Why video games always cost $60

• Console video games have stayed about the same price of $60 for over ten years.
• The price establishes a consumer expectation that the latest blockbuster game is going to cost you as much as you paid last year and the year before that. 
• But video games have only gotten more complicated to make over time. 
• In the video above, Business Insider’s Ben Gilbert explains why console video game prices haven’t changed much in the last decade.

Following is a transcript of the video.

Ben Gilbert: The craziest thing about video games being $60 is that they’ve gotten much, much more complicated to make over time, but the price has stayed exactly at $60. If you’re buying a new “Super Mario” game on Nintendo Switch, it’s probably gonna cost 60 bucks. If you’re buying the new “Call of Duty” on the PlayStation 4 or Xbox One, it’s probably gonna cost $60. That’s the base level price. There are special editions, there are limited editions. There are lots of other ways that video game companies have come up with for you to spend more than $60 on video games, but the base level, entry level price for a blockbuster video game on a console is now $60.

There was certainly a time period where games cost anywhere from $40 to $80 in the Nintendo, early Nintendo Entertainment System era. Video games in general for consoles began to be priced around $50. That was around the PlayStation 1, Nintendo 64 era. Eventually, not so long after that, about 10 years later, the price increased with the PlayStation 3 and the Xbox 360 and the Nintendo Wii generation to $60 and things have stayed about there since in terms of console gaming.

The $60 price is mostly due to consumer expectation, so if you’re Nintendo or you’re Sony or Microsoft or any of the other game publishers out there, if you released your game the base level price being $70, $80, more than that, it’s a strong possibility people just won’t buy it. I think both consumers and game publishers to an extent benefit from the $60 price tag, not necessarily because it’s $60, but because there’s a standard. There’s an expectation. You can go in knowing that the next “Call of Duty,” the next “Madden,” whatever, is gonna cost the same as you paid the last year or the year before that.

So it’s not like it benefits me that it’s $60. It benefits me knowing that I’m not gonna spend more than a certain amount of money. And the same thing goes for if you’re a game developer or publisher. You wanna know how much you can expect to get in returns. You can set that $60 as your base level. This is how much people are gonna pay for my game.

That said, when game companies offer season passes, downloadable content, maybe a figurine or something like that, they can charge more. But it’s largely due to consumer expectation, and not necessarily just due to the cost of developing games, because games cost tens of millions of dollars to develop, and the $60 for each one, you have to sell tens of millions of copies to make up for the amount of money you’ve invested, which is why there are so many other ways that game companies have tried to figure out how to subsidize how expensive those game projects are.

$60 is essentially too little to pay for the amount of money that goes into the vast majority of blockbuster console games. That’s why there’s stuff like season passes or downloadable content or loot boxes or any of the other ways that game companies have figured out how to try to make more from what they have.

A loot box might come with a general description of what’s in it. Maybe it comes with a handful of rare items versus what are known as like common items. You don’t actually know that you’re paying for something directly, right? You’re not paying for a skin for the character that you play in a game, you’re paying for skins for any character in the game that might be rare versus common. There’s an element of gambling to it, essentially, right? And that’s problematic both for government regulators and for parents and for just people who buy games.

I think there will continue to be a market for $60 games, but I think that it’s being eaten into more than ever by other forms of video games, whether they’re free or just less expensive.