Former Playstation Head Agrees that Rising Game Prices Were Inevitable

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An interview with Shuhei Yoshida, former president of PlayStation (english version)

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PSI: Speaking of the Switch 2, we've seen that Nintendo will be raising the price of its games, just as PlayStation did in 2020. What do you think of this decision, and do you think it will make it easier for other publishers such as Rockstar Games to do the same, or even go further?


Shuhei Yoshida: That's an interesting question. I think it was going to happen sooner or later, maybe not from Nintendo, but it was going to happen eventually. We live in contrasting times, where inflation is real and significant, but people expect games that are ever more ambitious and therefore expensive to develop to cost the same. It's an impossible equation.


Everything in video games today is more advanced and more technologically demanding than ever before, and therefore requires more resources. Each publisher or manufacturer sets the price of its games, of course, but in the end the heart of the matter lies in production costs. And that's why industry actors are so keen to diversify their revenues, in order to continue producing the AAA games that the public buys before anything else. Basically, the proliferation of remasters and remakes doesn't really stem from any kind of nostalgia or a desire to bring games up to date, but is a kind of "easy" solution to bring in profits that ultimately help finance new games. The same goes for PC ports. I'm not particularly bothered by this, because these ports, remakes and remasters are mostly made by support studios like Nixxes Software, so the studios developing the new games are relieved of the burden.
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So I don't know if Rockstar will jump at the chance to set the price of GTA 6 at 90 euros or more, to speak with your currency, but the situation is this. And we could even add subscription platforms and games as a service, which, while providing huge revenues in their own right, also help to finance AAA down the line.
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Magister said:
Tales about inflation again. Nobody gives a shit about decreased buying power. Industry crash incoming.
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This.

I understand that the cost of development is inflated now. But the amount of users has also increased exponentially which each of console generation. The none-gamer finally started averaging more than one game per console and now we'll make sure that they don't by increasing the pricing.

Just looking at something like Assassins Creed. It's a full priced game with an ingame store. They sell expansions, costumes, cheats etc. They're trying to get your money in anyway they can (which is honestly fine), but they're games don't change much. It's more or less a reskinned map with new voices. If this type of game requires such a massive investment from both themselves and their consumers they're fucked either way.

But to me it's quite obvious that we are trying to have the same revenue increase year over year. But at the same time we are at a point where the install base won't keep increasing at the same pace, since gaming exists at level now where there is no clear group to chase next. And since they had no clear direction in terms of new customers they started chasing groups that clearly can't carry the cost of these games, and they can't chase that market without alienating their previous customers.

This isn't exactly a gaming specific issue either. The revenue increase year over year is still the target everywhere. They may have lower goals due to the fact that the buying power of the average consumer has gone down the shitter. But it's all just a snake eating its own tail at this point.
 
Everything in video games today is more advanced and more technologically demanding than ever before, and therefore requires more resources.
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Ya i call b.s on this statement when it comes to nintendo because there's absolutely 0 about mario kart world that looked technologically demanding. Nothing about that game looked like it costed nintendo alot of money to make and develop at all. Nintendo raised the price to 80 dollars because they knew they could get away with it.


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MonkD said:
I understand that the cost of development is inflated now. But the amount of users has also increased exponentially which each of console generation.
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Not to mention game companies found a way to pile extra costs on the end uer - early access, DLC, limited editions. People forget game companies are reporting RECORD profits. Again, they are making FUCKTON of money as is.
This is all about eternal growth and unlimited greed.
 
It's painfully clear how many people here don't invest. Companies need to provide returns to their investors. Investors care about rates of return, not just dollar values. Companies have to continue to deliver or eventually investment dries out. Even us little guys with our 401ks or IRAs are looking for returns.
 
I agree that these "heads" are a bunch of imbeciles and I hope the big AAA companies crash and burn and the smaller ones that push creativity and fun at a good price thrive and replace them.
 
TKOFromTokyo said:
It's painfully clear how many people here don't invest. Companies need to provide returns to their investors. Investors care about rates of return, not just dollar values. Companies have to continue to deliver or eventually investment dries out. Even us little guys with our 401ks or IRAs are looking for returns.
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That's a short sighted way to look at long term profits with game companies in particular, and most companies really, unless you are a day trader.

The short term mentality led to companies like Boeing and Intel to where they are now days.

