Are Video Games Really More Expensive?

Video games feel more expensive than ever, but inflation-adjusted analysis shows they have become cheaper over time. Written in August 2022 amid UK inflation near a four-decade high, the analysis asks whether the $69.99 price of new PS5 and Xbox Series games is truly a burden, and whether publishers might raise prices further as production and energy costs climb.

Using TechRaptor's historical console release prices and a US inflation calculator, the analysis finds that nominal prices rose in step with console generations, roughly every five to seven years. Games averaged $49.99 from 1993 to 2001 and $59.99 from 2005 with the Xbox 360 and PS3. Adjusted to 2022 dollars, however, a 1977 Atari 2600 game would cost nearly $200, and a $69.99 game today would have felt like $340 in 1977. Real prices fell by almost 2% per year between 1977 and 2020, and a game would have fallen below $100 in equivalent terms only by 2012. Adjusted for inflation, Atari 2600 games would be four times pricier than today's, Jaguar games twice as costly, and Xbox 360 and PS3 games 50% costlier. The decline flattened from the 1990s onward. A $59.99 game from 2013 would equal $76.30 today, and a $69.99 game from 2020 would equal $80.13, a 14% increase.

Absolute prices also declined between 2018 and 2021, based on Games Sales Data for physical and digital full games on Switch, PS4 and Xbox One, excluding first-party Nintendo titles. Combined average prices fell at a CAGR of -6.4%, while average UK full-time earnings grew at +1.9%. The author attributes part of the drop to more cheap catalogue titles and waning demand for last-generation releases.

Games still feel expensive, the analysis argues, because consumers think in absolute terms and weigh value against factors such as day-one social pressure, record publisher profits, DLC, microtransactions and free-to-play alternatives. Publishers are reluctant to raise MSRP above $69.99 because of an implicit bond with customers, though persistent inflation could force a change. A price rise would be safer at a new console launch than mid-cycle.