Occasionally we’re asked how Steam games are so cheap, especially compared to console games which tend to release at about 60 USD, or even more around the world, and don’t tend to shift from that point for a very long time. Steam, in comparison, very rarely released games with a price tag as high as $60, and very often have sales that can cut off up to 75% of the game price, once it has been out for a little while. But how can they do this? Are console titles ripping us off?
Manufacturing and Logistics
One major difference is between Steam games and your standard console games is that console games are still sold as boxed copies in quite high numbers, whereas most game stores will have a very small selection of PC games, or sometimes none at all. This is because developers of PC games know that they don’t have to go through the costly expense of creating boxed copies to get sales, whereas bigger console titles know they need boxed copies to really succeed.
But what makes boxed copies so expensive? Most of us have burned CDs back in the day, all you need is a blank disk and any computer, seems simple. The issue is more the scale of manufacturing. Not only do they need to do this for millions of copies, but they also need to factor in excess production, where they need to make more copies than will actually sell to ensure there is enough to cover demand, this is something digital copies don’t need to worry about. Add to that the cost of shipping disks to game stores across the world and the increasing costs of disks and cartridges as storage capacity increases and you soon have a pretty hefty cost that needs covering in the end price.
Of course, this raises the question, why does that mean that digital copies of console games are still the same price as boxed copies. The answer is simply that they match the prices so one buyer does not feel cheated out of more money than the other, and because they know people will be willing to pay for it as they still end up with the same end product. This leads up to our next point.
Prices Are Partly Based On What People Are Willing To Pay
Whilst much of the cost of a game comes from the production, manufacturing, and logistics, the truth of the matter is that games are also priced on what people expect them to be and are willing to pay for them. PC gamers have gotten used to the cheaper costs of games and will not pay the same amount as many console games do. A great example of this is Steam’s sales, which come so regularly and save so much that people often wait for them before buying, compared to Nintendo’s first party console games which don’t often drop in price for many years after release as they know their audience will still buy them. This may seem unfair, and perhaps it is, but it can also work in the end-users favor.
As Matthew Viglione explains in his talk at the Game Developers Conference, developers are forced to match app store prices on the mobile, forcing games that could otherwise cost $29.99 on PC to sell at $9.99 on mobile, as anything else is considered incredibly expensive for a mobile game, even though the experience is essentially the same. This could be seen as a positive as you can get a game for cheaper, but it can also stop developers from bothering to develop for that platform at all, especially in the case of mobile games as they need to be specially adapted to the controls and performance of mobile devices.