The MERLIN game was an early handheld electronic game first released by Parker Brothers in 1978. It was one of the earliest and most popular handheld electronic games, coming out before the Game Boy and other later handhelds. There has been some interest in how much the original MERLIN game cost when it first came out back in 1978. As an early electronic game, it provides a useful data point for comparison to newer handheld systems that came later. Below we will dig into details on the original price and what it would equate to today.
Original Retail Price
The original suggested retail price for MERLIN by Parker Brothers when it launched in 1978 was $49.99. This was quite expensive for a handheld or tabletop electronic game at the time. For comparison, the Atari 2600 home video game console launched just a year earlier in 1977 for $199.99. So the MERLIN was priced at around 25% of the cost of a new home console.
Original retail price | $49.99 |
Adjusted for Inflation
To understand what that $49.99 price tag would equate to today, we need to adjust for inflation. The average annual inflation rate between 1978 and 2023 is approximately 3.88%. Accounting for compound inflation, that means $49.99 in 1978 would have the same buying power as about $215 today.
That is a significant increase from the original price. It illustrates how much more expensive consumer electronics and games have gotten over time accounting for inflation. A modern handheld game system generally costs in the range of $200-$400 now, so the MERLIN was a lower-cost alternative for its time.
1978 price | $49.99 |
2023 equivalent | $215 |
Price Adjusted to Percent of Income
Another way to contextualize the price is to compare it to income levels at the time. In 1978, the median household income in the United States was $15,060 per year. That means the MERLIN game at $49.99 cost approximately 0.33% of the median annual income.
Looking at more recent numbers, the median household income in 2022 was $70,784. If we adjust the original MERLIN price of $49.99 to 2022 income levels based on that 0.33% figure, it would equate to about $234.
So the MERLIN represented a similar portion of income to American households then as a handheld game priced at around $200-$250 would today. This further illustrates that while the MERLIN was expensive for the time, it was reasonably affordable to middle class consumers.
1978 median income | $15,060 |
MERLIN price as % of income | 0.33% |
2022 median income | $70,784 |
Equivalent % of income price | $234 |
Comparison to Other Games
It also helps to look at how the MERLIN was priced compared to other electronic games of the time. A few useful comparisons:
– Simon: Launched in 1978 by Ralph Baer and Howard Morrison. The original suggested retail price was $25.
– Speak & Spell: Introduced in 1978 by Texas Instruments. The original price was $50, very similar to MERLIN.
– Football (Mattel): A handheld single-game device focused on football, launched in 1977. The original MSRP was $25.
So at $49.99, MERLIN was on the more expensive end for handheld electronic games of its day. But it included multiple game modes and had a competitive price point with other early multi-game devices like Speak & Spell. The single-game devices like Football tended to sell for less.
Game | Launch year | MSRP |
MERLIN | 1978 | $49.99 |
Simon | 1978 | $25 |
Speak & Spell | 1978 | $50 |
Football | 1977 | $25 |
Sales Performance
Given the relatively high price point, it is worth looking at the sales performance of the MERLIN game.
The game sold very well initially. It is estimated that about 5 million units were sold during its heyday between 1978 and 1981.
At that volume, MERLIN was one of the best selling handheld electronic games of the early days. Part of the appeal was the novelty of an electronic game in a self-contained handheld device. And the variety of game modes also added replay value.
The sales performance suggests that despite the relatively high price, consumers saw good value in the MERLIN game system considering the technology and entertainment it offered. The sales volume enabled Parker Brothers to sell at a profitable price point.
Estimated sales volume | 5 million units |
Sales period | 1978 – 1981 |
Profit Margins
What profit margins did Parker Brothers achieve on the MERLIN game?
Specific figures are not publicly available. However, typical profit margins on consumer electronics like game systems tend to range from 20% to 40%.
If we assume Parker Brothers achieved profit margins on the higher end around 35-40% for MERLIN, that suggests their manufacturing cost was around $30-35 per unit.
At the original $49.99 MSRP and 35% margin, they would retain around $17 in profit per game sold. With estimated sales of 5 million units, that equates to around $85 million in gross profit on MERLIN hardware sales alone.
This excludes revenue from accessories, marketing, distribution and other associated sales that would add to profits.
Typical profit margin | 35-40% |
Estimated manufacturing cost | $30-$35 per unit |
Profit per unit sold | $17 (at 35% margin) |
Total profit on 5M units | ~$85 million |
Price Changes Over Time
The MERLIN maintained its original $49.99 MSRP into the early 1980s. However, by 1983 the retail price had dropped to $39.99. This reflected decreasing manufacturing costs and the desire to expand the customer base as the technology aged.
Further price drops occurred later in MERLIN’s lifecycle throughout the 1980s. By 1987, retail prices were typically ranging from $15 to $25. Refurbished and used units could be found for under $10.
These price declines followed the normal technology product cycle. As manufacturing costs came down and newer technology entered the market, MERLIN (which was first introduced nearly 10 years earlier) had to reduce pricing to remain competitive.
1983 retail price | $39.99 |
1987 retail price | $15 – $25 |
1987 refurbished price | < $10 |
Conclusion
In summary, the original suggested retail price for the MERLIN game was $49.99 in 1978. Adjusted for inflation, that equates to about $215 in 2022 dollars. Relative to income levels at the time, it represented around 0.33% of median annual income, similar to a $200-$250 game today.
The price point was at the higher end for handheld electronic games when it launched. But the feature variety and strong sales volume enabled Parker Brothers to sell MERLIN profitably at that $49.99 MSRP. Profit margins likely ranged from 35-40%.
Like most technology products, the price declined over time as manufacturing costs dropped and new technology emerged. But the original price provides an interesting view into the early days of handheld electronic gaming. For the novelty offered in its era, MERLIN delivered good value to consumers despite its premium cost.