Last I checked we are talking about the game industry and not the diamond industry. The $60 price tag is total fiction in this day and age. Unfortunately, for GS their business model is outdated and the competition is eating their lunch. At the end of the day, consumers are always going to try to find the best deal around.
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GameStop Worried Digital Games Are Too Cheap
- Thread starter Avallon
- Start date
What's a manual?
I agree with your point in general but trying to argue art costs seems negligible when it comes to even smaller releases. Being digital does not mean that there is no need for an art department or something that equates to cover art.
Jeronimo Jones
Member
If I was GameStop, I would be worried too, but I'm not GameStop.
I'm also not a gaming industry economist, so it's not my job to find the right mix of price point/perceived value/costs so that publishers can make millions. Sounds tough, I'm sure they're paid well for it.
I am a consumer who does sometimes make digital purchases, often for reasons including convenience & clutter reduction. I selfishly feel that if digital distribution is preferred or cheaper for publishers (no packaging, discs, shipping, etc.) they should be passing some savings on to consumers if they want it to grow.
I'm also not a gaming industry economist, so it's not my job to find the right mix of price point/perceived value/costs so that publishers can make millions. Sounds tough, I'm sure they're paid well for it.
I am a consumer who does sometimes make digital purchases, often for reasons including convenience & clutter reduction. I selfishly feel that if digital distribution is preferred or cheaper for publishers (no packaging, discs, shipping, etc.) they should be passing some savings on to consumers if they want it to grow.
Triggerhappytel
Member
Move your head office to the UK, Gamestop. This will no longer be a concern.
Lashley
Why does he wear the mask!?
Yep, we get fucked for digital prices.
Triggerhappytel
Member
I agree with you that digital should be cheaper, but all those things you've listed above are negligible costs when you're manufacturing an item in the hundreds of thousands or more.
dead souls
Member
Cars were an objective improvement over horse and buggy, digital gaming isn't over physical copies.
Maintenance
Member
I'm laughing hard over here.
~ Zyzomys ~
Member
I liked how Sony did it in October. Spend $100 on the Playstation Store and get a $15 credit. Plus I was able to buy discounted PSN cards during sales at physical stores. Combining these two things let me get COD:AW Pro Digital Edition for about $75. Publishers' get to keep game prices at a certain level while Sony encourages digital purchases. Everyone is happy.
Cheers
Cheers
GreyOcelot
Member
not if you're cutting out the middleman (gamestop) and production costs. if the margin is the same or better for the publisher, digital games SHOULD be priced lower. this is just gamestop desperately trying to avoid becoming the next blockbuster video
Hamster Plugin
Member
Console games are more expensive than PC games and aren't comparable. That €45-50 figure is for retail PC games. Call of Duty Advanced Warfare for PC is €50 on Finland's biggest online retailer (verkkokauppa) right now. Football Manager 15 is €50 on Steam, €35 on cdon.com. Far Cry 4 is €60 on Steam for regular edition, €45 for Limited Edition on verkkokauppa.
Steam is a constant utter ripoff in the EU region when there's no sale active. Everyone just feels like comparing Steam's sale prices to PSN's normal prices. I'm not saying that PSN isn't bad, it is terrible there too, but acting like Steam is a savior is crazy.
Haloid1177
Banned
This coming from GameStop made me laugh way harder than it should.
Crimson_Fate
Member
Last time I checked, digital console games were always more expensive then their physical counterparts. While you can find some games for $25 at bestbuy the same digital games are still $59.99 at PSN and Amazon, even up to a year after release.
Gamestop looks at steam and that future scares them since they make their money on the resale of console games.
Digital console games are currently too expensive and are not worth purchasing unless you are preordering or buying day one
Gamestop looks at steam and that future scares them since they make their money on the resale of console games.
Digital console games are currently too expensive and are not worth purchasing unless you are preordering or buying day one
That's what I was thinking as well. Once people get used to digital content, many may prefer the convenience of being able to download the game without having to worry if it is in stock. I see it with my own purchases.
Vincent Grayson
Member
I have been hesitant to do this on console because I like being able to trade/sell/lend my games, but I'll admit that Dragon Age and GTA won me over and I grabbed them digitally just to have them available at all times forever.
The massive production so-called "AAAA" ones? Perhaps not, or at least reduced in number. My question though is, why should I care? There isn't a single "AAA" game in my top 10 this year -- the closest is Dark Souls 2, and I'd say that's "AA".
Petrae
Member
While I do think there will be some kind of effect when GameStop inevitably folds, I also firmly believe that the market adapts and moves on without a flagship chain.
The steady move from physical to digital and from brick-and-mortar to online commerce points to a change that no GameStop CEO can influence. Online marketplaces will take up most of the slack, with big-box retailers like Walmart & Target (here in the US) offering a decent (though not complete) representation of available software.
