Now that Rockstar Games has announced that Grand Theft Auto 6 will cost $80 for its standard edition and $100 for its Ultimate edition, time will tell whether more game developers and publishers will follow this up by raising the prices of their titles. Speaking to IGN, a few industry analysts have offered their thoughts on the matter, and have noted that we are more likely to see more variance in pricing than games simply becoming more expensive.
“We see much more variability in launch pricing now than we have seen historically in the video game industry,” said Circana’s Mat Piscatella. “But I’m sure more games will start pushing towards the higher end of the price spectrum, especially given everything happening in the macro-economic environment. When Call of Duty 2 released at $59.99 on the Xbox 360 in 2005, other games quickly followed. Would these other games have gotten there at some point, anyways, even without Call of Duty 2? Sure. But having a big game prove the viability of the price point can help make pricing decisions a bit easier.”
CEO of Kantan Games, Dr. Serkan Toto, believes that we might see more publishers seeing the success of Grand Theft Auto 6 as a way for them to get in on the action as well. “The $80 price tag for GTA 6 makes charging higher prices much easier for other AAA game publishers, exactly because it is such a big release.”
“Take-Two did it before,” explained Dr. Toto. “Why should it not become the trailblazer for the industry again? Jumping from $70 to $80 is a 14.3% price increase, which is quite a lot. It will very much depend on the game, but I can easily see some marquee titles going for this price, perhaps even this year, too.”
Niko Partners’ director of research and insight, Daniel Ahmad, noted that not every game will be able to get away with charging $80 in current market conditions. However, Rockstar Games is expected to be one of the companies that can get away with it, “as players understand the value they’ll receive from the title. We expect strong pre-orders, with day one sell-through exceeding $1.2 billion globally.”
Piers Harding-Rolls of Ampere Analysis has pointed out that Nintendo was also able to get away with an $80 price tag for Mario Kart World. “Publishers will be aware that some games get a pass at this level while others are likely to face a consumer backlash,” he said. “As such, I don’t think this means that all AAA games will be priced at $79.99 for the standard edition moving forward. Many players spend more than that on Deluxe and Ultimate editions anyway to get early access to games or unique in-game items, so for enthusiasts the standard edition pricing is not a factor.”
NYU Stern School of Business professor and industry researcher Joost van Dreunen believes that companies will have to “earn” the right to charge $80 for their games.
“In the current economic environment, an $80 price tag is earned, not given,” van Dreunen said. “Charging that much for the vanilla version of a game is only justifiable for well-established franchises capable of setting the tone culturally. It also widens the gap between S-tier game makers like Take-Two, Nintendo, and EA, and everyone else. I expect that especially those publishers like Ubisoft that are already feeling the burn will have a harder time in the coming period.”
Rhys Elliot of Alinea Analytics believes that publishers are in for a rude awakening if they think that they can charge $80 for their games without having the same cultural impact as a GTA or Mario Kart title. He noted that, despite its power over the market, even Grand Theft Auto 6 couldn’t push beyond the $80 mark.
“I think a lot of publishers are about to learn that the hard way,” said Elliot. “GTA 6 has more pricing power than any game on earth, and it still didn’t go above $80. If the biggest release in the industry’s history looked at the ceiling and chose not to break it, that should tell everyone else the ceiling is real, and they’ll smack their head on it. The danger is that publishers read ‘GTA is $80′ as a green light and push their own run-of-the-mill or new-IP games to $80, when the lesson is the opposite: even GTA didn’t think it could go higher.”
Going into more detail about just what kind of power Grand Theft Auto 6 has over the market, Elliot noted that any game that can hit that price point needs “a captive, price-inelastic audience that won’t shop around or wait for a discount.” This is why companies like Nintendo can get away with it. He also noted that other companies like PlayStation and FromSoftware also have the brand strength to do so if they choose to. Other companies have to deal with the fact that they will lose out on price-sensitive buyers. Due to this, Elliot believes that most publishers will still stick to a $70 price tag as the baseline, with $80 or $100 premium editions also being available.
“The publishers to watch out for are the ones who mistake GTA‘s runway for their own,” explains Elliot. “Their more ordinary games won’t carry $80, and the sales data will tell them so within a quarter.”
Grand Theft Auto 6 is coming to PS5 and Xbox Series X/S on November 19th.
