I didn't say artifically high. I said they set the price as high as they think they can get away with without killing unit sales. I am describing exactly how the free market works when you have no manufacturturing and distribution per unit costs. I am describing basic economic theory. There is no supply curve when there is no supply cost apart from the initial development cost i.e. a flat line.
"Artificially" versus normal economic equilibrium was how I understood your first paragraph. If that's not what you meant, scratch whatever ramblings I wrote appropriately.
Though, even if your supply was flat, you'd still need to meet the demand to be optimal, so isn't that the same? It's if the demand was inelastic that publishers could exploit it. Since there's a fierce competition and it's not a vital product, there's no chance of that.
I doubt that the supply is really flat, though. You need at least a basic infrastructure to sell the games, deliver them, provide support, and so on. If the publisher is big enough, it can have its own platform, but otherwise there are fees that are relative to the sales. If you're using IPs or libraries, like a graphics engine (Unity, Unreal, ...), you also have royalties. But I agree that it's more comfortable than physical products.
Where are you getting that video game revenue is decreasing?
I read it in several articles a while ago, but you can pick any statistics or news website. For example
this one or
this one, that I just randomly took from a search. Depending on the source or the country, there was or wasn't a slight recovery in 2023, but 2022 wasn't good at all.
I think I already covered one reason why some companies are struggling i.e. people making woefully shit games that cost a massive amount of money. Making bad games is not new. Making bad games that costs hundreds of millions dollars is and is getting worse - it is not a market problem, it is not knowing what actually makes a good game.
Yeah, it sure doesn't help.
That suicide squad game that cost hundreds of millions of dollars is woeful from all the videos I have watched. A bunch of suits and new age creatives would of thought it the best thing since sliced bread. If they had of actually taken on board feedback from some hardcore gamers they would have known the game would stink well before release and they could have changed direction.
Maybe, maybe not. Getting a relevant feedback requires a game that is already somewhat playable. It's way too late in a project of this scale to change much.
The other reason is poor financial management including paying too much for acquisitions, ranping up staff levels too high during covid etc.
Yes, that's the part I mentioned. From what I understood, those were serious problems.
I am interested to hear what other entertainment industry is doing better though?
The entertainment market in general. Music, video, movies, sports. For example,
here, or
here (for 2023 but I'm sure you can find it for 2022). It's only what I read, though; it's not as if I was following that closely.