The Pricing Surprise
Nintendo’s highly anticipated game, “The Legend of Zelda: Tears of the Kingdom,” is set to make its debut on the Switch this month. However, what caught many fans off guard was the news that the game would be priced at $70. This price increase compared to its predecessor raises questions about the future pricing strategy for Nintendo games. It seems that Sony, Microsoft, and third-party publishers have all raised their game prices in recent years. But Nintendo aims to clarify this situation by stating that the $70 price tag for “Tears of the Kingdom” is not a fixed standard. According to a spokesperson for the company, Nintendo determines the suggested retail price for its products on a case-by-case basis[^1^].
Insights into the Price Shift
To gain a deeper understanding of this pricing shift, I reached out to Omdia Principal Analyst George Jijiashvili. He shed light on the factors behind the rising game prices and how “Tears of the Kingdom” exemplifies Nintendo’s flexible approach to pricing. It seems that Nintendo fans are starting to experience the impact of inflation, albeit on a case-by-case basis. Jijiashvili explains that the price increase is a result of the game industry’s overall inflationary pressure. Over the past decade, AAA games have become increasingly expensive to develop, and the cost of production has risen significantly. Meanwhile, game prices remained stagnant at $60, leading to a decline in real terms. If game prices had kept up with inflation since 1990, they would now be over $90. In light of these challenges, it’s becoming difficult for publishers to avoid passing on the extra costs to consumers[^2^].
Not Every Game Will Bear the $70 Price Tag
Nintendo has clarified that not all of its first-party games will be priced at $70. For instance, the upcoming game “Pikmin 4” is already available for pre-order at $60, following the release of “Tears of the Kingdom.” However, the $70 price point for “Tears of the Kingdom” suggests that Nintendo may consider raising prices for its most highly anticipated titles. When asked why they chose this particular game to introduce the price change, a Nintendo spokesperson simply stated that the company determines the retail price on a case-by-case basis. While this decision may seem surprising, it makes sense for Nintendo to ask for a little more for a game that is expected to be one of the biggest releases of 2023[^3^].
The Importance of Inflation
To fully understand Nintendo’s decision, we must consider the global game industry and the world economy. For many years, consumers grew accustomed to AAA games being priced at $60. However, with the advent of the PlayStation 5 and Xbox Series X, this industry standard began to change. Publisher 2K was among the first to announce a price increase, followed by other major players like EA, Sony, and Microsoft. This shift reflects the inflationary pressures faced by game publishers, as George Jijiashvili explains. The cost of developing AAA games has skyrocketed, and additional factors like rising salaries and tools expenses further contribute to the financial strain on publishers. Adjusting for inflation, the current game prices are significantly lower than what they should be. Therefore, it becomes challenging for publishers to avoid passing on these extra costs to consumers[^4^].
As Nintendo embarks on this pricing evolution for its games, the company aims to strike a balance between meeting financial demands and providing a compelling gaming experience. While the $70 price tag may not become the standard for all major Nintendo releases, it highlights the need for the industry to adapt to the changing dynamics of game development and the economy. Nintendo remains committed to being flexible in its pricing strategies, ensuring that gamers continue to enjoy their favorite titles at a reasonable cost[^5^].
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[^1^]: Source: Digital Trends
[^2^]: Source: Digital Trends
[^3^]: Source: Digital Trends
[^4^]: Source: Digital Trends
[^5^]: Source: Digital Trends