities of videogames being made back in the day, not only in the early '80s Atari days but also in the 8-bit C64/Atari 800/Apple II days. A lot of them were basically crap and in so many ways the expenses of even AAA titles could be so much less given the limited graphics/sound of the day.

Again, I mean, not sure how you compare the competition then versus now, taking into account AAA versus B games, Euro games versus American games, multiple platforms, ports, whatever. But one thing I remember from the C64 is there were boatloads of games. Going to http://www.lemon64.com and browsing around gives you a sense of just how many. 549 games listed under the letter “S” alone.

  1. Yes you are right. Manufacturing costs now are near zero now. Low print costs, digital distribution and the fact that putting your program on a CD or DVD cost about $1 vs much more for a cartridge years ago means that manufacturers of games are paying almost nothing for distribution vs. a while ago.

  2. If one is true 3 is false. Programmers are many times more productive now than in years past. Now a game company can buy an engine to lay their game over while in the past everyone had to start from scratch. Games have so many programmers now because they are so much more complex than they were. I seriously think some guy, with the right software package, could put together an Ultima VII style game at home in his garage in a month of weekends. Because distribution costs have fallen so much and the audience is so much wider the productivity of lead designers and producers script writers has risen too.

On PC, maybe… but not on consoles they aren’t (at least for third parties). There’s still considerable cost of goods there regardless of the lowered cost of the physical media.