Impulse: A Look Into the Pricing of Video Games

Video games, as a business medium, have very much been growing and maturing since the day they were conceived. However, this growth and development, previously marked by steps like the birth of the arcade scene, the humble beginnings of the home market, and the generalization of home consoles with the Fairchild Channel F, very much came to a stop in the last decade or so, as the $60 box became very much the only way to consume most titles. That as it may be, recent years have hinted at the downfall of this once time tested tradition, as titles and franchises that would otherwise survive (such as Red Faction) cower in the floundering model's great wake. It seems these days that only the AAA mainstream titles and the super cheap indie games can survive, a far cry from the generations past. With these problems and more facing the video game market, it's no wonder that the Free-to-Play model rises from the ashes and, if all goes right, may end up the business model of the future.

The first nail in the $60 box's coffin is its utterly absurd price. Compared to other entertainment mediums such as print, music, and film, charging $60 is completely farcical. According to my cunning Amazon research, one can expect to pay around $10 for a paperback book, $15 for a DVD and $10 for a CD, a far cry from the price of a new video game. Why is this? The reason, I postulate, is simply because game developers have but one avenue of revenue, the game itself. A musician, for example, is able to sell his work at $10 because regardless of what all albums he sells, he can still make money preforming live. A game developer, on the other hand, can not do this, because if everyone were to pirate or just not buy his game, he would generate a total of zero dollars. With this comparison, it becomes clear that games need to find an alternate means of funds if they want to thrive in the way that films and music do.

Free-to-Play offers such a model. When the barrier of entry for your product is nonexistent, you can cater to a more impulsive audience, rather than make your product a calculated purchase. As any music collector will tell you, because of the low price of an album, even the most unknown of artists can still get their works heard because for $10, why not? If games could operate under this "Why not?" mentality, publishers would feel less pressured to make guaranteed sales, stifling creativity. Such a market would be better for the consumer, who could enjoy a wide range of unique titles, the publishers, who could freely ship whatever they wanted, and the developer, who's vision would always remain intact.

Another such method of generating income could come by in game by way of in-game advertising, provided that it is handled tastefully. If used to flesh out the world rather than to annoy the player, in-game advertising could again provide another means for developers and publishers to meet that golden $15 price point. However, companies that go this route walk a thin line and must be careful not to go to far with their adverts. Such flagrant actions can detract from the quality of the product as a whole and damage a company's integrity.

With all things considered, I believe it to be self-evident that the Free-to-Play game micro-transactions and in-game advertising will continue to be popular, at least for the foreseeable future, given how apt it is in the current game climate. Hopefully, developers will continue to create many wonder full titles that utilize this system going forward. Truly, this is the age of Free-to-Play games with micro-transactions and in game advertising.