What’s fair price for video games?

You can see the Korean version of this article at:

https://www.gamegeneration.or.kr/article/34e447be-d2b1-48f0-85e6-eb63ee2f907b

In Korean gamer communities, there's this saying about playing games from the Steam library: "Back then, we never paid to play the game. Nowadays, we never play despite paying the game." The phrase sarcastically highlights the contrast between the game market back in the 80s-90s, when no one actually paid a fair price for video games with the abundance of pirated and copied games in Korea, compared to now with digital game distribution channels when people do not play the game despite after purchase.

The internet is flooded with countless games available to play at any time. We are living in an era where people can purchase more game easily through online digital game distribution channels than what humans could possibly play in a lifetime.

The normalization of digital distribution, like Steam, has certainly contributed to lowering the entry price of a video game. But coming up with a fair amount of price tag in reality is a bit more complex than that, and it is difficult to say whether the game prices have truly become affordable than before. The regular release price of so-called “AAA” game titles has been steadily on the rise, not to mention all those excessive special editions (e.g., deluxe packages, limited editions) that cost well over ₩100k (approximately $80).

As such, in some degree games are affordable form of entertainment, but at the same time, they deemed as expensive. To fully comprehend this contradictory situation, we must start asking ourselves: what is actually a fair price for video games? We do know that a considerable amount of manpower and resources go into video game production. So, being able to come up with a mutual range of fair prices would contribute to the industry in terms of securing sufficient profits for the creator and, thus, the necessary funds for the development of a better game. It would also contribute to its users that fair price can contribute to a continuation of a good product that offer enjoyable and enriching virtual experiences.

Challenges in Determining Regular Prices of Video GamesHistorical records suggests that the pricing of video games was not never really calculated based on systematic business forecasts but often by arbitrary guesswork. The normative rules of game prices have frequently changed as well. For example, early arcades operated on fixed-price coin-op business model, where the playable time per coin heavily depended on how the player is good at that particular game. Ironically speaking, the more skilled players play longer while spending less, resulting in fewer profits for arcade operators. (This led to instances where skilled arcade-players in Korean arcades were occasionally kicked out from the premises, with a coin refund, to make way for the next player in line.) As such, the cost of complete gameplay experiences varied from person to person, largely contingent on their gaming proficiency. Of course, it not all gamers back then expected to achieve complete gameplay experiences in every arcades.

The emergence of console and PC “package” games introduced the concept of fixed prices in the game industry, which meant people could pay the same price regardless of the amount of gameplay hours of each user. Each cartridge, disk, or CD was sold at a fixed price, gradually forming an average price range for games. But with the rise of online digital distribution channels and their mass-scale discount systems, real-time price controls, and game subscription schemes, the range of regular prices for package-type games has begun fluctuating again.

Determining the fair price of a game has become even more complicated with the rise of the micro-transactions in games, which has become increasingly prevalent in the online/mobile game era. Now the cost of a game is not only about the gaming proficiency but also the total amount spent in-game. The gameplay experience of a heavy user who spends $1,000 on micro-transactions in a free-to-play game like Uma Musume: Pretty Derby (Cygames, 2021) would vastly differ from that of someone who didn't spend a dime in that game. In such a vastly different player-base, coming up with a mutual ‘fair’ price is certainly not an easy task. 

What I would like to note here is that the topic of regular price of a game and the appropriate cost (i.e., what is deemed as appropriate amount of money that one can spend in games) are a different thing. Because, to put it simple, the amount of coins that a player bring to arcade shop is not just about how much each session of a gameplay in that particular arcade cost. Rather, it’s about how many sessions of gameplay that the player is going to (or willing to) pay, multiplied by the cost of each gameplay session.

As such, answering the question of 'what is a fair price for a game' is not solely about the determining the sales price tag of a game product, but also about finding a mutual balance between producers and consumers – in a way to maintain a sustainable cycle of production, distribution, and consumption. While individual purchasing power is certainly an important indicator to look at, but the primary concern lies here is about how goods (in this case games,) can be fairly exchanged between producers and users.

