Why are games so expensive?

Some of the remaining money then goes to cover the cost of building the game, losses from less successful titles (or games that were started and then canned) and all the other costs of being in business. That doesn't leave much for kick-starting the next project, leaving most scrabbling around in search of another contract just to keep the studio alive.

Console mania

If you're creating for consoles, there's even more money involved – which is partly why console games are more expensive than PC ones. Partly? Cynics suggest that because consoles don't really suffer from piracy, they can charge prices that PC owners simply wouldn't stomach.

There may be some truth in that, but console game design really is expensive. You need development kits, which are especially pricey in the early days of new console hardware, and you need to pay the console manufacturer – whether it's Microsoft, Sony or Nintendo – a per-copy royalty, which is around $10 (£6) on each unit manufactured, irrespective of whether they're sold or end up in landfill.

This makes console games a risky bet, especially when a new machine is just getting off the ground. High-profile games that don't sell hundreds of thousands of copies may never make any money, and could be condemned to fester in the budget bin for the rest of eternity.

What about casual games? Small games such as Xbox Live Arcade releases don't have the giant budgets of their bigger brothers, but they can still cost hundreds of thousands of pounds and take forever to break even. Once again, the price you pay doesn't go straight to the creator; the publisher (in this case Microsoft) takes a cut of each sale.

Here, the amount depends on how much involvement Microsoft has, but the figures are reportedly between 35 per cent and 70 per cent, so if the game sells for 800 Microsoft Points – just short of £7 in real money – then the creator gets between £2 and £5 per sale. You need to sell a lot of copies to make any money.

Ah, you're thinking. What about pre-owned games? Everybody got paid first time round, so shops can sell them for pennies and still make money. That's true, but the sheer speed at which people buy, complete and then trade in games means that used titles can be on the shelves within a few days of release – and nobody in their right mind is going to pay full whack for a game if there's a used version going for half the price. For shops, selling used games cheaply would be commercial suicide – especially since people are willing to consider a few quid off a bargain.

Smart shopping

You don't have to pay full whack, though. Waiting until a game is no longer a hot release is always smart – you won't get discounts when demand outstrips supply – and PC versions are always cheaper than console ones. Online is cheaper than the high street, digital is cheaper than boxed, and even the most sought-after games eventually end up in the bargain bins or on eBay.

It's important to keep things in perspective, though. When you buy a CD you're spending a tenner for about an hour of music, while on DVD you're paying £15 for around three hours of amusement. With a game, you're getting hours of single player and potentially months of online multiplayer. Games are certainly expensive, but the good ones still offer exceptional value for money.

Now read 10 Xbox 360 tricks Microsoft doesn't tell you and seven more Xbox 360 secrets Microsoft doesn't tell you.

Prefer PlayStation 3 tricks? Then read 10 PS3 tricks Sony doesn't tell you and 8 more PS3 tricks Sony doesn't tell you.