Breakdown of Why Digital Games Cost $70, the Same as the Physical Disc Version?

Posted on Aug 14 2021 - 3:03pm by Gaf Hussain

You might expect the cost of a non-physical game to cost a lot less than the digital version. There is no need for production of an item or transport costs, so why do publishers charge the same?

All games discs are printed and manufactured by the console makers. Sony and Microsoft print all of these and they cost roughly $1.50 to make. Sony then makes a royalty on a $60 game of $12 (20%). Meaning after the costs of making the disc Sony is left with $10.50.

The retailer then takes a cut of $12 to sell the game in a store. leaving the developer $36 for a $60 game

For a digital copy of the same $60 game is $18, AKA 30% which benefits the developer/publisher with $42 instead of $36.

The breakdown for a $70 DISC game is:

  • $1.50 for disc manufacture (at Console manufacturers expense)
  • $14 (20%) Console manufacturers royalty
  • $14 (20%) retailers cut
  • $70 – $28 = $42 to developer

The breakdown for a $70 digital game is:

  • $21 (30%) Console manufacturers royalty
  • $70 – $21 = $49 to developer

The main reason the cost has gone up is mostly due to if the customer is willing to spend that much. It seems like most people are paying up so the pattern will continue. It is all supply and demand. If you don’t pay that, they will be forced to lower it.

Price drops happen sooner from official retailers than ever, and the second hand market has bumped up substantially., meaning less and less people are buying it directly from the developers. Simply waiting a week will allow you buy the game at the usual price.