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

Is it just me or did that explain jack shit?

Translation: We want to protect our retail channel partners, so we'll happily screw over digital buyers.

Ubi doesn't want to risk losing shelf space at retail by making digital cheaper.

There is no real shelf space to lose at retail for PC games, so there is no risk to pricing aggressive with digital PC games.
 
Is it just me or did that explain jack shit?

He says theyre not going to promote digital games while there are still games on the shelves (where the business is) that need to be sold. Also since on pc more games are sold digital, there is a higher competition and thus cheaper prices..
 
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.

Wait, so you think having less things to compete with it will make it cheaper?
 
Game retailers pay up front for their stock. If the game is MSRP $60 you get the game for say $51 per unit. $9 profit per game. If you sell them for $45 to clear stock you take a loss on them.

That's not correct.

Retail games have price protection. If MSRP drops, the retail gets credit.

Retailers do not just "buy" the games up front and then get stuck with the stock. There are all sorts of price and buyback provisions.
 
Is it just me or did that explain jack shit?

It's not you.

Remember when developers and publishers said digital would bring cheaper games?
Where are those games?

In theory same day digital releases should be less expensive than their physical copies. Batman Arkham Knight $59.99 Digital. Batman Arkham Knight Physical $59.99.

This is one of the main reasons I don't buy digital. They give me 0 incentive to buy direct.

Another example in the long line of gamers being bent over.
 
Wow that OP felt like playing one of Ubisofts games.

Long and exciting premise but left with a feeling of nothing accomplished at the end.
 
Is it just me or did that explain jack shit?


The thing if it is, you have 2 things the same price right

So one of them is online and the other isn't

And it's crazy

So pc games and console games are different

And after a year it's different and we sell less in stores

So we could sell them digitally,or physically the choice is ours

We hear people ask about why

And we're like

Wow
 
"What we can say is that when games are older than one year, digital is a lot more dynamic on console because there are less units in stores. It's a new business, a new trend, and we think all this will get more in line with time, but for sure, at the moment you see all sorts of prices depending on who is doing a promotion for that specific week."


So why is Far Cry 4 still $60 digital when I can buy it for $40 retail, Ubi? Assassin's Creed Unity came out the same month and the MSRP matches both retail and digital for that.
 
On digital we will not sell [a game] for a lower price compared to physical.
In the UK at least they sell games at a much higher price than retail, so I would be happier if they even sold them at the same price.
 
So why is Far Cry 4 still $60 digital when I can buy it for $40 retail, Ubi? Assassin's Creed Unity came out the same month and the MSRP matches both retail and digital for that.

Because if it were to be $40 digital you still wouldn't buy it.

But if they run an event on PSN... and all of a sudden that $60 game is 33% of(!!!) then a whole bunch of people would buy it at $40.
 
You'd think with all the hyjinx they tried pulling last gen to combat buying used games, selling digital at a cheaper price would be a great alternative.

But what do I know
 
Isn't it because they're scared retailers would drop them?


That has been implied when explained by other companies yes, but the answer here also talks about how physical copies initially move very fast in store and are then discounted to clear stock for the next big game making the games harder to come by, in which case if you can't find a game you can always get it digitally; that being the last available place to get it, as a publisher you're going to hold its value up as high as possible for as long as possible.

PC is a little different to console in that PC has largely gone all digital now so it's far more competitive out there and goes on a similar sales scale to that of in store physical copies. Consoles aren't at that point in terms of digital sales so for now, they are basically leaving the price as is on console digitally, moving titles in store and then when the games are more sparse on store shelves looking to discount titles digitally after.

But yes, undercutting retail stores would be a pretty quick way to have stores complete ignore your product as they can't compete in price nor do they want to get stuck with multiple copies of your game floating about on store shelves not moving because they can buy it direct from you for cheaper.
 
Dunno why you guys don't get it. It's pretty simple: demand for digital increases as physical supply dwindles, therefore they have no cause to cut the price.

Pretty fucking basic economics.
 
This is exactly what I read

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We don't have an answer.
 
If bestbuy can knock off 20% off any title I would imagine publishers could do the same on any digital purchase. The publisher even makes a sale on a game that CAN'T be resold.
 
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.

yeah, too bad some of us want to retain ownership/resale rights of the shit we buy, total bummer
 
If bestbuy can knock off 20% off any title I would imagine publishers could do the same on any digital purchase. The publisher even makes a sale on a game that CAN'T be resold.
Brick and mortar don't want to be left with old inventory, this is the basic reason why physical prices drop.
 
As console gamers who don't mind paying high prices jump from retail to digital I wonder what affect that will have on retail prices?

My guess is that retail will get even more competitive as a lower % of gamers who buy retail are willing to pay full price, maybe less used copies too (atleast near launch)
 
Yeah that explained sod all. It does not, and never will make sense to sell a digital version of a physical thing for the same price, let alone a higher price as it usually is. There is no cost to manufacture, package, ship or stock the product for starters.

Edit: I'm referring to why they are the same price to begin with. Which is the real problem imo.
 
It's not complicated, so I don't know why they made it complicated. Physical gets cheaper faster because it costs retailers money to keep stock on on shelves and in storerooms. Since retail space is limited and expensive they need to move stock out to make room for the next new thing so that they can keep the registers running. In short, physical goods end up costing retailers money if they sit on the shelf.

