Is this what gaming has come to?

Cartridges haven't been the preferred distribution system for games for a very long time. The PS1 was introduced in 1994, and the last game that was released for the N64 was in 2002 - 13 years ago, and the fact that game prices remain fixed around the same point they were then is what matters. Based on CPI, a game that cost $59 in 1994 would cost $94 today adjusting for inflation. To make up for that loss of more than 50% of inflation adjusted price, they have driven down the costs of distribution to all but negligible, through lower value brick and mortar items and through digital distribution.

Yes, the market for games has grown tremendously - somewhere in the range of four to five times over since 2002 (1 2). A large part of that growth has come from the increased production value of games (as a function of the massively increased budgets), and by the expanded marketing (1), both of which erode the profits of each game sold. As more people are paying for games, they are able to spread the cost of development across these larger sales, maintaining similar profit margins across their portfolios of games.

Which brings up the other issue - distribution companies launch multiple titles in a given year, and not all of them will be successful. EA may make a killing on BF4, while losing a ton on Titanfall. A video game (as with any media product) carries a risk that it might not be successful, and if a company bets its entire future on a single game, they won't be around very long.

If there were companies making "a few hundred percent profit" consistently on every game they produced, there would be a lot more companies entering the market, but that's not the nature of the market.

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