Entertainment Costs per Hour

by Jon on June 18, 2010

One of the reasons games are on an upward trend is that the consumer cost per hour is such a high value–games, particularly subscription and virtual-goods social games–are a lot less expensive than many other types of entertainment. Here’s a breakdown:

  • Borrowing a book from library: free (taxpayer supported)
  • Playing a freemium/social game: free to pennies/hour
  • Cable Television ($71/mo, 153 hours/person/mo., 2.54 people/household):   $0.18/hour
  • Playing World of Warcraft 10 hours per week: $0.35/hour
  • Playing Call of Duty for 30 hours ($60 retail): $2/hour
  • Seeing a 2-hour movie for $7.95: $3.98/hour per person
  • Upper Bleachers Red Sox ticket ($12) for a 3-hour game: $4.00/hour per person
  • Average US Family Vacation (AAA data: $250 per day): $10.41/hour
  • 2-hour Broadway show: $50-$150 per hour

It’s hard to beat the cost per hour of games, which is one of the reasons games are growing in popularity: they’re cost-competitive with television while being far more immersive, social and engaging.  And yes, the 153 hours/month is the average number of hours watched per month for people in the United States — gamers, as a group, probably spend far less time in front of the television.

One thing the above chart excludes is the cost of hardware, but you’d need to amortize that across all of your uses.  For most people, this will come down to pennies per hour for computer usage (likewise, the television usage doesn’t include the cost of the TV or home theater).  Similarly, I didn’t include energy and transportation costs.  For a computer game, the energy costs are going to be minimal (pennies per hour).  For some of the types of entertainment, the energy costs could be rather substantial–driving to a movie could easily drive up the cost of seeing the movie by double (or more!), if we use the IRS’s rate of $0.50 per mile for fully-loaded automobile transportation costs.

Sources for Data Used Above

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Ef RodriguezNo Gravatar June 18, 2010 at 3:46 pm

This is fantastic. Is this original research or did you pull from a source?

It never occurred to me that playing WoW is essentially a $0.35/hour investment, which is fairly negligible (financially) though the derived value is off the charts (imho).

Love this!

Nicolas WardNo Gravatar June 18, 2010 at 3:53 pm

Heh.. even if I include the full cost of both of my last two computers (which played WoW), monitor, plus all hardware and software upgrades, plus various peripherals, (many of which weren’t even directly relevant to gaming) I’ve played enough WoW that it comes out to about $1.45/hour.

JonNo Gravatar June 18, 2010 at 4:12 pm

@Nicolas: thanks. Good point. I added a little bit regarding hardware, transportation and energy costs to the article.

@Ef: all of the data is based on publicly available information. Clearly, your mileage may vary. If you play WoW for more than 10 hours per week, then it will cost you even less. Just multiply your average monthly hours played by the subscription fee, and you’ll have your cost per hour. 10 hours may be a lot less than what many WoW players play for, and may even be less than the average–there isn’t extremely great data on that, although in 2006 Nick Yee surveyed players and found that the played about 21 hours a week, which would lower the average cost/hour even more (however, I think Nick’s survey might be subject to a bias towards the more hardcore players of MMORPGs).

I’ve updated the original post with a list of sources for everyone’s reference.

Ef RodriguezNo Gravatar June 18, 2010 at 5:11 pm

Awesome. Ten hours is way less than I average, haha. Thanks for the clarification.

I love Nick Yee’s work, actually. I’ve been periodically contributing to a data set/survey he’s compiling about WoW activity over the past few months. Great guy.

Rob HalseyNo Gravatar June 22, 2010 at 9:54 am

Jon … good analysis. Although difficult, would love to see that plotted against utility which I know is subjective … you could probably have a a few different flavors of utility like pure fun, fulfillment, contribution, etc. Not sure how you track that yet, but i’m sure something will pop in the future.

JonNo Gravatar June 28, 2010 at 1:51 pm

@Rob, I don’t know how I could accurately come up with a utility analysis that wouldn’t simply be a reflection of my own biases.

From an economic standpoint, the ‘value’ of anything someone consumes is simply equal to the price they pay for it. However, it might be interest to look at this from the standpoint of social welfare (in the economic sense–not the philosophical sense) which would be the difference between the maximum amount all consumers would be willing to pay for their entertainment, minus the amount they actually pay. My hypothesis would be that there are a large number of people who would be willing to pay more than the $15/month, and the fact that they’re paying less is creating a lot of social welfare.

Comparisons to other types of entertainment highlight some interesting facts: baseball games, for example, give the consumer a lot of options for how they are willing to consume the game. I cited the *cheapest* sets currently available for a Red Sox game, but consumers who are willing to pay more can ‘opt in’ to a pricier seat. Although World of Warcraft and typical AAA games are a one-price-fits-all formula, social games are different: users can play for free (comparable to watching a sports game on broadcast TV) or they can ‘opt in’ to a deeper experience (which costs them more).

It would take a lot of survey data to get to an analysis of economic social welfare generated by all the different forms of entertainment.

doctorslimeNo Gravatar June 29, 2010 at 2:16 pm

You didn’t count the cost of frustration.

Warcraft account hacked, all characters lost my son is sad,
customer service on warcraft is non-exsistant, try to call support
all lines busy all the time, hours lost, automated responses do no good only cause more frustration.

Anyone know anyone who can help me!
junk@doctorslime.com

flashbynightNo Gravatar July 1, 2010 at 8:38 pm

Games are tricky to cost. A console game could go down to $15 on discount and have a 80-hour campaign, costing the player about .18 cents per hour. But then of course, there’s the cost of the console in the first place.

Jason WebbNo Gravatar July 8, 2010 at 7:48 am

Thanks. This is the best information on marketing that I have seen in months of searching.

Regards/-
Jason Webb

Dsp4No Gravatar July 9, 2010 at 7:38 pm

Interesting analysis.
Although I agree videogames aren’t the most expensive things to do to entertain yourself, the TV/videogame comparison is crooked. When you watch TV, you have access to many different entertainment sources. News, TV series, sports, documentaries, etc. WoW is only one game. As soon as you start playing other pay-per-month games, the price quickly goes up as you have to pay for each of them.

JonNo Gravatar July 12, 2010 at 11:18 am

@Dsp4: each game will have its own individual hourly cost. The rates per hour was for WoW *alone*, not the average cost of all games in aggregate. (some might be less, some might be more) Incidentally, the evidence is that very few people play more than one monthly subscription game at a time.

Geoffrey, the SIX STRING cpa™No Gravatar September 17, 2010 at 11:19 am

OK, as a numbers guy by training i want to thank you for this post. It seems I have hard data to back-up my pitch to my wife to reactivate my WoW account! Turned on to this site by Chris Brogan … follow him on Twitter.

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