Then another thing that needs to be addressed is the issue of today’s digital game distribution method, specifically, its pluralistic nature of game as both a product and a service. In the arcade era, games were primarily operated as a rental business. Then, gradually, they transitioned into owning the game (or game machines) as goods in the home console and PC game era. However, with the normalization of online/mobile games, there has been a shift back to rental services – games that are channeled through server-based, internet-connected platforms. Therefore, we are now living in an era where games cannot be explained by a single value; rather, they are both products and services that intersect and coexist. So there cannot be a simple answer regarding the fair price of games.

And this is not even considering all those numerous discounts deals and subscription services. So it is evidently clear that there is no magic number about ‘what is the fair price’ in a game – we cannot do simple math by ticking checkboxes. One ideal approach is perhaps to first examine the amount of money spent on game production and then propose a range of unit prices that could potentially recoup those production costs for its creators within a reasonable timeframe. Then whether that price range is acceptable are ultimately determined consumers, by finding just the right balance between the market’s natural supply and demand. Clearly, it’s not an easy task. But a tasks that must be done.

Why should we talk about the fair price of games?

The Korean Consumer Price Index (CPI) is calculated based on the cost of 480 essential goods and services, served as a common indicator to determine South Korea’s regular living cost and inflation rate. Among these,  47 fall under the category of “entertainment and cultural activities”, which include activities such as purchasing musical instruments, computers, film tickets, and books, and the costs of travelling and even repairing digital devices.

However, game-related expenditures are not included in Korean CPI. Despite numerous reports about the significant increase in South Koreans' usage of games, and despite all those provocative media coverage of somebody ‘spending tens of thousands of dollars on video games in micro-transaction instead of doing something productive’. Some easily solution is to add already existing collectable data such as PC-bang hourly fees and average of online entertainment purchases. Even if so, there are clear limitations; as they do not fully capture the overall game-related spending patterns of general South Korean players.

This call for thorough actions in order for us to truly able to say that games have become one of the mainstream media – regarded as one popular media and enjoyed as any other daily leisure activity. This would include polishing our societal system and facilitating infrastructures to finally acknowledge gaming as an act of leisure and cultural fulfillment in contemporary society, and economic analysis on game-related consumptions.

For instance, Korea do have basic reports on how much money people spend on games per month and what the highest and lowest prices are – such as the Game User Census Report conducted annually by the Korean Creative Contents Agency. However, there are still rooms for improvement as those numbers are isolated from the overall economic index, such as other consumable indexes in Korean CPI. While the cost of watching films, television shows, and portable multimedia devices is accepted as a ‘valid’ indicator of the livelihood of South Korean households, the cost of playing games is still missing. Now is the time when we should finally acknowledge the significance of the cost of software that is called video games. And not just the price tag of the game itself but also the significance of games in the overall socioeconomic context.

This then leads to my question, “What is the fair price of games?” In this complex, ever-connected era of gameplay, the question shouldn’t be limited to “how much should the game product cost” but rather should target the fundamental question of “what games mean” – the value of game-related consumptions intersect with other means of our entertainment, social, and leisure activities. Instead of fixated by the price tag of a game itself, we should start asking ourselves how the game-related expenditures are compared to other leisure and cultural activities. Why do people choose to spend money on games rather than other means of media? What’s unique about games? It is now time to surface these questions that are currently encapsulated within gamers' communities and web forums, further into mainstream societal discourse.

Lastly, perhaps we now need to start asking the very fundamental question of “What is the (means of) fair price of games?” Because, controversial topic such as the toxicity of impulsive or excessive game micro-transactions, or the irony of free-to-play (that, there’s no such thing as free to play anything), eventually leads to the fundamental question; what could account for the price of gameplay? What are the fair means of purchasable in gameplay? What can be quantified and what cannot? And how to measure them? We must realize that we no longer live in the era of a simple supply and demand market that can determine the simple one-for-all price of games. Instead, now is the time to embrace this ever-complicated question even to video games as medium itself.