The Recent Price Increases For Games Are Likely Coming From Publishers

The recent surge in video game prices isn't primarily due to Microsoft or Nintendo, but rather a desperate financial maneuver by struggling publishers. Massive layoffs across the gaming industry, including Electronic Arts' recent announcement of 300 job cuts (partially from a cancelled Titanfall title), highlight the precarious financial state of many publishers.

This crisis stems from a decade of risky investments. Publishers secured significant external funding for large-scale AAA game projects, many of which underperformed commercially. Now, they face the daunting task of repaying these investors. This debt is the driving force behind the relentless layoffs; publishers need capital to settle their obligations.

While increased game development costs are cited as justification for price hikes (primarily by Microsoft), the reality is more complex. With development teams significantly reduced due to layoffs, these "rising costs" likely represent debt repayment to investors misled by overly optimistic AAA game projections.

Although inflation is mentioned as a contributing factor, it's unlikely to be the primary cause. While game prices have lagged behind inflation, this is a long-standing issue, and its simultaneous resolution with widespread layoffs is highly suspicious.

Directing anger towards Nintendo and Microsoft is unproductive. Platform holders, who typically receive a 30% cut of sales, benefit far less from price increases than the publishers themselves, who are deeply in debt.

To effectively address the issue, consumers should direct their complaints regarding price increases to the publishers directly, as they are the source of the problem.

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