While nobody's happy about the inevitability of job separation, it's unavoidable for retail employees. It's not just GameStop-- but the brick-and-mortar model as a whole-- that's on its way toward niche status.
CosmicQueso
Member
You should care because the profits from those games are how other, riskier development gets funded.
This is the same thinking that prevented publishers from jumping on STEAM earlier. Turns out, selling a million copies at $5 each is a lot more profitable than selling sixty thousand at $60.
During the recent PSN flash sales, some games were selling more during that sale than they had, in some cases, life to date.
So yes, if sales can triple at $23 versus $60, and if more share of those sales go digitally, then not only can AAA survive, they can thrive.
Based on recent history, there's no reason to think that this couldn't happen.
Mufausa The 3rd
Member
Reminds me of when I got my Last of Us PS4 bundle and I seen a damn expiration date on the box. Which was related to the voucher coupon for the game. I was pissed about that..
GalacticMouse
Member
GameStop's only concern is that they add cost to video games but don't add any real value. Digital pricing is an opportunity to remove the added cost that retailers bring to the table and show people how little value they get from going to GameStop. All concerns are 100% appropriate. They should be worried.
Digital game prices on consoles are usually around MSRP, however within a couple of months most major releases will go on sale and that's what hurts GS because they can't push their used games.
GS has a real problem on their hands right now and it's not necessarily digital game prices. BB (BestBuy) with their GCU promo is absolutely killing GS's used games market. It is literally cheaper to buy a new game at BB than to buy a used version of the same game at GS. As a matter a fact, at least in the US, BB is killing the used game market period.
QuantumZebra
Member
GalacticMouse
Member
I absolutely love Best Buy's strategy with this. They take the $120 up front (or $60, $30, or $0 apparently) and all but guarantee that every game that person buys comes from them. I've had it since May and I haven't bought a game elsewhere since. I also re-upped with that crazy "free with a mobile phone / sim card" promo a few weeks ago, so I don't see myself buying any new games from any other retailers before May 2018 unless they drastically alter the program.
Diablohead
Member
Meanwhile in the UK and most of Europe, XBL and PSN digital prices are above store prices.
Digital is usually more expensive than retail. Gamestop is just worried about digital games fucking up their used game revenues.
Unless a huge sale is going on, I will never buy digital games. Retail just has way too many advantages. They are usually cheaper, don't have to download to take up bandwidth and hard drive space, and they are not tied up to my gaming account if anything ever happens to it. I have seen more than enough threads where someone is banned from PSN/Live/Eshop and no longer have access to their games without going through a ton of hoops. I usually don't resell my games, but that is a benefit as well.
Unless a huge sale is going on, I will never buy digital games. Retail just has way too many advantages. They are usually cheaper, don't have to download to take up bandwidth and hard drive space, and they are not tied up to my gaming account if anything ever happens to it. I have seen more than enough threads where someone is banned from PSN/Live/Eshop and no longer have access to their games without going through a ton of hoops. I usually don't resell my games, but that is a benefit as well.
I am confused as to where one can buy digital games so cheap to bring the average down to $22. Or do they include PC games and Steam?
Because Live/PSN games seemingly never go on sale. Ever. I really wish more retailers sold digital codes for those platforms as I would go digital a lot more often if prices fell as disc prices do over time.
Because Live/PSN games seemingly never go on sale. Ever. I really wish more retailers sold digital codes for those platforms as I would go digital a lot more often if prices fell as disc prices do over time.
Live/PSN games go on sale all the time. I'll concede that very rarely do we get sales during the first month of release but they do go on sale. Both services have games on sale on a weekly basis. I would suggest checking out CAG or keeping up with sales threads here.
Crimson_Fate
Member
I have seen PS3 games on PSN have flash sales but I am yet to see a PS4 game on sale that was lower then Physical copies I could buy locally.
In the spring, the US PSN store had Lego Marvel Superheroes and Injustice for around $10. Outside of that it has mostly been Thief, Tomb Raider and a couple of other third party releases on sale in the $20-$30 range.
Robert at Zeboyd Games
Banned
I'd be curious to find out what the average price a consumer pays for a full, AAA physical game is. I'm guessing it's drastically less than $60 since you have sales, used games, and since prices tend to drop drastically a few months (or weeks) after release.
TheChewyWaffles
Member
In other words, we need more collusion!
Fuck you.
BLACK AMERICAN PSYCHO
Junior Member
This is exactly what's happening with me, plus you have to install the whole game these days anyway.
John Harker
Definitely doesn't make things up as he goes along.
His argument is about the perceived and sustainable value of the product itself, not the COGS (cost of goods sold) you're referencing. The end-product is the piece of entertainment you are receiving and he is trying to argue that once you start to de-value that at lower price points it becomes increasingly difficult to maintain the overall premium price you need to sustain to reach profitability. Also it becomes increasingly difficult to "raise" it again (which often triggers contraction, or forces alt rev models such as IAP on mobile).
