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Economics of Game Prices


JackKieser
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Games are like cars. When the new model comes out everybody wants to buy one and the price while reasonable can be a little high; as time progresses their value depreciates until they're practically worthless, especially if people hold onto them. But some games are hard to come by for various reasons and that rarity increases their value (unless the game sucks so hard it generates its own event horizon). Given that the condition of these rare games will vary wildly I don't think trying to offer the same price as if it was in 100% mint condition unplayed with 1,000,000 other copies out there is a sane thing to do.

So no, there should not be any regulation on the used game market just like there's not any regulation on the antiques market. You pay what's being asked and hope you don't have a counterfeit on your hands.

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So, you think it's ok that Game Stop is allowed to give you 25$ for a game trade in that they then turn around and sell for 50-60$? Yes, you could always make the argument that "you don't HAVE to sell to GS", but then, we could make the argument "you don't HAVE to get a mortgage for your house that's toxic and built so that you'll fail to pay it, causing a massive market crash", too. If the mortgage market can get regulated (and by the way, mortgages appreciate and depreciate in value, too, just like games and cars), a market for a non-essential item (hey, you could always choose to rent / lease; you don't HAVE to buy a house), why can't the used sales market?

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So, you think it's ok that Game Stop is allowed to give you 25$ for a game trade in that they then turn around and sell for 50-60$? Yes, you could always make the argument that "you don't HAVE to sell to GS", but then, we could make the argument "you don't HAVE to get a mortgage for your house that's toxic and built so that you'll fail to pay it, causing a massive market crash", too. If the mortgage market can get regulated (and by the way, mortgages appreciate and depreciate in value, too, just like games and cars), a market for a non-essential item (hey, you could always choose to rent / lease; you don't HAVE to buy a house), why can't the used sales market?

Are you a communist?

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I take this statement as a personal insult to my character and challenge you to a duel

You can head down that path, should you so wish, but I feel obligated to inform you that due to the Nekofrog-Is-Awesome-And-Always-Right-And-Also-Better-At-Guitar-Than-Sixto-And-Tensei-And-Fishy-And-Suzu-And-LuIzA-And-everyone-on-DoD-combined Bill of 2005, I will automatically win the duel.

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You can head down that path, should you so wish, but I feel obligated to inform you that due to the Nekofrog-Is-Awesome-And-Always-Right-And-Also-Better-At-Guitar-Than-Sixto-And-Tensei-And-Fishy-And-Suzu-And-LuIzA-And-everyone-on-DoD-combined Bill of 2005, I will automatically win the duel.

/me slaps nekofrog in the face with a super mario 64 cartridge inside of a white glove

come get some

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That's the problem though. As physical game copies are not licences but actual product to be sold, the right resell belongs not to the company, but to the consumer. GameStop used this privilege to create a market where game prices are more volatile, at the cost of more potential sales for the game publishers. And because GameStop also sells a lot of new games (can't have used game market without new games being sold first), game companies are a bit of a handicap as to how to deal with them. They can't rob of them of business, because pulling the plug from one of your largest retailers is a good way to slash your player-base in half, so they're looking for other methods.

Regulation is a horrible way to do this. While theoretically it makes for nice consumer prices, it's not really the way things are done in this country. The country you grew up in. The market is king here, and honestly, it's the publishers fault that they didn't find a way to take advantage of the used game market sooner.

I do find it mildly interesting that you keep tossing out economics, but unfortunately, everything that happens in this country revolves around money at some point. While in college, you may get high and mighty about how things should be, but once you're out on your own, you realize that you don't get paid for ideals, but on how you get things _done_. It's the same reason why we simply can't just throw our massive wealth at say, Nambia, and feed everybody, because if we did, we'd put everybody there out of work, destroy the local economy, and create a situation worse then the one already there. Supply/Demand, while oversimplified, is why I can say, "I will fix your computer for $50," and I can expect to get that money, because it's what consumers expect to pay for that particular service. For games, a luxury entertainment item, we can expect to pay a good amount from a AAA developer, not only because they sink a lot of time into the game, but because there's a legion of unseen stockholders who expect the company to produce money on that product.

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That's the problem though. As physical game copies are not licences but actual product to be sold, the right resell belongs not to the company, but to the consumer.

