Are video games getting more expensive?

Stuff is just more expensive these days, right? I crunched the data to see whether this statement holds true for video games.

Are video games getting more expensive?

Video games are not getting more expensive once you take inflation and cost of living changes into account.

A quick google search will throw up plenty of results relating to the price of video games. There are articles in high-brow periodicals and magazines about the ‘booming’ or ‘predatory’ video game industry (depending on the way you want to look at it) plus plenty of exasperated posts on forums like Reddit.

Most forum posts asking why video games are getting more expensive are met with a few “well, actually…” responses. 

Those responses on Reddit are technically correct – gaming is in general cheaper than it has ever been – but they don’t present any evidence beyond anecdotes. I was curious, so I went hunting for some actual figures myself. 

The research: Are video games getting more expensive?

How expensive is video gaming for the average American these days compared to the average American in 1980?

The easy part was finding some sort of measurement to compare the game prices against: Median household income from 1980-2020 (in CPI-adjusted 2020 dollars) is good enough for our purposes. The hard part was finding out the contemporary prices of the games themselves.

Google knows a scary amount of stuff about you and your interests and activities but ask it what the original price of Ms. Pac-Man on the Atari 2600 and our data-hungry search tool goes conspicuously MIA. 

After at least 10 minutes of frustration, I happened upon a scanned collection of old department store Christmas catalogs for the sales prices up until around 2004, after which data collection became a lot easier thanks to the Wayback Machine captures of Gamestop pages. Here are the results:

The data: Are video games getting more expensive?

Graph showing how video games have become cheaper relative to the cost of living from 1980-2020
White line: Median household income (CPI adjusted 2020 $)
Gold line: Video game price (CPI adjusted 2020 $)

You can find the list of games, prices, and sources that I used here. This data might not be greenlit by an academic peer-review panel but I’d argue that it’s pretty indicative.

I’m a pretty average, casual gamer by most measures – how much would it cost me to buy the games that I would have wanted to play (or did actually play) in each year from 1980-2020? 

When were video games most expensive?

The early ’90s were a particularly painful time for video games enthusiasts, with Street Fighter (1992) and Mortal Kombat (1993) both being sold at Electronics Boutique for over $130 in CPI-adjusted 2020 dollars. Something to think about that next time you complain about Nintendo Switch games being too expensive at $60.

It took until 2004 until I, the average gamer, was able to pick up a new release or best seller for less than $70 in CPI-adjusted 2020 dollars (Grand Theft Auto: San Andreas on PlayStation 2) but, overall, the figure above indicates that the retail price of AAA games in the USA has been on a downward trend since the early SNES era

At the same time, the median household income has crept ever so steadily upwards, meaning that the relative price of video games has never been cheaper. Case closed. How dare you moan about this year’s almost-identical reboot of your favored EA Sports franchise. 

Only joking. This doesn’t come close to telling the full story. Notwithstanding the limits of the data used, it’s fair to say that even though video games are less expensive now relative to the average US household’s income, there are a number of reasons why games might feel more expensive now than ever before.

Why are games so ‘expensive’?

There are plenty of reasons why video games appear to be getting more and more expensive.

Free games, free-to-play games, and live service games

First of all, the entire dynamic of software sales has completely changed during the last thirty years

Most significantly, consumers are now far more used to content that’s free or cheap at the point of use (free in terms of financial outlay – a good rule of thumb is that for any software/app/game that’s ‘free’, the cost is your personal data). 

Being able to play mobile games for free or even get stuck into AAA releases on day 1 with a Game Pass subscription makes paying $70 seem absolutely crazy. 

There are, of course, loads of great free games out there, but there are also lots of ‘free-to-play’ games – the difference being that free games are completely free, and free-to-play games (such as live service games) have everything outside the base experience locked behind microtransactions. 

As some inattentive parents have found out, to their considerable cost, microtransactions can soon add up to a lot more than the cost of a single AAA title

It’s not just free-to-play games that are guilty of this, either. Take Gran Turismo 7, for example. Released this week at $69.99, it’s already copped widespread criticism for astronomically-priced in-game purchases

I don’t have as much sympathy for Halo Infinite players complaining about the price of purely aesthetic customizations considering they’re playing a AAA game for free, but it’s harder (if not impossible) to justify the approach taken by Sony and Polyphony Digital on Gran Turismo 7.

Gaming has entered the mainstream

Video games are also much more mainstream now than they were back in the early 1980s. That means that a far wider demographic of consumers, invariably including many people on relatively low incomes, feel like they are excluded if they don’t stump up the cash for consoles and games. 

It also means that, in many cases where demand is high and remains high, developers and publishers have no real reason to reduce prices. Nintendo is notorious for this, with critically acclaimed games like Mario: Odyssey, Animal Crossing: New Horizons, and Legend of Zelda: Breath of the Wild rarely going on sale even five years after their release as launch titles for the Switch.

The cost of living is through the roof

Another much more general point is that even if video games are cheaper now than thirty years ago, most other stuff is way, way more expensive.

The cost of living is magnitudes higher now, to the extent that even the most comfortable of millennials are struggling to afford their daily avocado toast and venti latte with almond milk. 

All jokes aside, the cost of basic necessities has comfortably outpaced the very modest growth in median household income from 1980-2020. There are many, many examples I could pick from to illustrate this point, but one of the clearest is the price of shelter: 

For a huge portion of Americans, that means rented accommodation – the average cost of which was almost 350% higher in 2020 than it was in 1980

Are video games getting more expensive? Conclusion

Video games are not getting more expensive. In fact, relatively speaking, video games have never been more affordable. 

However, when an ever-increasing chunk of the average income is going on things like rent, gas, and utilities, it’s no surprise that relative luxuries like video games seem more expensive even when they’re objectively not.

You may also like…