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Ubisoft Explains Why Digital Games (on console) Stay More Expensive Than Physical

That's a non-answer. The real reason is because there is no competition. Which is why an all-digital future on consoles is terrible.
 
We already know the reason. Retailers still have a strong power over the console market and being too aggressive in the digital space there will start to ruin important relationships with them.

Meanwhile retailers threw PC under the bus a decade ago and they no longer have power over that market, allowing digital products to lower prices without consequence.
 
soul creator said:
Maybe someone could just make physical discs act as digital games, so it wouldn't matter where I buy the game from, I still effectively get the digital version. So a retail disc discount would the same as a digital discount at that point.

Nah, it'd never work.
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Sly Cooper: Thieves in Time did that. Redeeming the Vita version gave me the PS3 digital version free, ha ha.
 
I don't get the retailer reason, are they just going to pack up and leave, I don't think so and if they do, well bye. The only real reason for high prices is because they can.
 
SparkTR said:
We already know the reason. Retailers still have a strong power over the console market and being too aggressive in the digital space there will start to ruin important relationships with them.

Meanwhile retailers threw PC under the bus a decade ago and they no longer have power over that market, allowing digital products to lower prices without consequence.
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This.
 
Charge the same price for a non-trade-able medium as a trade-able medium and hope that digital adoption continues to grow. Sounds smart.
 
Gears of War 3 on Xbox Marketplace: $19.99

Gears of War 3 brand new on Amazon: $4.99

I hope physical never disappears. Factor in the second-hand market, and it's the only way I can afford gaming as a hobby.
 
I remember the days people couldn't wait for digital to be here.

Cheaper prices they said.

When pointed out that money is what companies they love they retorted no shipping, no boxes, no plastic, no retailers etc as why it would drop no matter what.
 
Bluenoser said:
What they are not factoring into their price is that we only own the digital copies as long as we own the console it was purchased for. I don't own a PS1 anymore, but I have FF7-9, Tactics, and Suikoden II sitting on a shelf. If I got rid of my PS4 I would no longer own the Witcher 3, yet its just as expensive (or in some cases more expensive) than buying it in a store.

Bullshit- considering the cost savings from a manufacturing/packaging/distribution perspective.
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Yet another reason why I avoid buying digital whenever possible.
 
Chewbacca-Defense.jpg
 
Savitar said:
I remember the days people couldn't wait for digital to be here.

Cheaper prices they said.

When pointed out that money is what companies they love they retorted no shipping, no boxes, no plastic, no retailers etc as why it would drop no matter what.
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It's cheaper when retailers aren't a consideration. On PC it's common to get new release games for $36 digitally. Retail and a more rigid digital marketplace is what's holding back a competitive digital environment on consoles.
 
daniels said:
╰( ͡° ͜ʖ ͡° )つ──☆*:・ﾟ Tadaa! Its nothing...

I guess retailers would be pissed if it is any other way.
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I keep seeing the retailers explanation and I can't really believe it. It does seem to be a simple "We got zero competition and 100% price control on consoles".
 
It has more to do with investors, accounting and inventory at retail than the retailers themselves.

If you drop the digital price from $20 to $10, then you just sell new units for $10.

If you drop the retail price from $20 to $10, then you have a potential liability to virtually cut a check to the retailer for $8 for every unit in the retail channel. This is especially problematic the quarter after shipping a big game.

You could potential come up with an accounting solution to solve for the retail situation, but it would limit the ability to control when the price protection occurred and potentially lead to erratic earnings. The potential for increased digital sales isn't worth the headache with investors.

It is not a problem unique to video games. Many major movie publishers switched over to VMI (vendor managed inventory) programs to solve this issue. It just doesn't make sense for video game publishers to invest in VMI at this point.
 
All I read was "We charge more because the costs are lower for us, you get no physical product and you can't resell it to recoup costs when you're done".

Yeah, bargain.
 
Seanspeed said:
Its absolutely spot on, actually.

Essentially, they explain that digital prices are higher on consoles because they can get away with it.

If you were looking for a reasonable explanation, that is your fault.
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what do you mean by that? What are they getting away with cause it's not like they're doing something wrong? If anything I think it's their loss cause they can drop prices a little bit and sell digital copies that are cheaper to manufacture and they wouldn't have to worry about used sales of that copy. To me it makes logical sense to have competitive pricing. I think there are other things in play here that people want an explanation for because it just doesn't add up
 
I read nothing that let me know why this is occurring. So, should I take that to mean "because fuck you, that's why!" Because that's how I'm going to take it.


BY2K said:
Is it just me or did that explain jack shit?
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No, it's not just you.
 
Not only is digital more expensive on consoles, they basically hold no value what so ever. I can still get 30 to 40 for my used copy of bloodborne. What can you get for the digital release? Zero.
 
There are plenty of sales on PSN regularly for big games. It might be slower compared to some physical retailers but they are pretty common.

They just don't drop in fixed priced that fast but promos do happen quite a lot.
 
