Sony and Microsoft launched their respective consoles PS4 and the Xbox One 7 years ago. Over the years, the quality of the games, the storylines, and the graphics have changed drastically. The one thing that remained constant was the price. All the PS4 and Xbox games were priced at a standard $59.99. (Not counting in-game purchases and DLCs). But things might just change as we gear up with the launch of the PlayStation 5 and the Xbox Series X.

What caused PlayStation 5 And Xbox Series X game manufacturers to rethink pricing?

These next-gen consoles will most likely be priced higher than their predecessors. But, reports now suggest that the game developers are considering raking up the prices of games, too. This will most likely happen because of the announcement that the upcoming NBA2K21 game will be priced at $69.99 for the PlayStation 5 and Xbox Series X.

The game will be available for the standard $59.99 for PS4 and Xbox One when it launched on September 4. But the price goes up 10$ for the next-gen consoles. Former PlayStation Exec Shawn Layden spoke at an event last month where he said,

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“It’s been $59.99 since I started in this business, but the cost of games have gone up ten times. If you don’t have elasticity on the price-point, but you have huge volatility on the cost line, the model becomes more difficult. I think this generation is going to see those two imperatives collide.”

Layden has a very valid point here. The cost of development goes up especially with the games getting longer and being based in an open world. For eg. GTA 5 cost a staggering $265 million to make. That is a budget bigger than most of the movies!

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Why are the prices being raked up?

The answer to this question is given to us by IDG President Yoshio Osaki. Speaking with Gamesindustry.biz, Osaki says

“The last time that next-gen launch software pricing went up was in 2005 and 2006, when it went from $49.99 to $59.99 at the start of the Xbox 360 and PS3 generation,” “During that time, the costs and prices in other affiliated verticals have gone up.”

He also mentioned how the prices Netflix subscription and Cable TV have gone up by 100% and 105% respectively. While the game prices remained unchanged, the production costs of these next-gen consoles like PS% and Xbox Series x have gone up by 200-300%.

He also commented saying,

“Even with the increase to $69.99 for next-gen, that price increase from 2005 to 2020 next-gen is only up 17%, far lower than the other comparisons. While the cost of development and publishing have gone up, and pricing in other entertainment verticals has also gone up substantially, next-gen software pricing has not reflected these increases. $59.99 to $69.99 does not even cover these other cost increases completely, but does move it more in the proper direction.”

Osaki and Layden both have convincing arguments as to why the decision to change the prices of the games. Inflation is bound to hit every industry and to adapt, the prices need to if you want to survive in the industry.

Osaki also mentions how his company works with every major game publisher and that they are “exploring moving their next-gen pricing up on certain franchises.”

The $69.99 pricing of the AAA-rated NBA2K21 has set things in motion and it is only a matter of time before the announcement is made by other game developers.