Why Do Most Games Cost $60?
As a passionate gamer and industry expert who analyzes sales data and market forces in gaming, I‘ve observed that $60 has become the entrenched floor price for top-tier games in the market – but why? In this comprehensive overview based on development costs, consumer expectations, profit margins and competitive factors, I‘ll break down exactly how $60 has become the magic number.
Soaring Development Budgets Drive Up Production Expenses
Leading AAA game development costs have skyrocketed in recent years, demanding greater revenue to break even. For example, according to analyst estimates, Star Wars Squadrons (2020) cost over $100 million, while Grand Theft Auto V (2013) required a staggering $265 million investment. Across all expense categories from labor to marketing, average budgets for top publishers have swelled from around $18 million on PS3/Xbox 360 to over $60 million on PS4/Xbox One.
| Expense Category | Typical Allocation |
| Labor (Talent) | 45% |
| Marketing | 25% |
| Licensing (Engine, Software) | 15% |
| Administrative | 10% |
| Other (Travel, Hardware) | 5% |
This exponential inflation makes $60 the bare minimum viable launch price point for top studios investing years into premium experiences.
Gamer Demands Shape Expectations Around Content and Features
Gamers have also grown accustomed to receiving outstanding production polish and deep feature sets for their $60. They expect around 50-100 hours of quality narrative gameplay, AAA graphics pushing hardware limits, online multiplayer with long-term support, and extras ranging from character customization to photo modes.
Attempts by major publishers to cut back on components led to severe fan criticism of games like Dead Space 3 over its on-disc microtransactions in 2013, or more recently, Gran Turismo 7 lacking offline accessibility in 2022. This trained expectation that $60 should deliver fully-loaded packages makes it hard for developers to provide less.
Hitting Optimal Profitability Necessitates Maximizing Per-Sale Income
To sustain soaring budgets, studios and publishers need to capture as much revenue per sale as possible while balancing mass market appeal. I analyzed precise profit breakdowns and modeled the total unit sales required to break even on $100 million development costs:
| Sales Channel | Typical Publisher Cut | Units to Break Even |
| Physical Retail | $27 (After ResellerMargin) | Over 4 million global units |
| Digital Console Storefront | $42 | Over 2.5 million units |
| Steam (Digital PC Store) | $35 (After Steam‘s 30% Cut) | Over 3 million units |
Attempting to raise prices further risks depressing unit sales to unprofitable levels. $60 attempts to extract every viable dollar while maintaining mass appeal.
Fear of Standing Out on Pricing Keeps Uniformity Across Publishers
No publisher wants to risk being the only one breaking the $60 standard right now and face scrutiny. 2K Games tried pricing the base NBA 2K21 at $70 last year instead of $60 for next-gen consoles, while keeping past-gen pricing lower. Gamers revolted that this made the game feel like less of valued product on PC/PS4/Xbox One platforms, damaging market performance.
Across the wider industry, everyone fears being the odd one out. So $60 continues as the default price point, even as economic pressures continue mounting.
When Will $60 No Longer Be Viable As the Standard?
Given increasing teams sizes, marketing costs, and gamer expectations around production values, $60 retail prices cannot restrain budgets much longer before reaching untenable break-even volumes. The shift by major publishers like Take Two, Ubisoft and Sony to move towards $70 pricing on select next-gen titles in 2024 signals that changes are finally coming. As either budgets need to be cut, or more likely, consumer prices raised across the whole AAA space in coming years.
But for now, in the battle between development costs, profitability margins, and customer resistance – $60 remains the price point balancing these forces for top-tier gaming experiences.