Actually, that's not entirely true. According to current copyright law (as it pertains to digital media) and the DMCA, when I buy a game, I'm not buying an actual game, I'm buying a disc with data, and a license to use the disc / data in a way the company deems fit; that's part of why breaking DRM, making game backups, hacking or modding your game, and other similar actions are so contentious. We, as consumers, have very few rights when it comes to purchasing digital media and using it. DRM is more "digital restrictions management" than it is "digital rights management".

GameStop used this privilege to create a market where game prices are more volatile, at the cost of more potential sales for the game publishers. And because GameStop also sells a lot of new games (can't have used game market without new games being sold first), game companies are a bit of a handicap as to how to deal with them. They can't rob of them of business, because pulling the plug from one of your largest retailers is a good way to slash your player-base in half, so they're looking for other methods.

Here's the problem: right now, the industry is too scared to piss off Game Stop, since they are the largest seller of video games; it forgets that Walmart, Best Buy, Target, and a whole HOST of other stores sell games now. The industry COULD, if they wanted to, include a little slip in the game or a blurb on the box saying that reselling the game constitutes a EULA violation, the EULA you implicitly agree to when purchasing the game (yes, implicit agreement to contracts is a law; I couldn't make that up if I wanted to). It's a slippery slope, of course, but it would finally bring to light one of the biggest problems with the DMCA, EULA laws, and the way the law deals with the used market: it's both legal to have a used market AND to restrict it through EULAs. Only one can exist: the right to sell something you've bought, or EULAs/DMCA. As far as gamers are concerned, we'd actually win either way, though the removal of the DMCA and the practice of EULAs would benefit us more. EDIT: The possible conflicts with this are all connected to the "first sale doctrine", whihch is supposed to be a restriction of copyright law allowing you to resell something you've bought. Implicit agreement is a powerful doctrine in its own right, however... The point is, it's murky, but could be made clearer through copyright law reform.

Regulation is a horrible way to do this. While theoretically it makes for nice consumer prices, it's not really the way things are done in this country. The country you grew up in. The market is king here, and honestly, it's the publishers fault that they didn't find a way to take advantage of the used game market sooner.

No, it's not. The market is king, except when the market isn't king. If the market was king, AIG wouldn't exist anymore. "Too big to fail" wouldn't be true in a free market society. In fact, in a TRUE free market, there would be NO restrictions at ALL... meaning no consumer protection laws or advocacy. No, the US has a rich history of regulating things, just usually in favor of business and not the consumer. After all, if the market REALLY was king, copyright law wouldn't be so boned today; instead, we, as consumers, are regulated from doing everything from making backups of software to installing that software on multiple machines (depending on the particulars of the DRM).

I do find it mildly interesting that you keep tossing out economics, but unfortunately, everything that happens in this country revolves around money at some point. While in college, you may get high and mighty about how things should be, but once you're out on your own, you realize that you don't get paid for ideals, but on how you get things _done_.

I AM on my own. My family kicked me out because they didn't approve of my girlfriend and didn't want to let me keep living in the States (they wanted me to live in Greece with them). I'm working for my money (hard, btw), and giving up much of my gaming because of it.

It's the same reason why we simply can't just throw our massive wealth at say, Nambia, and feed everybody, because if we did, we'd put everybody there out of work, destroy the local economy, and create a situation worse then the one already there. Supply/Demand, while oversimplified, is why I can say, "I will fix your computer for $50," and I can expect to get that money, because it's what consumers expect to pay for that particular service. For games, a luxury entertainment item, we can expect to pay a good amount from a AAA developer, not only because they sink a lot of time into the game, but because there's a legion of unseen stockholders who expect the company to produce money on that product.

Actually, according to original copyright law (as written in the Constitution), game developers are selling artistic works, and if the law hadn't been hacked into some Frankenstein monster in the early-mid 1900s, piracy would be legal today (you could only copyright works of science in the original law). In fact, piracy was legal many times in American history, as AltF4 lays out in his very thorough analysis of the history of the law.

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Actually, that's not entirely true. According to current copyright law (as it pertains to digital media) and the DMCA, when I buy a game, I'm not buying an actual game, I'm buying a disc with data, and a license to use the disc / data in a way the company deems fit; that's part of why breaking DRM, making game backups, hacking or modding your game, and other similar actions are so contentious. We, as consumers, have very few rights when it comes to purchasing digital media and using it. DRM is more "digital restrictions management" than it is "digital rights management".

