Break the Bank or Break the Habit?
Sixty dollars is a pretty arbitrary number – not a huge amount, but still a decent enough chunk to treat yourself to something nice and reasonable. So if we asked you what you could do with $60, what would your options be? Go out to dinner? Grab a nice addition to your wardrobe? Buy a new video game?
Of course, the cost of dinner is fluid, determined by several variables, like the quality of the food you’re ordering, how much of it you’re ordering, and the tier of establishment you’re dining at. The same goes for clothing, which has varying prices based on things like designer bands, amount of fabric used, and quality of materials.
But have you noticed that video game prices tend to be mostly static, at $60 a pop? Well standard editions, anyway. Video game collector’s editions can range anywhere from eighty to hundreds of dollars. Why are CE’s so expensive, and how are video games priced in the first place?
Standard Edition Games
Well first let’s look at how standard edition games are priced, and why we can just about always – at least for the foreseeable future – count on AAA video games costing us about $60 a pop, regardless of the type of game, developer, or release date.
The truth is, $60 is the current price of video games because it’s a comfortable number and it just works. Publishers know they can count on a minimum of $60 per game to guarantee them a substantial enough cut to support themselves, but also knowing they’ll be able to earn more money through microtransactions, DLC, and collector’s editions of video games (more on that later) down the line.
Now in addition to the publishers, you’re probably thinking that the distributers, which are the shops that sell the games, need a cut, too. And you’d be absolutely right, although that cut isn’t as much as you might think. And so you can also probably guess that distributers would prefer a larger piece of the pie than they get.
The truth is, distributers frequently take a hit when stocking new games because people often hold off on purchases until they’re able to find sales. This is part of the reason specialty game stores like GameStop offer just a fraction of your money back for used games, but sells them for so much higher. It’s actually sales from the used games that are most likely keeping the company afloat – not new titles.
Since online retailers, like Steam, are known to have frequent sales, as we mentioned before, hungry consumers are waiting to take advantage of the discounts that online retailers can provide. And they’re able to do this because obviously, digital copies cost less to produce than a physical copy of a game, so even at a sale price they’re not taking too much of a hit.
And the last, but maybe most vital reason for the $60 price point, is simply because it’s a number people are willing to pay. And sure, we’re willing to pay more for DLC and limited collector’s editions video games (again, more on that later!), but for the standard game itself – $60 is a number people have accepted, but aren’t willing to go much higher for a product we’ve gotten cheaper for such a long time.
Publishers know that consumers are willing to pay $60, but any higher may make the market unpredictable, so it’s in their best interest to keep the cost at something they know works. And that’s all well and good, until you consider the production value that goes into making a AAA title, which is usually well into the millions, and often into tens of millions.
At least that’s what our best guess is. If you’ve ever tried to look into how the price of video games is determined before, you’ll know that developers are particularly secretive of their production budgets. One reason for this could be that they just don’t want the public to know, for whatever reason. But the more accepted reason seems to be because often, the developers truly don’t know how much they spend on their games.
Increasingly big productions like detailed graphics, cinematic cut screens, and intricate storylines all drive the price of a game up. And obviously if a developer is spending tens of millions just on making the game, they’ve got to market it in order to make it sell, which means they’re investing even more money into the title – in some cases more than the game cost to make in the first place.
Although it’s hard to know the true prices of game development, given all of the mystery surrounding budget and the additional factors that go into marketing, staffing, etc., we know a game production cost can be anywhere from $1m to $100m, with a tendency to lean on the higher side.
So knowing how huge production budgets can be for a single game, and knowing that the price point needs to stay pretty firmly planted at $60 in order for the current market to remain stable and maintain purchasing habits, if the developer wants to make what they determine to be a reasonable profit, they’ll need to make up that extra money somehow…
Collector’s Edition Games
DLC, microtranscations, and collector’s editions video games are all attempts for the developer to earn additional profit on a game that they’ve underpriced in relation to the cost it took to make. And that’s why you’ve undoubtedly noticed that there seems to be a lot more “limited” collector’s editions of games than there were even 15 years ago. Everyone’s jumping on this bandwagon.
So now that we know why video games are priced the way they are, we need to look at how the pricing for collector’s editions of video games is determined. Let’s look at common components of special edition sets.
If you’re a hardcore fan of your favorite video game collector’s editions, what you might be looking for is a figurine you can nab with your game. Model figurines are often the centerpiece for a collector’s edition. Now figurines can be tricky to price point, but they’re usually between $15-$30, although larger than normal or hand-painted figurines can cost closer to $100. The costs behind these figurines are complex: design, 3D-modeling, material choice, production, priming, coloring, and all accompanying logistics. For example, the price of making a mold for a figurine can differ based on a myriad of factors. A single-cavity mold for a simple keychain might only be $1000-$2000, but when producing complex items (like a custom controller) mold costs can be upwards of $30,000.
A common piece of a collector’s edition set is a video game soundtrack, which can range between $10-$40 depending on the number and complexity of songs. You’ll also find posters included in collector’s edition packages, which are about $10 a pop. If you’re a fan of art books, you’ll be able to snag what’s probably a $10-$30 value depending on the number of pages and collection of art inside. And speaking of art, if your collector’s edition is cool enough to include a comic or short story to supplement the game’s plot, you can count on adding another $5-$10 to your total. And all this isn’t even including any DLC or extra content that might have been included in the set.
And these are just the items that we tend to think about most when considering content of collector’s editions. The special edition boxes or steel game cases themselves also have several costs. While most fans are primarily concerned with the contents of the box, the box itself is the first thing they will see and can make or break a first impression. Shoddy packaging can ruin the pristine feel of a collector’s edition.
Most collector’s editions boxes are simply cardboard, but the costs behind cardboard are more complex than most would think. While a standard corrugated box can be relatively sturdy and inexpensive ($2-3 for a standard full print label box, cheaper with higher quantities), the tactile quality leaves much to be desired. A more appealing option is a premium rigid box, such as the iPhone packaging. These can also be produced with a matte finish and wrapped corners, which nearly eliminates the cardboard feel entirely. But when considering start-up costs (up to $3000 for custom boxes), printing, and quantities, rigid-boxes can be a hefty, but worthy, investment.
The cost analysis doesn’t end here. We’ve broken down a lot of the common costs for the components of the collector’s edition. Next comes logistics; these materials are often produced overseas and now the next hurdle is to get all the components packaged together. International customs can make this a difficult process and time is money. After adding logistics costs (which can vary on too many factors to list), the price point we currently have is wholesale cost for the publisher. One more markup to account for the remaining costs leads to the final retail price of the collector’s edition.
Add up the price of the game itself, plus the extras you’ll get in the box set (including the box itself), and then add a markup (because remember, the point of these sets is to make additional money for the developer) approved by the dev, and that’s how you end up with the price of a video game collector’s edition.
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