NBA 2K21 next-gen price hike leads industry to question universal pricing structure

A new announcement from 2K games on Thursday that NBA 2K21 will cost $69.99 on next-gen hardware has sent the industry into a swirling frenzy of curiosity and conjecture that this price may become standard for next-gen hardware going forward.

The announcement from 2K came as part of a series of announcements that also included NBA 2K21’s price on current-gen hardware (the traditional $59.99) and the price the publisher will charge for both versions of the game in its “Mamba Forever” edition ($99.99). When questioned why the company will be charging an additional $10 for the same game on next-gen hardware, a 2K spokesperson told Polygon that the hike was due to the value of the game on next-gen hardware rather than an increase in development costs.

“We believe our suggested retail price for NBA 2K21 on next-generation platforms fairly represents the value of what’s being offered: power, speed and technology that is only possible on new hardware,” the unnamed spokesperson said. “While we are confident that NBA 2K21 will be a monumental leap forward for the franchise and a standout visual showcase on next-generation consoles, we recognize that it’s our responsibility to prove this value to our fans and NBA 2K players.”

While it remains to be seen whether 2K will be an outlier on next-gen pricing, or the herald of a new universal price point, an article from gamesindustry.biz published on Friday indicates that other publishers are considering following in 2K’s footsteps according to IDG Consulting President and CEO Yoshio Osaki.

“IDG works with all major game publishers and our channel checks indicate that other publishers are also exploring moving their next-gen pricing up on certain franchises,” Osaki said.

Base video game pricing has been relatively standard since the debut of the XBOX 360 in 2005. New games on the XBOX 360 and PS3 cost $59.99, even while Nintendo Wii games retained the previous generation’s $49.99 price structure. While Nintendo did ultimately increase its prices to match the $59.99 standard with the generational jump to the Wii-U (and continued that pricing structure on Switch), the base price for new games did not increase beyond that during the leap from PS3 and XBOX 360 to PS4 and XBOX One.

My Take

Since 2K’s announcement, many gamers and video game journalists and pundits alike have made the case for publishers looking for a price hike. Proponents argue that this price increase was “inevitable” following years of price stagnation despite exponential increases in development costs. Osaki even claims that development costs have increased by a staggering 200 to 300 percent since 2005, an astronomical figure that is shocking if it is to be believed.

However, the claim that video game prices have not increased since 2005 is naïve at best and insidious at worst. While it’s true that the price for base games has not increased, the rise of microtransactions, including pay-to-win schemes that riddled Star Wars Battlefront II at launch and continues to infect NBA 2K, has led to record profits for video game publishers. The industry as a whole generated $35.4 billion in revenue last year alone thanks, in large part, to microtransactions in games. Just one publisher, Activision Blizzard, raked in $3.37 billion in profits from microtransactions last year, even as it sacked nearly 800 employees the same month that it announced that staggering figure. Meanwhile, 2K games is charging $99.99 for players who want to play their game now and be able to upgrade to next-gen hardware once those consoles are released, a feature that other publishers like Microsoft and CDProjektRED are offering players for free. The fact that 2K is enveloping that upgrade behind a paywall plastered with the now deceased Kobe Bryant’s visage is a particularly disgusting move.

Proponents for a video game price hike also argue that other entertainment industries, like music and movies, have increased their prices, as well. However, many of the numbers that they’re using are misleading. Osaki told gamesindustry.biz that Netflix had increased its pricing structure by 100 percent, but the truth is Netflix cost $7.99 when it went digital in 2010 and subscribers can pay as low as $8.99 today, which isn’t even a 10 percent increase. Meanwhile music streaming service prices have been stagnant for years. Additionally, both movies and music often allow consumers to buy digital albums or movies at a cheaper price than physical releases, a price option that the video game industry does not offer.

But even beyond these more superficial price comparisons, there may be an even more pertinent underlying issue at play right now: a world economy on the brink of a potentially massive recession related to the COVID-19 outbreaks. As the U.S. has reported job losses at a massive scale, the amount of money many have to spend on expensive pastimes like video games is quickly shrinking. It’s already common for many consumers to only purchase five or less video games per year, a number that may dwindle further under another price hike. And even beyond the economics of an outbreak-laden recession, U.S. nominal wages have been largely stagnant since the economic recession of 2008, only increasing at a rate of 2 to about 3.5 percent year over year for well over a decade with the cost of living increasing right along with it.

I sympathize with those who argue that video games should cost more so that developers can make more. Video game developers are some of the most overworked members of the American workforce, and their products enhance all of our lives in sometimes incredibly powerful and important ways. But an increase in developer wages is not among the weak rationale provided by 2K Games when illustrating why next-gen games should cost more. In an economy on the brink of collapse and nominal wage increases barely outpacing inflation and the cost of living in the United States, publishers, particularly those that already engage in free-to-play microtransaction-laden sales models like 2K Games, may want to think twice before going all-in on an across-the-board price hike. At the end of the day, video games are a lot easier to give up than food and housing.

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