Buying video games on credit is a bad idea

South African gamers should avoid buying video games on credit or risk paying exorbitant amounts for their purchases over the long term.

While gaming has never been an inexpensive hobby, the current prices of AAA titles at launch have put them out of reach for many, having surpassed the R1,000 mark in recent years.

Although the weakening Rand has played a role in rising game prices, the standard US price for console games also increased from $60 to $70 for the next-generation.

This means that launch titles on the PlayStation 5 – like Marvel’s Spider-Man: Miles Morales and Demon’s Souls – are priced in the range of R1,199 to R1,399.

These escalating costs mean gamers – who already have to deal with huge hardware prices – could be looking for ways to cut down on gaming expenses.

With a much-reduced cost in the short term, choosing to pay off video games on a monthly basis may sound like a good way to save.

Buying on credit

Several major video game retailers – including Takealot, Loot, and BT Games – offer the option of paying for console and PC games on a monthly basis.

This can be done via online payment platform Mobicred – which works in a similar way as an in-store credit account.

Instead of having to pay a large single amount once-off, Mobicred account holders are able to order products online on credit and pay them off over 12 months.

Interest is charged at a personalised annual variable rate which is linked to the Reserve Bank’s repo rate.

For example, purchasing the Deluxe Edition of PlayStation 5 launch title Godfall on BT Games will cost you R1,599 when bought cash.

If you want to buy the game on credit via a Mobicred account at an interest rate of 20%, you’ll pay in 12 instalments of R147 per month for the game itself – totalling R1,764.

Bigger difference than meets the eye

While the R165 difference at first would appear to be negligible, there are other significant costs to take into account.

This total does not include a monthly administration fee of R39.90 – which would bring the amount to R2,242.80 over a year.

This would make the total purchase R643.80 – or around 40% more expensive – than buying on a cash basis.

With lower cost titles this discrepancy grows even further. An R399 title paid over 12 months will run at a total price of R922.80, or 130% higher.

In addition, these calculations do not take into account the once-off initiation fee of R570.

Slap this onto the total price, and several titles will end up costing around three times more than when bought with cash.

Cash versus credit comparison

The table below shows a comparison of the once-off cash and total credit prices for popular games available at BT Games.

The instalments shown are calculated using a 20% annual interest rate.

BT Games – Cash vs credit prices 
Title Cash Instalment total With admin fee Initiation fee included
Assassin’s Creed Valhalla Drakkar Edition (PS4, Xbox One) R1,199 R1,320 R1,798.80 R2,368.80
Borderlands 3 (PS4, Xbox One) R299 R336 R922.80 R1,492.80
Call of Duty: Black Ops Cold War (PS5, Xbox Series X) R1,399 R1,536 R2,014.80 R2,584.80
Control (PS4, Xbox One) R499 R552 R1,030.80 R1,600.80
Demon’s Souls (PS5) R1,299 R1,428 R1,906.80 R2,476.80
Far Cry 6 Ultimate Edition (PS5) R1,999 R2,196 R2,674.80 R3,244.80
Fifa 21 (PS4, Xbox One) R1,199 R1,320 R1,798.80 R2,368.80
Gears Tactics (Xbox One) R1,199 R1,320 R1,798.80 R2,368.80
Ghost Recon Breakpoint (PS4, Xbox One) R499 R552 R1,030.80 R1,600.80
Godfall Deluxe Edition (PS5) R1,599 R1,764 R2,242.80 R2,721.60
Grand Theft Auto V (PS4, Xbox One) R399 R444 R922.80 R1,492.80
Marvel’s Avengers (PS4, Xbox One) R1,099 R1,212 R1,690.80 R2,260.80
Prince of Persia Sands of Time Remastered (PS4, Xbox One) R765 R840 R1,318.80 R1,888.80
Red Dead Redemption II (PS4) R599 R660 R1,138.80 R1,708.80
Spider-Man: Miles Morales (PS5) R1,099 R1,212 R1,690.80 R2,260.80
Star Wars: Jedi Fallen Order (PS4) R1,045 R1,152 R1,630.80 R2,200.80
The Outer Worlds (PS4, Xbox One) R399 R444 R922.80 R1,492.80
Watchdogs: Legion Resistance Edition (PS4, Xbox One) R1,199 R1,320 R1,798.80 R2,368.80
World War Z (PS4, Xbox One) R485 R540 R1,018.80 R1,588.80

Subscriptions and free games

It should be noted that the administration fee is for the entire account, and not each individual game, which means the comparable cost could be spread over multiple titles.

Even so, it is evident that buying games on credit could become an expensive exercise.

Given the relatively short shelf life of most titles and how much time you can spend on a game, it is also not optimal to still be paying months after you’ve put the game down.

If you don’t have the time or means to save for AAA titles before making a purchase, there are several other options to consider.

Granted that you have access to a solid Internet connection, gaming subscriptions offer an attractive alternative to buying games to own.

These services offer large libraries of titles at moderately affordable monthly or annual prices, which you could subscribe to or cancel at any time.

Microsoft’s Xbox Game Pass, for example, is priced at R99 per month and gives members access to more than 150 games from its own development studios and several third-party publishers.

This includes top-tier titles from the Gears, Age of Empires, and Halo franchises.

The EA Play subscription will only set you back R48.50 per month and provides access to a range of Battlefield, Sims, Fifa, and other EA titles.

For PC users in particular, it is also advisable to look out for discounts or free game promotions such as those offered by Epic Games.

Every week, the store allows users to claim a free copy of certain games and keep them forever.

The total collection of free games numbers in the hundred, with recent titles including Ghostbusters: The Video Game Remastered and Blair Witch.

Other major past titles were:

  • Watch Dogs and Watch Dogs 2
  • Remnant: From the Ashes
  • ARK: Survival Evolved
  • Grand Theft Auto V
  • Borderlands: The Handsome Collection
  • Assassin’s Creed: Syndicate

Now read: Steam Halloween sale – Big savings on horror games

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Buying video games on credit is a bad idea