Longstanding complaints about the price of video games, alongside unprecedented console price rises, mean gamers may be incentivised to divest from big-budget AAA titles. But financial strain on independent game developers may make typically cheaper modes of gaming feel the crunch as well.
Earlier in the year, Nintendo and Sony announced increases in the prices of their current-gen consoles (the Nintendo Switch 2 and all models of the PS5 respectively), and most recently, all models of XBOX faced another round of hikes, for a total of at least $120 USD higher than last October.
Additional commissions placed on game developers by online stores such as Steam – the most popular PC storefront – can disproportionately impact independent developers, exacerbating the cycle of gamers rejecting titles, thinking its content does not match the price tag.
Steam charges all game developers 30% of a game’s purchase price, which is only reduced if a game earns more than $10 million. This implicitly rewards titles made by developers and studios with more resources.
Andie*, an indie developer in the dating sim genre said: “I don’t reduce game content because ultimately I want my players to be happy, but it does make me consider a higher price for my games.”
Experts say the current moment is not one where gamers are willing to spend as much money on games.
Joost Rietveld, Associate Professor in the Department of Strategy & Entrepreneurship at the UCL School of Management, said: “A lot has changed in the last twenty years that makes recent price increases less palatable to gamers.
“For one, there are now many more competitively priced alternatives, both within gaming and beyond.
“Video games are consumed in a bundle jointly with the platform they are released on. Prices for consoles recently increased, and there and in sum, even though some price increases for video games may be justifiable from a publisher’s perspective, they are a tough pill to swallow for consumers amid a cost-of-living crisis.”
This means the viability of independent games as an alternative is impaired by commissions and tariffs, even when they are seeing more recognition by industry awards.
Just this week, PlayStation announced from 2028 they will no longer produce disks for their games.
With the move to digital growing closer and closer, concerns about digital storefronts seem more relevant than ever, especially when legal action has been taken against Steam’s parent company Valve in the US by game developers claiming an unfair monopoly in the online storefront market means its 30% commission cannot be challenged.
Andie continued: “I’m quite aware of how a game is quite limited in its profitability after all the taxes and revenue share and fees are taken into account.
“Steam’s 30% commission isn’t too bad if taken on its own, but it does become extremely impactful when considering the other fees like VAT and sales tax, that is taken directly from the developer’s side, and not charged on the consumer side.
“Since most of my players are from the USA, I’m also affected by the high withholding tax rate as the USA doesn’t have a double taxation treaty with my country.
“This means that I lose about 60% of revenue even before local taxes are taken into account.”
Valve has been contacted for comment.
*not her real name.
Featured image credit: PacoCity3124, CC BY-SA 4.0 via Wikimedia Commons
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