I think this might have more to do with the beating that Epic took from Apple in court. The 2021 decision in favor of Apple, of their lawsuit for anti-competitive behavior was upheld this year. That was not cheap to litigate that and was a major loss for Epic.
I think the Bandcamp sell off is a good indicator of all of this. Epic obtained Bandcamp in March 2022, to explicitly have their IAP system integrated into it. Google shut them down and told them they would start collecting the 30% usual due. Epic filed suit and Google gave them an exception for the time being with the agreement that 10% would be held in escrow until the conclusion of the trail. With many of the arguments in the Apple case similar to Google's case, I'm pretty sure Epic sees the loss coming from a mile away.
All in all, what I think can be drawn from this. Epic made a big bet on "their store" and that's fading away with mobile devices locking people into a marketplace that is "distinctly not Epic". While putting such a bet wouldn't normally kill a company, Epic sextupled down on it and I think how hard they went for "their marketplace" is what's done them in.
That and the EGS seem to be where Epic funneled all their profits from the height of Fornite. That neither has worked out puts them on shakier ground. How many billions of dollars has been spent on EGS with it being way behind their revenue targets?
As things stand, Epic has very little in the way of a next big revenue source when Fortnite starts to fade as something new takes its place. That (probably) isn’t right around the corner but it will happen eventually. Their bet was on running major digital storefronts; that hasn’t worked out. UE will continue to make good money but not anywhere near enough to sustain the company as it is. UE is simply far smaller than something like FN.
This is likely them realizing this in conjunction with what you said. They need a new big revenue source in the pipeline, since digital storefronts won’t be it. Whatever that next thing is will need lots of money.
It’s true, game prices today are the same as they have been for the past 40 years for AAA titles.
I can’t think of an industry which hasn’t had a price raise in decades.
Gaming had managed to get by on this thanks to increasing market volume as gaming became more mainstream in addition to extra revenue streams like micro transactions. But it’s hitting saturation now and won’t keep counteracting inflation forever
Games have actually gotten cheaper over time adjusted for inflation even as production costs have risen, it's crazy. A NES game in today's money would be around $160.
Game industry is bigger than movies and music combined which was not the case back in the NES era. Game industry has become a juggernaut with a huge consumer target base, and lower barrier to entry that allows for even random people being able to publish games instead of a few larger companies. Rise in production costs has been one that has been self imposed the way some studios go for big special effects blockbusters because they are targeting billions. Meanwhile like with movies you get these indie 2D and last gen 3D looking games being hits right alongside these billion dollar company attempts.
I guess one area you can look at is how niche products get priced lower like mechanical keyboards, and then once productions starts ramping up and things go mainstream suddenly these niche expensive ventures with a few fans becomes more affordable as larger quantities are now being distributed.
You same thing with tech like SSDs and hard drives actually falling price over time while capacities offered grows. Lot of PC parts actually with the exception of GPUs.
The game industry did get that much larger, but that's on the backs of only a few (non-Capcom) games that sell to the type of person who only buys a couple of games per year at most. Hardly any company is selling as many copies as Call of Duty sells year after year.
That’s only true if you compare game sales to movie box office revenues, and music sales (which have shrunk considerably since they peaked in the 1990s). Once you account for home video sales, streaming, theme park revenues, and merchandise sales, the movie industry dwarfs the gaming industry. Once you account for artist tour and merchandise sales, the music industry dwarfs the gaming industry.
Yes, but the market has grown significantly and the cost of production and distribution is very low, lower than the age of cartridges. The development is the only cost.
Lots of industries have had relative price drops over that time. Mainly electronics. An mp3 player used to be $200 minimum.
I’d gladly agree to pay more in exchange for a legally binding agreement that higher prices mean video games free of predatory monetization and reasonable pay and job security for the people making the games. But we both know that they have no intention of doing the right thing, no matter how high the box price. They’re already raking in record profits while laying off huge chunks of their workforce and giving the c-suite ever-increasing annual bonuses.
They’ve perpetuated the lie that microtransactions were a necessity and the $60 price was unsustainable for such a long time that people actually believe it. Now they want to increase the box price while keeping the predatory monetization, having their cake and eating it too.
Prices definitely increased, over the last 20 years new AAA games price increased from 45-50 EUR to 70 EUR.
With inflation taken into account that would probably mean flat prices.
With the increase in the numbers of players, the spread of DLCs and micro transactions, I suspect revenue increased even with inflation taken into account.
Could it be the cost of creating game is rising faster than inflation? Or game studio just got more greedy?
What you said, but in video form youtu.be/VhWGQCzAtl8?si=Gj9AaniT3U46KlGF. And that came out 5 years ago. Even if we only kept up with inflation from when that video came out until now, videogames should cost $73
First of all, consider how many hours of use you usually get out of such a AAA title, and you will see that it's actually quite cheap entertainment. And second, there are good games (to waste countless hours on) that are way cheaper.
They can always charge 999999999999999999999999,- € for games. Keep the following rules in mind:
Demand always exceeds supply to an absurd degree.
Price elasticity doesn’t exist.
The average willingness to pay for games is way above the 8,40 €, approaching infinity, contrary to the European displacement study on page 170 paragraph 4.
100 % of game pirates will buy games if they can’t pirate games, therefore DRM good.
It’s funny really. They probably could continued growth had Tim Sweeney just swallowed his pride and accepted the 30% commission rate. Instead, the game has a nearly non-existent prominence on mobile because of it.
Like other commenters here, I’m hopeful. Epic owning Bandcamp was pretty scary. They never really answered questions about it and a lot of folks were worried it could have gone the Epic Store route. Epic might honestly have sucked up all the data and sold it off already, though. We don’t know what the future will hold; I feel like no Epic is at worst a neutral position. Songtradr is at least in the music business and isn’t headed by Tim Sweeney.
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