Supply
Demand
Being a consumer product means pricing depends on these two factors above all else. You don't need a crash course on the economy to understand the relationship between buyer and seller, it applies to anything you buy from a store.
Video games fall under entertainment media and can be compared to movies or music that distribute both physical and digital media (alongside streaming).
Now breakdown what these values look like:
SUPPLY
3M+
Switch 2s Available at Launch
Unlike previous console launches, Nintendo prepared for big sales.
57%
Game Key Card Releases
More production control over physical games.
17
AAA Launch Titles
Most Switch 2 titles are ports that were available last generation.
18M
Consoles Produced Yearly
Sustains the supply available all year.
DEMAND
152M
Switch 1 Owners
Previous gen users are the most likely to adopt a sequel console.
-31%
Revenue for 2024
Momentum is being lost going into Switch 2's launch.
24M
Launch Trailer Views
Audience engagement shows initial excitement for the product.
10
Award Nominations in 2024
Establishes quality and audience reception for recent titles.
Data Summary
Switch 2 faced several instances of pre-orders selling out or being delayed before launch suggesting supply is limited. Based on record breaking initial sales numbers it's safe to assume Switch 2 was in high demand.
Low supply and high demand means a higher price is expected...but this is not the full story.
Deceptive Pre-Orders
Shortly after going live, it was announced that pre-orders through MyNintendo would potentially face delays "due to high demand". News broke that prices may go up for Nintendo products in the US due to tariffs making imported consoles and accessories more expensive. Despite the on-going controversy involving pricing, focus was put on Switch 2 being difficult to obtain and that this may be the cheapest price to buy at. Online storefronts for Walmart, Best Buy, and Target faced shutdowns due to high traffic (which is expected for big releases).
Release week would publish claims that Switch 2 is the fastest selling console of all time, but this has to do with how much stock is available, not the demand. For example multiple stores reported having Switch 2 consoles available for purchase at launch without a pre-order which means the console was not sold out or limited to reserved units. By falsely limiting initial console requests, consumers were scared into believing the boycott failed and that supply was more scarce than it truly was.
MISSING STOCK
Pre-orders completely sell out.
Abundant stock is available.
LESS THAN 2 MONTHS
1.8 MILLION
5.4 MILLION
It is very convenient that pre-orders seemed to fill up despite numbers claiming that Switch 2 had record breaking consoles available. If the demand was truly there, the console would be difficult to find in stores even now.
Explaining the nuance behind
Inflation
Time is Expensive
The cost of living has gone up all over the world which means almost every product has seen price increases over the last decade. Major cost factors like rent and groceries has seen the largest increase, outpacing the efforts to raise minimum wage. This matters to video games because entertainment is becoming a luxury if it isn't accessible to lower class incomes. Furthermore the time we spend is more valuable than ever when 40 hour work weeks are necessary, meaning 40+ hour video games effectively cost us more.
"Prices Used to be Even Higher!"
No, we never normalized $80 games in the 90's because the consumer base has tripled since then, bringing in more money per title. Video games were not mainstream yet and the transition to digital media saved on costs associated with producing cartridges or discs. Games changing to 3D development would cut down on development costs in bigger games with access to reusable models and engines alongside lower barriers to entry.
Video games are more profitable than ever at just $60.
Online propaganda using higher Canadian prices out of context
Calculated Profit
$139.5 Mil
Despite budgets expanding by over 100x video games are increasing in profits thanks to the much larger audience.
Calculated Profit
$168 Mil
The Advent of DLC
Games did not have the ability to update themselves or add additional content outside of arcade revisions and cartridge add-ons. The modern gaming landscape is now full of games launching with paid downloadable content (DLC) that can sometimes surpass the price of the base game. By purposely withholding content to be monetized post launch, new games using these systems cost much more than $60.
Profitability soars when even used games can generate passive income.
Bayonetta
Platinum Games | 2009
$20
90%
Crash Team Racing: Nitro-Fueled
Beenox | 2019
$40
83%
Won Best Racing/Sports Game 2019
Won Game of the Year 2010
Sly Cooper and the Thievius Racoonus
Sucker Punch Productions | 2002
$20
86%
Outstanding Achievement in Art Direction 2002
Older Games Worth Less?
To justify a jump to $80 price tags, we must compare to what we were being offered at $60, $40, or even $20 before. At what point did games jump in quality or content to substantiate shifting the entire market so that "greater" games can be produced? Graphics have largely stagnated since the 7th generation of consoles (Xbox 360, PS3) where HDMI was standardized and processing power no longer was a barrier to new genres. Nintendo proved lower power wasn't stopping the Wii, 3DS, or Wii U from producing high quality games at lower prices through Nintendo Selects.
Older games receiving price cuts was never about diminishing their quality, its about boosting sales once initial excitement dies down. Plenty of people want to experience great games but are willing to wait for a sale or bundle that offers better value. Remasters and remakes prove that an original game concept that is 1-2 decades old brings enough sales to warrant additional development time to port to a new console generation.
The Loss of Gimmicks
Just three generations ago we saw the peak of games bringing value through their unique peripherals or capabilities within a specific console's hardware. You were paying for a special play experience that could not be replicated on other consoles or emulators without third party adapters.
By homogenizing consoles we are no longer getting unique experiences through our choice of hardware. Portability and mouse controls are hardly gimmicks when gamers have access to both on a variety of platforms. Not to mention the lack of titles currently supporting or being developed with these in mind.
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