The conventional “rise in development cost” argument doesn’t always add up — here’s why.
When Microsoft released the Xbox 360 on November 22, 2005, it marked the first time that console gamers would be treated to high-definition graphics in all their detailed glory. It also marked the beginning of an era where major game publishers would impose a $10 next-gen tax — $60 per game instead of the usual $50.
Rumblings of a price increase for video games began in 2004 as publishers non-exclusively decided that a $10 price hike would help offset the rise in production costs as more and more money was being spent on big budget games. The move, in theory, would help mitigate the high risk of releasing video games. Microsoft and Sony obliged with the manufacturer’s suggested retail price (MSRP), but interestingly not everyone got on board.