This is a recent development, (last 2 years) and essentially unenforceable. You give someone physical media, they get to decide what happens to it. Companies are just now coming up with methods to make specific disks useless, but your DMCA argument is why things like digital distribution are becoming so large.

Here's the problem: right now, the industry is too scared to piss off Game Stop, since they are the largest seller of video games; it forgets that Walmart, Best Buy, Target, and a whole HOST of other stores sell games now. The industry COULD, if they wanted to, include a little slip in the game or a blurb on the box saying that reselling the game constitutes a EULA violation, the EULA you implicitly agree to when purchasing the game (yes, implicit agreement to contracts is a law; I couldn't make that up if I wanted to). It's a slippery slope, of course, but it would finally bring to light one of the biggest problems with the DMCA, EULA laws, and the way the law deals with the used market: it's both legal to have a used market AND to restrict it through EULAs. Only one can exist: the right to sell something you've bought, or EULAs/DMCA. As far as gamers are concerned, we'd actually win either way, though the removal of the DMCA and the practice of EULAs would benefit us more.

Yes, those other companies sell games as well (Walmart is the #1 retailer of video games in both the USA and worldwide), but GameStop is a large enough percentage that those AAA companies are going to cater to them anyways, because they are attempting to regain as much money as possible to meet shareholder demands. And while you do have a true point on the EULA bit, often times a consumer is allowed to sell their product in it's entirety to another person. Microsoft's EULA for Windows and all it's other products actually says it. It's an interesting ready. It's a value proposition, where things are a bit more expensive because you have the opportunity to sell the license later to recoup your dollar.

No, it's not. The market is king, except when the market isn't king. If the market was king, AIG wouldn't exist anymore. "Too big to fail" wouldn't be true in a free market society. In fact, in a TRUE free market, there would be NO restrictions at ALL... meaning no consumer protection laws or advocacy. No, the US has a rich history of regulating things, just usually in favor of business and not the consumer. After all, if the market REALLY was king, copyright law wouldn't be so boned today; instead, we, as consumers, are regulated from doing everything from making backups of software to installing that software on multiple machines (depending on the particulars of the DRM).

Thank Disney for the copyright hodgepodge. I'm not happy about this either. But it's not regulation needed here, but an overhaul of the copyright system in general. This is a separate argument, which belongs in a separate forum. Realize that a large part of this came about because the US Gov decided to give companies the same rights as individuals, and that these companies have essentially bought off the Gov. Pisses me off too, not much I can do except try to get measures in that reduce corporate involvement.

I AM on my own. My family kicked me out because they didn't approve of my girlfriend and didn't want to let me keep living in the States (they wanted me to live in Greece with them). I'm working for my money (hard, btw), and giving up much of my gaming because of it.

Congrats then I guess? It's great you're a part of the American working public. But GameStop still says that brand new used copy of a used games costs 97% of the MSRP.

Actually, according to original copyright law (as written in the Constitution), game developers are selling artistic works, and if the law hadn't been hacked into some Frankenstein monster in the early-mid 1900s, piracy would be legal today (you could only copyright works of science in the original law). In fact, piracy was legal many times in American history, as AltF4 lays out in his very thorough analysis of the history of the law.

While in the early history of the USA, this may have been true, the Gov realized that if the continued innovation was to be allowed to grow in the US, that a system had to be put in place to allow creative works to be locked in, and allow the creator to make money off of it. Piracy sucks, especially when it hurts your neighbor, or your neighborhood, or yourself. You'll see many cases where we still rip off foreign companies, because there's no law in the world that says we can't. We just don't like it when we do it to ourselves. But Piracy is a moot point in terms of software sales, as it's just a number on a spreadsheet to me. Publishers are looking for and have found ways to combat this without imposing silly DRM on their customers. It sucks, but we're at a point now that dealing with it is the modus operandi.