Big games these days are budgeted years in advance and built on an existing revenue model of $60 (then factoring in depreciation). If the market shifts too rapidly toward a lower price point - let's say his case of $22 - those products that release that were budgeted in a different monetization environment are doomed to lose money, as there is no real "lift in sales" yet to make up for the revenue loss from consumers who wouldn't spend the $60 mostly due to limitations in the channel (mom is going to gift you the game for the holidays if she can't find it in stores because it's only on PSN as an example). Consoles aren't at a big enough install base and digital attach is still between 20-30%... So the money you lose on that 40$ price drop isn't made up by volume of additional consumers you'd get digitally yet.
So then you'd have to cut budgets to return to break even point which likely means layoffs and lower quality games than what the market is demanding, which in turn could have the affect of no longer growing the market as you wouldn't be able to take as many risks if the big returns aren't there to re-invest in new IP or smaller, non-blockbuster titles.
These pricing rebalances will happen, but I get the impression he is saying from his perspective it needs to transition slowly and be well managed in order to account for different pricing models to maintain the perceived value of the game, despite how quickly the technology and COGS change.
That's why you see such a big digital push for ARPU and microtransactions and all that - helps stabilizing pricing disparity, can bring the $22 users closer to price parity and gives the remaining $60 loyalists opportunity to invest more in the games they really love and want to continue to play (and are probably in return buying fewer games because they are more invested in the few $60+ games they do buy retail).
Anyway there's no Right or Wrong, just depends what house your chair sits. Industries so dependent on technology often have growing pains during tech transitions since their P&L is so closely tied to it.
TheDarkTriforce
Banned
GameStop pays nothing for used games and sell them for new game prices and then they say that digital games are too cheap? I really don't like GameStop!
Edit: In my opinion they just want to make their overpriced used games look like they are cheap compared to digital games
Edit: In my opinion they just want to make their overpriced used games look like they are cheap compared to digital games
legacyzero
Banned
YES.
Vincent Grayson
Member
They stopped doing "deals" entirely, at least according to the cashier last time I was in a GS asking about any promotional trade deals. I think they decided it was too confusing for customers (and bad for business) for them to be setting up a system where it was in your best interest to wait and never trade things in unless there was an active promo.
So at this point, the value is what it is, and it gets bumped by being a "Pro" member, but that's it.
Let them get cheap.
If a game needs to sell @$60 with $30+ in DLC to be profitable, then you either goofed or like to live dangerously. Gamestop relies on the AAA market as much as anyone.
Games can be even more profitable at a cheaper price if the additional sales make up for it, which is entirely possible and happens all the time on Steam and other various digital marketplaces.
Of course it's in Gamestop's interest to keep digital prices high. Getting undercut with digital content doesn't help their bottom-line at all. Ignore the fact that digital doesn't need to packages and other associated costs.
I honestly don't see how they are still in business at this point. Digital is exploding and not going backwards, and there is so many better options to deal with used physical games.
If a game needs to sell @$60 with $30+ in DLC to be profitable, then you either goofed or like to live dangerously. Gamestop relies on the AAA market as much as anyone.
Games can be even more profitable at a cheaper price if the additional sales make up for it, which is entirely possible and happens all the time on Steam and other various digital marketplaces.
Of course it's in Gamestop's interest to keep digital prices high. Getting undercut with digital content doesn't help their bottom-line at all. Ignore the fact that digital doesn't need to packages and other associated costs.
I honestly don't see how they are still in business at this point. Digital is exploding and not going backwards, and there is so many better options to deal with used physical games.
Have you tried any of the other big box retailers who have had and continue to have some amazing trade in values this year?
Captain Tuttle
Member
Is there any reason that digital games are so expensive in the EU? Is it the same with other types of digital content?
Petrae
Member
This policy made GS even less attractive. The "standard" trade-in values have always been a joke-- but at least there used to be promos that occasionally made a trip there for trades worthwhile. The TIVs now are pathetic.
I don't know if the chain NEEDS TO go out of business, but the sound of inevitability is getting louder all the time.
If GS is trying to keep the price of digital games up then I hope it does go out of business. Trying to nickel and dime your customers, and sell them garbage guides and scratch protection plans is one thing. Trying to make me pay more somewhere else goes beyond tolerable corporate greed efforts.
gigantor21
Member
Genius. Sheer genius.
Also, digital copy isn't worth as much to me as physical so there's no way I'm paying the same price for both. Nor would I have much issue with Gamestop being negatively affected by it--more often than not, I can get digital copy on sale for cheaper than their horrendously overpriced used discs (relative to the trade-in values, which have always been shit).
I have no problem with this.
Nope, of all the games I played this year only one could remotely be argued to be funded that way. Most of them were funded by kickstarter, are independently financed or are smaller scale "AA" productions by studios who aren't involved in the whole 1000 people "AAAA" thing.