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Legal Price Fixing – Does It Hurt The Games?

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Is anybody confused as to why all major games on release are consistently priced at $60? Even among vicious competitors, most of them don’t really try to compete in terms of price. Is anybody else a little confused or concerned about that?

The big explanation I’ve seen is that there was some magical, hypothetical, marketing study a billion years ago that determined that $60 was the ideal price for a video game, and so every single company (by coincidence I guess) decided to sell every single game at $60. I guess Nintendo, Sony, Microsoft, and every other major gaming company conducted this exact same study or something, because they all arrived at the exact same conclusive price. Does anybody else find that a little suspicious?

There’s this little thing called, “Price Fixing,” where competitors agree not to compete with each other in terms of price:

I sell apples.

You sell apples.

I sell at $1.50.

You sell at $1.25.

I see that and reduce price to $1.00.

You see that and reduce price to $0.75.

I see that and reduce price to $0.50.

If we get together and agree to sell our apples at a fixed price, we don’t have to worry about competitive pricing strategies or price wars at all. We’ll both sell our apples for $2.00, and we’ll make even more money than if we were competing.

Price Fixing is illegal. Can’t do it. Big no-no.

But (like magic) every single game is $60, and hypothetically (theoretically (coincidentally)), companies are only charging $60, because that’s the maximum amount people were supposedly willing to pay a billion years ago according to that particularly mysterious and consequential study that everybody in the industry agreed to adhere to.

To me, it seems more likely that the price is set at $60, because companies stand to make more money by not offering competitive, variable prices. How many games are on the market? Like a gazillion. Yet the major releases are $60 without fail. According to economic theory, if the ‘supply’ is so high, the price should decrease. But like magic, the price is consistently $60 regardless of the game’s budget or brand or future prospects or quality or anything really.

Right now, there are plenty of board games that are more expensive than video games, and they’re often really, very popular and praised by fans:

($120) Twilight Imperium – 8.7 on BoardGameGeek

($110) Gloomhaven – 8.8 on BGG

($85) Mansions of Madness – 8.1 on BGG

($80) Star Wars: Armada – 7.9 on BGG

($70) War of the Ring – 8.5 on BGG

The Dark Souls board game is more expensive than the video game. How does that happen?

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Despite the expense, customers are still willing to pay those prices (even disregarding the magic study that says they shouldn’t pay more than $60 for a game in digitized form). If the board game industry used De Facto Price Fixing (like the video game industry), I don’t think those really good, expensive, quality, board games would exist. They couldn’t pay for the high-quality models or the really cool app that goes alongside it or the hundreds and hundreds of cards with impressive quality artwork or whatever. Wouldn’t they be shackled to a budget under $60 per printed copy?

When I think about Sony exclusives, it’s my understanding that Sony wants to push hardware, so when they publish a game, they have a very laissez faire, “Just make a really good game,” kind of attitude. They don’t necessarily want to make money on the game. They want to make money on the hardware the game is going to incentivize people to purchase (and then all the additional money they’ll make with the PlayStation Store and future PS purchases etc..).

Am I mistaken in suggesting that Sony exclusives have frequently been among the most highly praised games this generation while simultaneously only costing $60 without additional monetization? It seems most likely to me that it’s because those companies receive an influx of cash from Sony with the direction, “Make a really good game,” that they can create a really good game and still sell at $60 without additional microtransactions. Hence, if games were permitted to charge more than $60, the market would experience higher quality games which are not console-exclusive or riddled with microtransactions more frequently, and I would also think that a lot of games that come out today that are $60 would be priced well bellow $60 as a means to compete with rivals selling similar product.

People often pose the conversation that (due to inflation) companies should cooperatively, incrementally increase the price of each game to $70 in another act of Price Fixing.

That isn’t what I’m suggesting.

I’m suggesting that games should set their price dependent upon budget and quality. Bigger, better game with a big budget: big price (even double of what’s currently offered). Games with a relatively tighter budget: small price (even half of what’s currently offered).

Am I incorrect?

TL;DR – Price Fixing (competitors agreeing to charge the same price for competing products) is reducing the likelihood of production of higher quality games. Games should vary their pricing strategies by charging more or less than $60 dependent upon the game’s budget and quality, so games don’t have to recoup expensive production cost by going console-exclusive or implementing microtransactions.

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