I'm asking you straight up, bring this back to why games cost as much as they do. No piracy, no copying, no copyright. Just pure economics. Same thing for the used game market. What drives consumers to pay the slight markdown from a company that is obviously taking advantage of the situation? GameStop has been doing this for years, as well as many other companies. GameStop is the only one still around. That right there should tell you that publishers have found ways to deal with the lost sales. With the advent of multiple Digital Distribution companies, there are also far more avenues where game prices can come way, way down (even AAA titles), and both gamers and developers see additional value as gamers get the games they want for the costs they want, and dev's get to see their audience balloon, and even more money roll in to pay for the next title.

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This is a recent development, (last 2 years) and essentially unenforceable. You give someone physical media, they get to decide what happens to it. Companies are just now coming up with methods to make specific disks useless, but your DMCA argument is why things like digital distribution are becoming so large.

Yeah, well, they're TRYING to enforce it, that's for sure. Even against children. It's kind of a clusterfuck, and I'm sad that it's still going on.

Yes, those other companies sell games as well (Walmart is the #1 retailer of video games in both the USA and worldwide), but GameStop is a large enough percentage that those AAA companies are going to cater to them anyways, because they are attempting to regain as much money as possible to meet shareholder demands. And while you do have a true point on the EULA bit, often times a consumer is allowed to sell their product in it's entirety to another person. Microsoft's EULA for Windows and all it's other products actually says it. It's an interesting ready. It's a value proposition, where things are a bit more expensive because you have the opportunity to sell the license later to recoup your dollar.

Didn't know that about Microsoft's licenses, although I'm sure I would if I read the damn thing. :P

Thank Disney for the copyright hodgepodge. I'm not happy about this either. But it's not regulation needed here, but an overhaul of the copyright system in general. This is a separate argument, which belongs in a separate forum. Realize that a large part of this came about because the US Gov decided to give companies the same rights as individuals, and that these companies have essentially bought off the Gov. Pisses me off too, not much I can do except try to get measures in that reduce corporate involvement.

Well, I'm glad to hear there's someone else out there with common sense. The system is in DEFINITE need of overhaul.

Congrats then I guess? It's great you're a part of the American working public. But GameStop still says that brand new used copy of a used games costs 97% of the MSRP.

Oh, I wasn't looking for accolades or anything. You just said someone in the workforce can't or wouldn't hold my position, and I was giving myself as an example that you were mistaken.

While in the early history of the USA, this may have been true, the Gov realized that if the continued innovation was to be allowed to grow in the US, that a system had to be put in place to allow creative works to be locked in, and allow the creator to make money off of it.

That's the thing... that system didn't need to be put in place. Again, I'll direct you to the thread I linked to above for the full breakdown, but suffice it to say, it's a widely held belief that without copyright artists wouldn't get paid, and that is, historically, actually not true. It's a lie told because on the surface it makes sense, but history shows it to be nonsense.

Piracy sucks, especially when it hurts your neighbor, or your neighborhood, or yourself. You'll see many cases where we still rip off foreign companies, because there's no law in the world that says we can't. We just don't like it when we do it to ourselves. But Piracy is a moot point in terms of software sales, as it's just a number on a spreadsheet to me. Publishers are looking for and have found ways to combat this without imposing silly DRM on their customers. It sucks, but we're at a point now that dealing with it is the modus operandi.

Well, I wish software companies got that memo, because they sure as hell don't act as though "piracy is a moot point in terms of software sales"; if anything, their continued and constant litigation proves that they think it's QUITE relevant.

I'm asking you straight up, bring this back to why games cost as much as they do. No piracy, no copying, no copyright. Just pure economics. Same thing for the used game market. What drives consumers to pay the slight markdown from a company that is obviously taking advantage of the situation? GameStop has been doing this for years, as well as many other companies. GameStop is the only one still around. That right there should tell you that publishers have found ways to deal with the lost sales. With the advent of multiple Digital Distribution companies, there are also far more avenues where game prices can come way, way down (even AAA titles), and both gamers and developers see additional value as gamers get the games they want for the costs they want, and dev's get to see their audience balloon, and even more money roll in to pay for the next title.

First of all, a lot of it is social in nature. Americans are lazy and don't really care about protecting themselves as consumers. A lot of people KNOW that GS gives them a raw deal, but do it anyway. When I ask fellow gamers about it, they say "some cash is better than no cash", and "well, I can't change it", which is definitely NOT how they deal with consumer protection in, say, Europe (where they're protesting nearly every other week, it seems). GS gets away with a lot because we're a lazy people.

