Its going to get worse
The death of physical media
- Thread starter eastmen
- Start date
I haven't bought many download games yet. But I haven't bought a lot of games of any kind in the last few years. More like mobile gaming and I've bought a couple there.
For video and audio, I haven't bought CDs or video discs of any kind in a long time. Streaming and rips, way more convenient.
However, be careful what you wish for.
I wouldn't be surprised if these downloads will only work as long as you are subscribed to something.
So you can spend hundreds or over a thousand a year for music and video streaming and spend thousands over several years. But the minute you unsubscribe, all that goes poof. You've just been renting content, not owning it. Yes I know legally they call it license for media, not ownership. But people used to be able to trade records, tapes and discs now, get some money back and offer a more affordable source of content for college students and the like.
Software subscriptions are equally insidious. I have to subscribe to use Quicken and Adobe CC.
I have to pay $120 or whatever the inevitable hiked price will be to access my photo library, which I spent thousands of hours shooting and editing. If I want to switch, I'll lose a lot of work I've put into it. But also, other programs are moving towards subscriptions as well.
For video and audio, I haven't bought CDs or video discs of any kind in a long time. Streaming and rips, way more convenient.
However, be careful what you wish for.
I wouldn't be surprised if these downloads will only work as long as you are subscribed to something.
So you can spend hundreds or over a thousand a year for music and video streaming and spend thousands over several years. But the minute you unsubscribe, all that goes poof. You've just been renting content, not owning it. Yes I know legally they call it license for media, not ownership. But people used to be able to trade records, tapes and discs now, get some money back and offer a more affordable source of content for college students and the like.
Software subscriptions are equally insidious. I have to subscribe to use Quicken and Adobe CC.
I have to pay $120 or whatever the inevitable hiked price will be to access my photo library, which I spent thousands of hours shooting and editing. If I want to switch, I'll lose a lot of work I've put into it. But also, other programs are moving towards subscriptions as well.
All of the subscription services are very explicitly a rental service. I think part of the problem people have with digital media is that there is a perception that if you purchase a license, that license can be revoked or controlled in a way that would effectively make those purchased licenses a rental.
Thinking about this myself, one of the main problems I have with digital video games is that they are tied to a platform. If you buy a song on itunes, or amazon, or google play, you can download that song and put it on an MP3 player you bought last week, or 5 years ago, and it will play, assuming it supports the formats available from that storefront. It will also play on a variety of PCs, phones, and tablets. This is mostly true with movies as well, though there is some limitations (like no Microsoft movies app on mobile, though you can stream purchases via a web browser).
In contrast, if you buy a game on PSN, it only works on a Playstation. It's mostly the same on Xbox, though there are a handful of games that will also work on PC and console with one purchase. Things are getting better because backwards compatibility making some games playable across 2 generations, but buying a license for a game is significantly more limiting than buying a license for a movie or music. And sure, games have always been this way. But when other media moved from physical to digital, they went from being locked to a platform (cassettes only work on a cassette player) to working on multiple types of devices with a single license.
Johnny Awesome
Veteran
There's a side of this that I think people sometimes forget and that the death of physical media has slowed the increase in price of games over the last decade. IMO we'd already be at $90/game if it weren't for digital delivery.
Its also removed second hand options to buy games cheaper and give people a chance to exchange games to buy new ones
It is actually kind of the opposite. The digital games are actually priced higher to have zero disparity with the retail prices which include logistics, materials and retail margin. Basically the sellers are taking advantage of the existence of physical media to overcharge you.
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I think that's hopelessly naive, that businesses won't maximize profits because they reduced costs.
The marginal manufacturing costs of discs are paltry.
This is not the 16-bit console era when Nintendo stuck with cartridges because they could make more manufacturing as well as distributing cartridge games.
Even if there was a big cost advantage of digital over discs, companies will simply pocket additional profit margins. They didn't raise prices because of cost savings but because they didn't think the market would bear it.
The thing that saved price-rises was ongoing monetisation - DLC and battle passes and whatnot. Second hand buyers of disc could also end up spending on extra content.
Johnny Awesome
Veteran
I think people are missing the point. Cutting out the middle man (stores etc...) and the existence of DLC has increased revenue for publishers so that they didn't have to raise base game prices as quickly.
Consumer prices have essentially doubled since the launch of the PS and development costs for AAA games have probably risen 2000%, yet the new God of War is $70 only 40% higher than a AAA game in 1995.
That relatively lower pricing is partially due to digital delivery and added digital content. Otherwise it's easy to see how AAA games would be $100 or more by now.
Consumer prices have essentially doubled since the launch of the PS and development costs for AAA games have probably risen 2000%, yet the new God of War is $70 only 40% higher than a AAA game in 1995.