Anyways, it doesn't matter if investors want to see revenue go up. Contracting customer purchasing power, upcoming recession and inflation outpacing salaries, this is a very bold bet by major corpos. Something is going to give out.

You are already kind of seeing this already with younger generations not being that much into modern console gaming. Big part of that is cost and competition with other forms of entertainment.
 
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StereoVsn said:
That's a short sighted way to look at long term profits with game companies in particular, and most companies really, unless you are a day trader.

The short term mentality led to companies like Boeing and Intel to where they are now days.

Anyways, it doesn't matter if investors want to see revenue go up. Contracting customer purchasing power, upcoming recession and inflation outpacing salaries, this is a very bold bet by major corpos. Something is going to give out.

You are already kind of seeing this already with younger generations not being that much into modern console gaming. Big part of that is cost and competition with other forms of entertainment.
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No, I'm not talking about short term returns. You have to have sustainable growth. I don't disagree that you have to be careful not to set a cliff, but Boeing isn't a good comparison. The company cut costs to increase margin and created serious and dangerous product flaws.
 
Cyberpunkd said:
Not to mention game companies found a way to pile extra costs on the end uer - early access, DLC, limited editions. People forget game companies are reporting RECORD profits. Again, they are making FUCKTON of money as is.
This is all about eternal growth and unlimited greed.
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Ubisoft has been at forefront of this for a while. Will be interesting to see how how their latest change will play out for them.
 
They can increase prices as much as they want, I'm still only buying the games when they are under 20€.
If they never go under that price (some publishers seem to refuse to lower prices more than 50€, even on sales) then I'll simply not play them. There are a lot of other games to play.
 
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Sebastian1295 said:
Ya i call b.s on this statement when it comes to nintendo because there's absolutely 0 about mario kart world that looked technologically demanding. Nothing about that game looked like it costed nintendo alot of money to make and develop at all. Nintendo raised the price to 80 dollars because they knew they could get away with it.
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It's an odd statement to make. Because the engines and tools are also getting more advanced(and user friendly).

Looking at the UE5 ports recently it seems like a rather easy to just repaint for your old games and make them look as good as anything new released today. And I bet we can expect even easier porting and development based on upcoming engines and then more with the help of AI.
 
MonkD said:
It's an odd statement to make. Because the engines and tools are also getting more advanced(and user friendly).

Looking at the UE5 ports recently it seems like a rather easy to just repaint for your old games and make them look as good as anything new released today. And I bet we can expect even easier porting and development based on upcoming engines and then more with the help of AI.
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I feel like yoshida has been making alot of odd statements since he left playstation. I agree with you in that engines have become much more user friendly than the old days and the tools that devs have to work with are much more user friendly and easy to grasp. I feel like development costs for games has risen primarily due to poor management during the development of said games which leads to over inflated budgets because of a waste of funds. Add to that the price of some of these development studio buildings and rent on these buildings and u get out of control budgets. I mean a game like claire expedition 33 didn't have a huge budget it seems and it blows away alot of these games with much higher budgets so something isn't adding up.
 
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The AAA sector is legit offsetting its own mistakes onto the consumers at this point. These ridiculous budgets are of their own making. They've substituted smart decisions with staggeringly high team counts to bruteforce success. Its going to break them at some point.
 
Topher said:
This is about maintaining profit growth for the sake of stock holders. Nothing more.
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Even if you're a private company you'll always seek to grow margins in favourable conditions (while maintaining them in adverse economic environments).

It's not just for investors, it means you can have more cashflow stowed away for a rainy day which improves the sustainability of the business. It also means you can gain access to more debt in a scenario where you might want to grow the business.

Maintaining/growing margin often means the executives also get to maintain/grow their take-home, but that doesn't necessarily apply to every business.

Yes consumers often get shafted, but margin growth and maintenance exists to improve the financial health of businesses and make sure the people that run them get paid. If as a consumer you don't want to help improve the health of these businesses and don't give a shit if they go away then it's simple, don't pay the higher prices.
 
Rising costs are not only down to poor management, it's also down to successive governments firing up the money printing machines to cover for their mistakes in running the economy and creating massive worldwide inflation as a result.

So on one side you have a massively deflationary environment for game sales (there's more games coming out and staying in the ecosystems than ever before), but also rising costs.

That's a lethal combo for any business.
 
