Day 10: Games and Movies

Something's been bugging me about the value of media. I've discussed how different games have wide variance when it comes to investment yet they all share the same retail price. The same can be applied to movies. That's all well and good but what if we compared apples to oranges?

What's was the highest grossing movie last year? Toy Story 3 made over a billion dollars, followed by Alice in Wonderland which also made over a billion. Now, Toy Story 3 supposedly had a budget of $200 million. I dunno about ticket prices but I'm guessing they're something like $10 a piece.

What was the highest grossing video game last year? Call of Duty: Black Ops made over a billion dollars, highest selling game in the United States ever. Video games like Black Ops retail for $60 and stay on a shelf much longer than a movie stays in circulation. By the time a movie comes out on DVD a video game is still on the shelf but probably half of its original price depending on a variety of factors. Now, I don't know how much money was invested in producing Black Ops but I can guarantee you it's nowhere near $200 million, yet its retail price is at least six times the price as Toy Story 3.

Now, here's where the apples and oranges thing comes in. Money is spent differently on each. Toy Story involves a lot of high paid actors that sell the movie. Black Ops doesn't. Movies can have return customers who want to see the picture several times. Video games don't do to the customer owning a copy of the product from the beginning rather than paying for a viewing. Perhaps the function of arcades is more similar to movies than retail games but that market is all but dead in this country outside of a niche novelty.

Nonetheless, here's my point. Why does a movie that costs $200 million cost just $10 to see when a video game which cost probably no more than $50 million to make cost us $60 to see and own? A new DVD would be ~$20 so lets just add that to a movie viewing cost. It costs $30 to see and own a $200 movie but $60 to own a $50 million game, and most games cost a lot less to produce. It must be the market. There aren't enough potential customers to advertise to so the actual customers need to be charged more in return. If most of us weren't gaming but the investment costs were the same then theoretically video games would have to climb to $100 a piece to stay afloat but if the number of customers doubled then theoretically prices could go to $30 and it'd all be the same. Now, we know that's not going to happen because capitalism doesn't allow prices to fall after they've risen. It's a nice thought though.

In summary, we the customers pay the prices we do as a burden because there aren't enough of us to share the weight. Combine that with the number of annual video game releases steadily climbing, we're being extorted for all we're worth. Be wary, business never has your best interests.