As game developers, we all know the thrill of creating something new and exciting. But what about the cost? Specifically, what is the opportunity cost of purchasing a new video game? In this article, we will explore the various factors that contribute to this cost and why it’s important for game developers to understand it.
Opportunity Cost Definition:
Before we dive into the world of gaming, let’s first define opportunity cost. Simply put, opportunity cost is the cost of an alternative or next best option that is given up when a decision is made. In other words, it’s the value of what you could have had if you didn’t make a particular choice.
1. Development Time:
Development time is a crucial factor when it comes to opportunity cost. When game developers purchase a new video game, they are essentially giving up the opportunity to invest that same amount of time in their own project. This can have a significant impact on the success and revenue potential of their work.
2. Market Trends:
Market trends can also impact the opportunity cost of purchasing a new video game. Game developers must stay current with market trends in order to create successful games. If a developer purchases a new video game without considering how it fits into these trends, they may be wasting their time and money.
3. Budget Constraints:
Budget constraints can also impact the opportunity cost of purchasing a new video game. Game developers must carefully consider their budget when making decisions about what to purchase or invest in. If they spend too much money on non-essential purchases like new video games, they may not have the funds necessary to invest in their own game development projects.
Real-life Examples:
Now that we’ve explored some of the factors that contribute to the opportunity cost of purchasing a new video game let’s look at some real-life examples to illustrate these points.
1. Epic Games:
Epic Games, the creators of Fortnite, is a great example of how understanding opportunity cost can lead to success in the gaming industry. In 2018, Epic Games decided to invest in their own game development project, Unreal Engine 5, instead of purchasing new video game consoles. This decision paid off as Unreal Engine 5 has become one of the most popular and successful game engines on the market.
2. Nintendo:
Nintendo is another great example of how understanding opportunity cost can impact the success of a video game company.
