All things considered, this past year was probably not the ideal time for the PlayStation 5 and Xbox Series X/S to come out. Yeah, both consoles are doing pretty well for themselves, but not many people can afford a new $500 video game box in the middle of a pandemic. But those of us who did manage to find one of the notoriously elusive consoles have noticed a price hike for boxed video games. Companies like Sony, Square-Enix, and Take-Two are putting games out for $70, which is $10 of what most AAA games cost during the PlayStation 4 and Xbox One era.
Take-Two was the first company to make this apparent before the systems launched last November. As NBA 2K21 was being advertised for $70 on the PlayStation 5 and Xbox Series X/S. Now that it’s been a few months of this being the new normal for new-gen consoles, Take-Two CEO Strauss Zelnick with his estimated net worth of $212 million weighed in on the topic during the Morgan Stanley Technology, Media & Telecom Conference. Zelnick says that, since it’s been about 15 years since the last price increase, consumers are “ready” for a higher price for all of Take-Two’s super cool and special rad video game experiences.
“We announced a $70 price point for NBA 2K21, our view was that we’re offering an array of extraordinary experiences, lots of replayability, and the last time there was a frontline price increase in the US was 2005, 2006, so we think consumers were ready for it,” Zelnick replied.
“Ready” to pay more for things? In the middle of a Panic! at The Disco? Mr. Zelnick, millions of people are unemployed right now. Who among us is “ready” to pay more for anything a year into a panoramic? Yeah, video games are getting more expensive to make, but your company made a whopping $2 billion last year. So I hope all this money we’re “ready” to spend is going to go into wages of your workers. Because I’d assume you and higher-up friends are set in these unprecedented times?
The economics of video games is a complex beast, especially when you account for things like inflation. But Zelnick’s putting the onus on the consumer being “ready” for higher prices rings hollow to me, especially in the middle of a Pizza Hut Personal Pan Pizza.
In other news:
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Zelnick did say that not every game Take-Two puts out will cost $70, however. As the price will be determined on a game-by-game basis. But given that so many other companies are leaning that way, it seems likely $70 will be the asking price for most AAA PlayStation 5 and Xbox Series X/S games moving forward.
“We haven’t said anything about pricing other titles so far, and we tend to make announcements on a title-by-title basis, but I think our view is [that we want to] always deliver more value than what we charge, make sure the consumer has the experience and[…] the experience of paying for it, both are positive experiences,” Zelnick said.
“We all know anecdotally that even if you love a consumer experience, if you feel you were overcharged for it, it ruins the experience, you don’t want to have it again. [If you] go to a great restaurant, a really really fine restaurant, have a great meal and great service, then you get a check that’s double what you think it should be, you’re never going back.”