And, game companies have ALREADY ADMITTED that GS is a reason they charge more. Look at Project 10$. The fact that it even exists is known to be because of used game sales, and I count that as an added cost to games (obviously for used game purchasers). If devs got a cut of ALL used game sales, they'd make SO MUCH MORE money, which is what they want. EA found a way to do that through P10$, and I guarantee you it will pick up steam.

Of course, all of this revolves around an assumption that, if GS gave publishers a cut of the used game market, that publishers WOULD, in fact, reduce MSRP, which I don't really believe for a second would happen; games would still cost 60$. But, we'd at least take away one of their arguments, so that they have 1 fewer justification for charging so much. Chip away at the justifications one by one and you'll eventually arrive at the conclusion that they charge so much because they simply like those large bonuses, not because of rising dev costs or some other load of crock.

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That's the thing... that system didn't need to be put in place. Again, I'll direct you to the thread I linked to above for the full breakdown, but suffice it to say, it's a widely held belief that without copyright artists wouldn't get paid, and that is, historically, actually not true. It's a lie told because on the surface it makes sense, but history shows it to be nonsense.

Well, I wish software companies got that memo, because they sure as hell don't act as though "piracy is a moot point in terms of software sales"; if anything, their continued and constant litigation proves that they think it's QUITE relevant.

First of all, a lot of it is social in nature. Americans are lazy and don't really care about protecting themselves as consumers. A lot of people KNOW that GS gives them a raw deal, but do it anyway. When I ask fellow gamers about it, they say "some cash is better than no cash", and "well, I can't change it", which is definitely NOT how they deal with consumer protection in, say, Europe (where they're protesting nearly every other week, it seems). GS gets away with a lot because we're a lazy people.

And, game companies have ALREADY ADMITTED that GS is a reason they charge more. Look at Project 10$. The fact that it even exists is known to be because of used game sales, and I count that as an added cost to games (obviously for used game purchasers). If devs got a cut of ALL used game sales, they'd make SO MUCH MORE money, which is what they want. EA found a way to do that through P10$, and I guarantee you it will pick up steam.

Of course, all of this revolves around an assumption that, if GS gave publishers a cut of the used game market, that publishers WOULD, in fact, reduce MSRP, which I don't really believe for a second would happen; games would still cost 60$. But, we'd at least take away one of their arguments, so that they have 1 fewer justification for charging so much. Chip away at the justifications one by one and you'll eventually arrive at the conclusion that they charge so much because they simply like those large bonuses, not because of rising dev costs or some other load of crock.

Hey, we're getting somewhere now! :D

I'll just have to trust you on the copyright thing. I've heard/seen similar arguments elsewhere, and it does make sense. I believe it's the root of why music is in the position it's in today, where the RIAA is scrambling for profits as more and more artists tell them to buzz off. Anywho.

Your GS counterpoint is solid, I'll leave that be. Not sure project $10 will pick up steam as it's just as likely to kill the secondhand market completely. There will be a lot of people not happy about that, but if game prices come down to compensate, maybe it won't be all that bad. It'll just suck to loan games to friends.

So root of the problem. Games are too expensive, specifically games from AAA devs. We're seeing multiple price points more now then ever though, mostly from online retailers. I don't believe that the bigger firms will bring the prices down as long as sales remain as high as they do (freaking Black Ops selling 20 million units...). In fact, I expect them to keep inching the envelope even higher, specifically from houses like Activision Blizzard who can produce good, well polished games time and time again. Until people stop paying them for the privilege of sticking a DVD in their hand, game prices on the AAA side aren't going anywhere. People like large bonuses, mostly because it keeps top talent around, and allows the company to keep turning the gears that effectively print money.

Thankfully, those online retailers have seen the light, and things like the Steam sale and many other discounts have made gaming on a budget far more reasonable. The effective 'bargin bin' of the past is now applied to all games once the initial grab has been made, and more games are discounted now then ever.