That relatively lower pricing is partially due to digital delivery and added digital content. Otherwise it's easy to see how AAA games would be $100 or more by now.
They didn't have to raise prices anyway, because games aren't like 99,99% of other products. The main costs of those other products are variable - if you produce 10x as much your costs will be 10x as high (scaling effects aside). A (digital) game has like 100% fixed costs - your cost isn't rising, no matter if you sell 10 or 10 million. Thus the price of those other products absolutely has to rise with inflation, otherwise the profit of the can of beans you sell will get turned into a loss due to materials, wages, machines, transport, etc getting higher every year.
This isn't what happens in games, instead the big guys at the top raise the budget for the next game, because the profits of their past ones allows them to do that and higher budget = higher projected sales = higher profit. They then point to those budgets to justify higher game prices and other money extraction methods like subs, micro transactions, dlc, etc. This leaves less money for the rest leading to more market concentration. Then they repeat.
It's no coincidence that the first one to raise the price to $70 was the company with the most profitable game of all time. No flopped game is ever saved by $70, the problem wasn't/isn't the money in the market it's how this money is split.
This isn't what happens in games, instead the big guys at the top raise the budget for the next game, because the profits of their past ones allows them to do that and higher budget = higher projected sales = higher profit. They then point to those budgets to justify higher game prices and other money extraction methods like subs, micro transactions, dlc, etc. This leaves less money for the rest leading to more market concentration. Then they repeat.
It's no coincidence that the first one to raise the price to $70 was the company with the most profitable game of all time. No flopped game is ever saved by $70, the problem wasn't/isn't the money in the market it's how this money is split.
A game made in 2020 will cost more than the same game in 2000 because the operating costs have increased due to inflation.
...applies to physical games. Particularly wages so employee's relative income remains in line with inflation. Hardware costs increase. Energy. Property rents.
Early Saturn and Playstation games were $60 so prices have stayed relatively the same. They did this by cutting out a lot of physical distribution and middle men as well as finding new ways to monitize content.
Ofc this applies, but it doesn't result in a constraint to raise prices because you are dead otherwise. There is 0 way for the bean producer to still make a profit with the price from 20 years ago, because his cost per unit is now bigger than his revenue per unit 20 years ago, he can't sell him self into profit no matter how many he sells thus he is forced to raise the price. The dev on the other hand is into profit the moment he sells what he needed to sell 20 years ago + the risen costs.
Johnny Awesome
Veteran
The risen costs are HUGE. I remember that it was a big deal that Shenmue's budget was $30 million in 1999. They're making games with $500 million budgets right now. It's night and day. It's amazing that we can even buy a new God of War or Starfield game for only $70. No way that's happening if Sony/MS have to sell everything in stores.
But the size of the market also increased along with post buy purchases. What I dont understand though are the costs of servers running for years for MP games that already cost hundreds of millions.
Johnny Awesome
Veteran
Sure, but the console market isn't 20x larger.
PS2 + DC + GCN + Xbox = 215 million units
PS4 + Switch + Xbox One = 305 million units (and I'm being pretty generous to include the Switch here since it's mainly a portable system).
So the console market has grown 40% and AAA game budgets have grown 2000%. AAA games could easily be $200 by now. After all, it costs me 3x what it did 20 years ago to eat at McDonald's now.
PS2 + DC + GCN + Xbox = 215 million units
PS4 + Switch + Xbox One = 305 million units (and I'm being pretty generous to include the Switch here since it's mainly a portable system).
So the console market has grown 40% and AAA game budgets have grown 2000%. AAA games could easily be $200 by now. After all, it costs me 3x what it did 20 years ago to eat at McDonald's now.
Most games with $500 million budgets aren’t typically limited to a $60 sale for revenue generation. For those type of games, DLC and micro transactions tend to be the major revenue drivers.
I've been collecting vinyl LPs for the last thirty years. LPs are great because they're fun to play, have large artwork and the audio system is actually simple (basic stereo amplifier, two speakers, record player). It's very reliable if you take care of your stuff. My record player is from the 90s and all I've ever needed to replace was a rubber belt and the stylus. The idea that LPs actually sound better is not really correct. They sound particular way that people like that's "warm." Objectively they have a higher noise floor and more noise. CDs sometimes sounded worse even up until the 2000s because of the way the albums were mastered for digital. They'd transfer analog sources to hyper accurate digital formats and you'd hear all of the noise that was baked into the analog source. They did a lot of other poor mastering jobs that introduced other problems. But once music really started to be recording digitally and mastered only for digital the LP format just hasn't been able to keep up in terms of audio clarity. Digital audio is basically a perfect source now, the only issues are when they compress the dynamic range down to be played in cars and stuff like that.
Johnny Awesome
Veteran
Thank you for proving my point
