Making The Case For $20 Console Video Games

Over the last week, I've been thinking about the console market and how games are priced nowadays. Currently, new games on the Xbox 360 and PlayStation 3 cost $60. Those who want the latest and greatest titles on the Nintendo Wii will be set back $50.[Image credit: redjar]

Over the years, that has been the going rate for console games, and judging by the growth of the industry, it's a price that people around the globe are more than willing to pay. But I'm starting to wonder if it's too much now. More importantly, I'm starting to wonder if $20 might be the new sweet spot for console game pricing.

Now, I'm sure that if the industry decided to change game pricing to $20 per new title, it would take an initial hit. After all, pricing games for one-third their original price isn't always a good idea for companies that have a responsibility to investors to grow revenue. But when one considers where the market is headed — namely, towards a reliance upon digital downloads — it might not be so outlandish to price games so cheaply.

Rather than spending years working on a game and investing millions before a title is released, why can't a game company offer up a portion of a game for $20, and then allow for players to either buy expansion packs as they become available, or offer a monthly service where gamers would pay a set fee to get more content over time? Such a move could help developers make more in the long-run — a key component in making this plan happen — and as long as the value is right, help gamers get more out of titles.

I'll freely admit that my $20-per-game fee is an arbitrary figure, and we would need to rely upon developers to find the right price point for what they're offering, but I think that price point adequately illustrates what I'm trying to say: as digital content becomes more popular and gamers warm to the idea of paying cash over time to get more game maps, storylines, and characters, developers can afford to make less now, and generate more revenue over the long-term.

Pricing games at a substantially reduced rate and offering more content in the future also helps developers limit the impact of the used-game market.

When companies like GameStop sell used games, the developers don't get a cut of the revenue. And unfortunately for developers, the used-game space is a huge (and growing) market. It's why EA only allows those who buy its sports games new to access its online features, and charges used-game buyers for access.

At $20 for a new game, developers could go a long way in limiting the amount of revenue they lose to used game sales.

Call me crazy, but I think the game industry is ready for a new way of pricing console video games. With more and more people accessing online services and warming to the idea of digital downloads after games are released, it seems like the perfect time to ditch old ideas and drastically reduce game prices.

In the long run, such a move could benefit both consumers and game developers.