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To echo Max's point, game prices are NOT higher than ever. Game prices are lower than ever. I don't get why people are arguing on such faulty assumptions. Premium console games are $60. They were about that much historically, or even higher, so when you factor in inflation they are definitely lower than ever. But now we also have digital distribution/STEAM sales, Gametap, Goozex and the extensive secondhand market offering the same exact games in new or like-new condition for way cheaper as well.

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I don't know if this has been mentioned yet, but part of the increase in game prices up from $49.99 to $59.99 and sometimes higher is because of the increasing difficulty that some systems implement to actually create a game. XBox360 is about right at the baseline for devs where it's not too difficult to produce a game of extreme magnitude, whereas PS3 has such advanced technology that it almost is too powerful, and the Wii is just far too gimmicky and annoying to program for that most games that used to be ports to all three major systems (at the time, Gamecube, PS2, and XBox) now only hit Sony and Microsoft's shores.

Also, keep this in mind with Gamestop. Yes, publishers are pissy that they don't get money off used game sales, but lets face the honest truth here: the bottom line for games comes from new sales, not used. Used game stores have existed for as long as I can remember, working their way into second hand stores and old music stores. Gamestop is essentially a reseller. I can drive 5 miles from my house and hit a Movie Trading Company, 2 Gamestops, a CGX (game exchange), Entertainmart (game exchange), and about 3 mom and pop stores that deal in game exchanging in one way or another. The reason they're pointing a finger at Gamestop is because it's the biggest target, and they want to see if they can pull more money out of their games. It's bully tactics.

Simply put, once a person purchases a game, and the company that produced and developed it get their cut, that's it. The company got their share. If the person that owns the game decides to trade it in or sell it because the game is able to be beat in hours, and has no replay value (see: 75% of games today), that is their choice. The game companies should have no right or say in that. Gamestop gives gamers the ability to trade in their games, albeit for insultingly low deals most times, to get new games. The games that go out from people trading in come out of their pocket. Those games that get traded in may never even sell. It's a risk, but that's what second hand stores do. Even still, the game company received their payment at the initial purchase. They still make tons of money off of new game sales. Sure, some people only like to buy used but in this economy, most of us (myself included) can't afford to drop $500+ every month on buying numerous games in the first place. If it wasn't for Gamestop, I guarantee I'd find them elsewhere like eBay, Craigslist, MTC, and wherever else I can.

Sadly, the cost of gaming is out of control. I used to pay $10k a year on gaming alone. Since then I've modded almost every system I have, I pay for the games that I really want (especially if they're made by indy or smaller devs), and all I continue to see is the same formula...cost goes up, replay and gameplay value goes down. What happened to the days where you could buy a game and it'd take you 40-60 hours to beat, and that's if you didn't do anything but follow the storyline completely? Better yet, why is it that DLC, something originally meant as a way to build upon a completed game, is now a way for devs and publishers to push out a half-completed game, then charge MORE for the rest of the game later on? I'm looking at you, Fable 2.

If you want to look at some interesting things with the gaming economy, look up how Activision almost pulled out all support from Sony and the PS3, or how many game devs have either considered, or went through with, canceling exclusivity to PS3 or Nintendo due to how costly it is to produce games on either system.

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I was 8 when my dad bought me my first console (a Genesis), and he had to work for... a lot longer than I would have wanted him to in order to afford it (in retrospect, of course; 8 year olds tend not to care about those kinds of things).

Also, I don't care if games are cheaper NOW than they were THEN (with inflation); they're still too expensive. Really, everything is, with few exceptions, but we're talking about games here. Just because game prices are still around the same / a little less (with inflation) as they were in the 80s / 90s, that doesn't make it acceptable... that just means that they were too expensive back then, too.

Besides, neither one of us even brought up the premise that games are more expensive now, at least not in our recent posts. Just that they ARE expensive, relative to the costs of other forms of entertainment now. 60$ is a lot of money for an 8-10 hour experience (on average; there are outliers, like ME / RDR / MMOs).

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This is off topic, but intresting.

I decided to tally up my MMO expenses with WoW. Mind you, I believe I've gotten every dollar's worth out of the game.

Subsciber since July 2005 = about 68 months * $15 = $1020

Base game = $60. All three expansions at launch = $120 ($40 each).

One Character race change = $25

Grand total on one game? Approximately $1225, probably less because I tend to pay by the 3 month block, which comes out to closer to 14 a month.

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