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Commentary > Game Over
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An expensive Christmas
Will gaming Grinches empty your wallet?
July 10, 2002: 2:10 PM EDT

NEW YORK (CNN/Money) - If you're the parent of a gamer, you could be facing an expensive holiday season.

Sure, the price of the PlayStation 2, Xbox and Gamecube has come tumbling down in the last couple of months, but software prices for console games haven't budged. And PC game prices are on the rise - dramatically.

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Right now, the increases are contained to the sword and sorcery corner of the gaming world. Infogrames (IFGM: Research, Estimates) kicked the trend off, putting a retail price of $55 (roughly $5 more than the typical PC game) on the game "Neverwinter Nights." Blizzard Entertainment recently upped the ante, asking $60 for its wildly anticipated "Warcraft III."

Two individual increases might not normally raise any eyebrows – even if they are 10 and 20 percent jumps. Over the past year, though, the average retail price for a PC game has jumped 10 percent, according to John Taylor, managing director and analyst for Arcadia Investment Corp.

The collector's edition of  
The collector's edition of "Warcraft 3," which includes bonuses such as a DVD and coffee table book, sells for $75.

"(There has been) a firming trend over the past several months and it's has been largely due to premium pricing on the core PC market," said Taylor.

Developers and publishers say the higher prices are just a reflection of the increased sophistication of PC games. Many games now ship with editors, allowing players to create their own levels. And today's high-profile titles take a lot longer to create than those of a few years ago.

"To defray the costs of our online gaming infrastructure, a three year investment in game development, and the overall higher production values that went into making Warcraft III, the game did end up costing a little more for consumers," said Paul Sams, senior vice president of business development for Blizzard Entertainment. "However, when you consider that a movie costs $9 - without popcorn - for two hours and people will get, potentially, hundreds of hours of enjoyment from 'WarCraft III,' we think it's definitely one of the best entertainment values out there right now."

Here's the good news: If you're a casual gamer – someone who enjoys, say, a quick game of "Roller Coaster Tycoon" – you're probably not going to feel much of a pinch. If you're a little more serious about your gaming, it could cost you.

 
"Neverwinter Nights" broke the mold with its $55 retail price.

What you're likely to see in the coming months is a bifurcated pricing system. AAA titles, the ones that cost $5 to $10 million dollars to develop, are going to start costing more. Smaller titles should be able to remain under – sometimes well under – the $50 level.

There are a lot of AAA titles on the horizon, though, including LucasArts' "Star Wars Galaxies: An Empire Divided" (an online game which will carry a monthly pay-to-play fee as well) and id Software's "Doom III" (which will be published by Activision (ATVI: Research, Estimates)). Right now, the publishers say they have not determined what the retail price for those games will be.

Console games look, for the time being, to be immune to the escalating prices. The $50 price ceiling hasn't been challenged to date and there are no companies planning to do so at present. The only exception will be "SOCOM: U.S. Navy SEALs," a launch title for the PlayStation 2's online component. That title will retail for $60, but will come with a headset included.

"I think you've probably seen the pricing stabilize at $50 for AAA (console) releases," said Taylor. "In fact, you're more likely to see average selling price eroding this year, rather than the opposite."

 
Click Lara for previous columns

The reason for that is pretty simple. With the hardware costs coming down, the average age of console gamers is beginning to fall. That means mom or dad is more often involved when it comes to software purchases - and they're a lot more sensitive to a game's price.

They're not immune to holiday wishlists, though. And games are expected to be one of the hottest items this year. So here's a word to the wise: Manage expectations – and start keeping an eye out for sales now.  Top of page


Morris is Director of Content Development for CNN/Money. Click here to send him an email.






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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.