LogInThe former manager believes the costs of production are too high these days.
Rockstar Games, GTA VI
Layden believes game prices should have been rising gradually with each new console generation. Instead, he says, the industry banked on expanding the market, assuming that as long as it grew, even without generating profits, it would continue.
"The cost of construction is just way too high. If you're going to spend over $200 million to build a game, your margins are super tight, unless you can expect to sell 25 million units. Unless you're Rockstar, you should not expect to sell 25 million units."
Companies tried to offset skyrocketing development costs by finding additional revenue streams – they kept the base price unchanged. Still, they leaned heavily on DLC, microtransactions, and battle/season passes to cover expenses. This approach worked, but there might be a change.
"They said, 'Okay, what if we maintain the price and then we nickel and dime you with the DLC, microtransactions, battle pass, season pass, whatever you want to call it, and try to make up the excess there?'"
Layden thinks the publishers were worried they would lose players if they introduced an increase. As a result, companies sacrifice part of their operating income and profits to maintain sales volumes.
Now, with budgets of $200–250 million, studios lose the willingness to take risks, meaning $80 games are likely to be sequels or safe copies of existing hits, Layden noted.
He also noted that launching a new IP with such a budget and price point in the current market is an extremely risky venture.
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