Former PlayStation US chairman Shawn Layden believes video game prices should have increased with every new console generation to keep up with rising development costs. Layden, who led Sony’s worldwide studios group until leaving the company in 2019, shared his views on game pricing in a recent interview with GamesIndustry.biz.

According to Layden, premium games have cost the same for about 20 years, even though making games costs much more now and inflation has pushed up prices for everything else. He thinks the reason games still cost around $60-70 is simple: fear.

“I think it’s because everyone’s afraid,” Layden said. “No one wants to be the first one to raise the price, because you’re afraid to lose traffic.”

Instead of raising prices, game companies have been cutting into their own profits. Layden pointed out that this approach hurts the bottom line when development budgets keep getting bigger. Layden used an interesting comparison to show how the business has changed. He noted there were more expensive sports cars in company parking lots during the original PlayStation era than during the PS4 days.

“If you’re selling 20 million units at $60 for something that only cost you $10 million to make, that’s different than selling 20 million units at $60 for something that cost you $160 million to make,” he explained.

The math is straightforward – when games cost less to make but sold for the same price, companies made more money per copy sold. Layden believes the gaming industry has reached a crisis point. Companies now need to sell millions and millions of copies just to break even on their huge budgets.

“The cost of construction is just way too high,” he said. “If you’re going to spend over $200 million to build a game, your margins are super tight, unless you can expect to sell 25 million units.”

He warned that unless you’re a company like Rockstar Games, expecting to sell 25 million copies is unrealistic for most developers. Layden’s comments highlight an ongoing challenge in the gaming industry: how to balance rising development costs with what players are willing to pay, while still making enough profit to keep making games.