Are Video Games Companies Robbing Us Blind?

Video games these days set you back £40 or $60USD depending on your currency. Not forgetting the cost of the consoles and for playing online. For a lot of us this is prohibitive enough for us to buy about 8 games a year. Usually we limit our purchases to games we already know - Tiger Woods, Gears of War, Zelda - or to those one-off epic games that blow reviewers away like Fallout 3.

Really this is similar to the film industry. We stick to what we know, but at $60 per title are the games companies sneaking up behind us and slipping their hand in our pockets? And do we know or care?

Why are they playing on our gaming addiction by making gaming too expensive?

Through my dealings with HomebreWare, the makers of software that allows you to play copied games on your Nintendo Wii, I know that most people do not know why games are so costly. I come clean that until I tried my hand at selling games online - about eight years ago and with no success -I had no idea either.

The games were distributed from a wholesaler who was equipped to deal with ‘small fry’. My orders were for a few games at a time, just enough to evade the delivery charge! They even gave me the goods on credit amounting to several thousand. Aah, those were the heady days of carefree and uncomplicated credit. Try getting a credit account now; they’ll want to know everything save for how often you wash your hair.

So where did my wholesaler get their games from?

The manufacturer of course. The price I paid from the wholesaler was set in stone so they made sure they made their profit. As a retailer all I cared about was making money - which ultimately I didn’t.

As a rule a game back then for the PS2 or Xbox cost me, as a retailer, about £15 or $25USD. This was around the time the high street retailers were selling games for £20-£25/ $40USD. I decided to be a maverick and undercut them, selling games for £20/$30USD. £5 profit per game you think? Think again buster! There were the postal costs as well as the overheads of the business. Ok, I was running it from my bedroom but there was the cost of pizza, fried chicken and cola. And don’t forget that back in those days the turtle's pace, non-cable internet access from AOHell was way overpriced.

The highest costs were marketing. I had no business savvy and was as carefree as the credit companies. Carefree enough to indulge in pay per click ads with Google and to register with a shopping comparison site that was also pay per click. The result was £3,000 of clicks and about 10 sales. Anyone smell a rat here? I couldn’t afford to pay.

So don’t blame your average online or offline retailer for the cost of games. They have to make money too otherwise they may as well become homeless shelters. They aren’t like supermarkets, putting the squeeze on suppliers to cut costs; it just doesn’t work like that.

That brings me back to the original question; why are video games too expensive? To answer that I’ll look into what happens before the game is shipped off by stork to millions of proud owners around the world.

That’s in the next article; "Are Gaming Companies Holding a Gun to Your Head?" (A rough working title!) Where I pinpoint who exactly is to blame for the excessive costs of gaming. You’ll be surprised.

I have two decades experience as a video games reviewer and have had more consoles than I care to remember the latest being the PS3, Wii and Xbox 360. My travels have taken me many memorable places in life but it is video games that intrigues me most.

I am currently exploring the phenomenon of Homebrew games and copied games. As well as archives of all my articles you will find a review of HomeBreWii, the software for playing back-up and homebrew games on the Wii here

Review of HomebreWare
Review of HomebreWare