No they aren't. Stop makimg 60+ open world games with useless dialog, quests and cut scenes and you will see that games will cost 70% less and will take a fraction of the time to develop.
 
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GHG said:
Even if you're a private company you'll always seek to grow margins in favourable conditions (while maintaining them in adverse economic environments).

It's not just for investors, it means you can have more cashflow stowed away for a rainy day which improves the sustainability of the business. It also means you can gain access to more debt in a scenario where you might want to grow the business.

Maintaining/growing margin often means the executives also get to maintain/grow their take-home, but that doesn't necessarily apply to every business.

Yes consumers often get shafted, but margin growth and maintenance exists to improve the financial health of businesses and make sure the people that run them get paid. If as a consumer you don't want to help improve the health of these businesses and don't give a shit if they go away then it's simple, don't pay the higher prices.
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Yeah, but I'm just talking about stock driven big corporations. Same corporations who will layoff hundreds or thousands to appease investors. I get what you are saying, but these are not companies at risk here. What I see are companies that are trying to take advantage of the current political/economic situation to justify game price hikes. I'm not saying investors and stocks are evil. I think these executives are just conditioned to having to beat prior quarter growth and their employees and consumers have become more of a secondary concern.
 
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TKOFromTokyo said:
No, I'm not talking about short term returns. You have to have sustainable growth. I don't disagree that you have to be careful not to set a cliff, but Boeing isn't a good comparison. The company cut costs to increase margin and created serious and dangerous product flaws.
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Both of these companies focused on near term stock market returns. Hence the results. There are numerous similar examples of short term thinking.

Console makers jacking up prices on hardware coupled with rising prices of games is playing with fire by reducing future market size. This is especially so considering falling purchase power of their customers and plethora of other entertainment as well as available games reaching decades back.
 
Topher said:
Yeah, but I'm just talking about stock driven big corporations. Same corporations who will layoff hundreds or thousands to appease investors. I get what you are saying, but these are not companies at risk here. What I see are companies that are trying to take advantage of the current political/economic situation to justify game price hikes. I'm not saying investors and stocks are evil. I think these executives are just conditioned to having to beat prior quarter growth and their employees and consumers have become more of a secondary concern.
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Most companies/businesses with pricing power are not those who are at any kind of risk.
 
StereoVsn said:
Both of these companies focused on near term stock market returns. Hence the results. There are numerous similar examples of short term thinking.

Console makers jacking up prices on hardware coupled with rising prices of games is playing with fire by reducing future market size. This is especially so considering falling purchase power of their customers and plethora of other entertainment as well as available games reaching decades back.
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Totally disagree Boeing was led by a finance guy who had no appreciation for the product and engineering side.

Regardless, I do think the market will show less demand if they don't see the value of the increases. Personally, I still think that the value is there compared to other ways that I can spend money on entertainment. I was at a Cubs game two Sundays ago and a Bud Light was $15. I bought two cheeseburgers, a side of fries and 3 bottle waters for $60+. That's on top of the tickets.
 
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It's still just retard nonsense "prices have to go up cuz game expensive"

Uhh... How about don't have such terrible game development pipelines? Having 400 people at your studio isn't productive, it's redundant, having a whole ass 'ethics department' is a massive waste of money to appease the worst people who don't even play games. It also a stupid argument that always ignores all the obvious places that have made games 'cheaper' such as the standardization across industry leading to less on the job training, and also far more ease of reusing assests across projects. Unity and other premade engines cutting out large amounts of pre-production work should developers choose them. The new trend of outsourcing labor to cheaper studios thanks to the internet, hell thanks to the internet the 'dev vacations' where they go and 'get inspiration' and photos from places aren't even nessisary anymore lol. There are also countless free/open-source assets. And of course, the elephant in the room, micro transactions/dlcs being this behemoth of a new income pipeline. And those are just a few of the obvious places of the top of my head.
 
TKOFromTokyo said:
Totally disagree Boeing was led by a finance guy who had no appreciation for the product and engineering side.

Regardless, I do think the market will show less demand if they don't see the value of the increases. Personally, I still think that the value is there compared to other ways that I can spend money on entertainment. I was at a Cubs game two Sundays ago and a Bud Light was $15. I bought two cheeseburgers, a side of fries and 3 bottle waters for $60+. That's on top of the tickets.
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Yes, I wonder who leads Nintendo or Sony now days. Or who manages say EA. Or look at Ubisoft and complete mismanagement and creative spirit.
 