FF Seraphim said:
Lol they can fix this by treating console digital market the same as the PC digital market. Reading this makes me so god damn glad we do not have download only consoles. Some publishers are just not ready for a digital future it seems
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Digital market on consoles doesn't react as fast as PC because the physical retail games are still a bug chunk of business while physical is pretty much dead on PC.

They aren't going to undermine the physical inventory out there. As physical/retail diminishes, the digital markets will act more like they do on PC currently.
 
Data West said:
The lack of aggressive sales on digital for consoles due to physical still being a thing has to be the biggest disappointment of this generation of consoles. Even the stuff they do now with their weekly sales is laughable compared to the PC front or even things like Amazon's sales.
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You honestly think that parents are going to let their kids max out their credit/debit cards on buying digital versions of games? Doubt it.

And if you or anyone else think that 3rd party publishers are going to give you cheap deals on games should physical copies goes away on consoles, then you're gullible.
 
Retail you have to contend with shelf space and multiple retailers all competing. It's not realistic to expect a single storefront with unlimited supply to offer the same deals. I wish it did, and I wish retail would wither away quicker, but the cynic in me believes that the platform holders and publishers will gouge even more when they have total control.
 
I still like buying digital games, cheaper when i get to file share. But the guy gave a non answer as was to be expected.
 
I'd still like to know why a digital game, which is nothing to produce, costs the same as a manufactured physical game?

I mean, besides the obvious reason of because they can.
 
This "because they can" idea is ignorant of basic economics. They are competing with other, newer games for attention and dollars. Of course sales are important to that. One of the reasons prices are inflated on digital is protectionism concerning the boxed retail market which has sunken costs that don't exist in digital. They want to sell through the remaining inventory otherwise the retailers won't be happy which could potentially hinder future promotion and orders for games. Propping up physical doesn't make sense in the long run but in the short term they are incentivized to not compete with their own products at retailers. It's not because they are greedy and can take more profit. People respond to differences in prices.
 
Sword Of Doom said:
what do you mean by that? What are they getting away with cause it's not like they're doing something wrong? If anything I think it's their loss cause they can drop prices a little bit and sell digital copies that are cheaper to manufacture and they wouldn't have to worry about used sales of that copy. To me it makes logical sense to have competitive pricing. I think there are other things in play here that people want an explanation for because it just doesn't add up
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They're not doing anything wrong from a business standpoint, no. What they're doing is smart.

They sell their products on the shelves full price for as long as possible. When new games come in, *then* prices get reduced. In the digital world, they don't have to worry about shelf space, so they can charge as much as they want for as long as they want.

Price drops are always an option, but so long as they see good profits from existing prices, like they are reporting, then they've got no need to cut prices dramatically.

The reason that you have lower prices for digital games on PC is because of competitive storefronts. On console, you are locked into buying from either Sony's storefront or Microsoft's storefront. They each receive a cut of each item sold and with no competition, both storefront owner and publisher are happy to sell as high as possible. On PC though, neither console manufacturer is involved. Instead, you've got competing storefronts on the same platform, vying for customer's money. Steam didn't always used to be this bastion of cheap game prices. It was just a reaction from competition to ensure dominance. So ultimately, on PC, digital game prices tend to be lower on average. Because there's competition.

Shai-Tan said:
This "because they can" idea is ignorant of basic economics.
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No, its because of economics that this principle results.

You don't charge less for something when you don't need to.
 
No, its because of economics that this principle results.

You don't charge less for something when you don't need to.
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Some games like Call of Duty and Grand Theft Auto don't tend to discount even on digital because the demand is a lot less elastic at a higher price point so it's irrelevant that they sell all their copies at retail but most other games have a big drop off in interest outside of their release window compared to other, newer games. Discounting captures sales that otherwise wouldn't have occurred at another, higher price point. Competition isn't only between storefronts - it's also between games. It does matter that different retailers on PC digital discount but I think most people are just buying from the Steam storefront. We could point out deficiencies in the promotion side for sales on PSN and Xbox live that also disincentive sales but I don't think the Green Man Gaming of the world are the reason why prices are lower on PC digital compared to console digital.
 
BY2K said:
Is it just me or did that explain jack shit?
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They can't discount on digital consoles immediately because it would affect their day one physical orders from retailers. That's pretty much exactly what he is saying. Remember retailer stores buy directly from publishers, not consumers... So they have to sell to stores and that's what they want to see, price parity at launch. Volume is not there yet on digital to change that, which is what he's saying (as I read it yet anyway)
 
Seanspeed said:
Steam didn't always used to be this bastion of cheap game prices. It was just a reaction from competition to ensure dominance. So ultimately, on PC, digital game prices tend to be lower on average. Because there's competition.
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As a European Steam user, I laugh at that "bastion of cheap game prices". Euro Steam is so far from that, the prices are crazy. New games are now at €60 on Steam while PC retail copies go for €40.

Consoles have the same thing, but the prices of both are higher: PSN charges €70 while retail copies are €60.
 
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