On paper it makes sense. Inflation is real and production costs seem to keep going up so prices will be affected.
But I do think a big chunk of the AAA market should take a serious look at why their budgets keep increasing, and if a continued chase of ever increasing production values even makes sense in the face of diminishing returns and lower profit margins.

I mean...they can increase the price all they want. As long as people keep buying the games it's going to work out for them, but eventually they'll just price out a big enough chunk of the market that they are going to see their sales drop, and they are going to loose even more of their market share to F2P games.
 
Shu's a big corporate guy his entire career.

So in his head all he understands are big budgets, big teams, and the company is so big it can always absorb more budget and push it onto consumers as the big ones can always do that.

Sonys pricing and finance teams are going to be bigger than some entire small studios.
 
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If game publishers would quit making bombs catering to groups that don't game, they wouldn't need to do anything.
 
Heisenberg007 said:
Maybe companies should focus on cutting their costs first?

Why have useless DEI departments and pay millions in DEI consultancy fees? Games can be produced in much less.
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Is their any of "consult" fees you guys would like to cut? Because it's complete bullshit that only the DEI is pointed out without having real knowledge of what they are adding to the company.
 
But the internet told me this was all Nintendo's fault and had it not been for Nintendo, then prices would have remained the same indefinitely. 🤔
 
Gamer_By_Proxy said:
Expedition 33 proves we are not the problem, they are for spending $300 million on $70 games. Cut out the bloat and modern day pandering.
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Yep, those devs just shit all over the giant AAA studios. Re-invented the wheel on turn based (never seen one with a parry system like that ever) and said "Here...It's $50..enjoy it"
 
Unsustainable, bring back smaller games, smaller development times, smaller teams and smaller prices. A dev team shouldn't take 5/6 years to put a game out, that's fucking absurd.

I'll take PS2 graphics with PS2 development times 100x over whatever is happening today.

FF7 released in 1997... 2 years later FF8 was out.
MGS 2 released in 2001... 3 years later MGS 3 was out
Uncharted is released in 2007... 2 years later Uncharted 2 is released
etc.

Can we go back to this please? Much better games than anything released recently and taking 5,6,7 years to produce
 
Yoshida and the hot takes lately.

He's right though. Nintendo did nothing wrong and was wrongly maligned. Microsoft proved it with their price increases.

Sony also got maligned, remember how yall acted with PS5 Pro? Now the 2tb XSX actually costs more than the PS5 Pro in the us. That is INSANITY. Someone within MS must want the hardware sales to stop, but no, I must not think that because of this:

Hanlon's razor is a saying that reads: "Never attribute to malice that which is adequately explained by stupidity."
 
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Charge us more and still have a ton of microtransactions

How about these studios downsize and stop being so bloated
 
Setsuna Mudou said:
Unsustainable, bring back smaller games, smaller development times, smaller teams and smaller prices. A dev team shouldn't take 5/6 years to put a game out, that's fucking absurd.

I'll take PS2 graphics with PS2 development times 100x over whatever is happening today.

FF7 released in 1997... 2 years later FF8 was out.
MGS 2 released in 2001... 3 years later MGS 3 was out
Uncharted is released in 2007... 2 years later Uncharted 2 is released
etc.

Can we go back to this please? Much better games than anything released recently and taking 5,6,7 years to produce
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Most people on consoles want high end AAA graphics though. That's the point of buying the $700 PS5 Pro.
 
Here's the thing, maybe it was inevitable, but it doesn't mean it will work. I'm not saying it WON'T work, but there's a non zero chance that the higher prices causes sales to lag. I feel like these talks always assume it's a foregone conclusion that the consumer will go along and keep buying the product.
 
TKOFromTokyo said:
No, I'm not talking about short term returns. You have to have sustainable growth. I don't disagree that you have to be careful not to set a cliff, but Boeing isn't a good comparison. The company cut costs to increase margin and created serious and dangerous product flaws.
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How can you praise the efforts to increase margin in one thread and demonize it here?

Whatever makes the money flow without getting caught out by the public media I guess. Did you sell your stocks in Boeing when the first engine fell of a 737?

"The spice must flow"
Where is our Leto Atreides II?
 
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