Digital doesn't have this constraint. They can keep stuff on a digital store and add new stuff without the same cost of carrying inventory. They create digital copies on demand as people purchase and download them, so there's never excess inventory to offload.

If console games sold mostly digital like PC games then they would drop in price faster, because at some point you'll sell all you're going to at a certain price point. But as it is publishers have a cushion as retailers eat losses for them on excess inventory. So there's less downward price pressure on digital until later.
 
Is it just me or did that explain jack shit?

I was just about to say this...

Why do they ask this dude, and not Gamestop as to why? We all know the real reasons from the past, but as long as games are growing to other stores like BB and WalMart, Gamestop can piss off with their strong-arming tactics.
 
It's not complicated, so I don't know why they made it complicated. Physical gets cheaper faster because it costs retailers money to keep stock on on shelves and in storerooms. Since retail space is limited and expensive they need to move stock out to make room for the next new thing so that they can keep the registers running. In short, physical goods end up costing retailers money if they sit on the shelf.

Digital doesn't have this constraint. They can keep stuff on a digital store and add new stuff without the same cost of carrying inventory. They create digital copies on demand as people purchase and download them, so there's never excess inventory to offload.

If console games sold mostly digital like PC games then they would drop in price faster, because at some point you'll sell all you're going to at a certain price point. But as it is publishers have a cushion as retailers eat losses for them on excess inventory. So there's less downward price pressure on digital until later.

And thats all well and good. But the concern people have in reality is that they shouldn't be the same price to start with. A concern which this interviewer brushes aside almost immediately.
 
And thats all well and good. But the concern people have in reality is that they shouldn't be the same price to start with. A concern which this interviewer brushes aside almost immediately.

Eh, at launch they have to be. Otherwise you disenfranchise retailers. Until consumers can be convinced to go overwhelmingly digital like PC you won't see lower digital prices. It's probably going to have to reach a point where publishers refuse to kowtow to brick and mortar retailers before anything changes. But as long as we see popular titles selling hundreds of thousands of units at launch on physical that's not going to happen.
 
And thats all well and good. But the concern people have in reality is that they shouldn't be the same price to start with. A concern which this interviewer brushes aside almost immediately.

Digital avoids the overhead associated with physical discs (manufacturing, shipping, etc.), so they could be cheaper.

The problem that all digital products face w/r/t pricing is that selling things that are functionally identical (or BETTER) digitally to the physical counterpart for LESS money, means digital cannibalizes physical sales.

This would erode how useful B&M is to publishers, and how useful video games are to B&M.

B&M would cut back shelf space to have room for things that actually sell in B&M.

This would snowball until B&M has either completely stopped selling games, or it's relegated to some dusty, ill-kept corner of the store (see: what already happened at Sears, Kmart, etc.).

We can pout and stamp our feet that it "should be" cheaper digitally, but the economic reality of the situation is that Ubi shared that 56% of their revenue was digital, but they (and every other publisher) still need that other 44%. Ergo, organic demand for digital at current pricing models will drive the transition to digital over time.

EDIT: Ultimately, things are worth whatever people will pay for them, not what they "should" cost. As long as people are buying digital games at MSRP or whatever meager sale PSN has this month, don't expect ANY publishers to altruistically slash digital prices. I could see one or two publishers doing it as an experiment or just to be the "bad boy"/"people's champion", but it's not going to be a "thing" until publishers are making a far, far larger proportion of their revenue digitally, because a practice that hostile to B&M would result in them being kick them to the curb immediately.
 
Here's why, and I don't see why they don't just explain it:

Shelf space matters at a retail store and you can't keep something on a shelf that isn't selling, and you don't want lost inventory. So the result is to drop the price of something to a level that a consumer would buy it to clean out the inventory and make way for the newer or better item that might sell. This is also why you get things like 2 for 1 deals or buy one get one of lesser value for 50% off.

Digital storefronts don't have inventory. There's less motive to cut a cost.
 
Did you miss this?

Nope, didn't see that before. But, to be fair, we don't know how much of that 56% is console game related.

Hypothetically, 90% of PC Sales could be digital and that would account for 20% of their 56%. Then "Others*" which is "mobiles" and "ancillary" is probably safe to say is mostly digital. So let's just continue on the wild assumption train and say 80% of those "Others*" were digital and that makes up 11% then of overall digital sales.

So 20% and 11% puts you over half of digital sales in those non-console areas.

Finally, do they breakout the digital sales to explain how much of that is actually games? A large chunk could be just DLC, Season Passes, digital only games (a la Valiant Hearts, initial Child of Light, etc.).
 
Do not know why people like him waste time trying to explain something like this if he knows his words will be just crap.
 
I avoid digital where it is possible! The moment you press that "purchase" button, because you are not able to sell it again, your purchase is worth NOTHING. Same reason why I stopped playing on PC, since you are only able to activate every game once. I am not the kind of person who burns money willingly...
The fact that digital is the same price, or even higher as retail is a bitter joke. For me to even consider to buy a game digitally the price would have to be retail price minus what I expect it to be worth when I want to sell it!
 
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.

One thing I really looked forward to with the original Xbox One plan was competitive digital pricing thanks to every physical copy being just a key.

I think once there's a widespread sale of digital download codes for console games across all major physical and online retailers we'll see pricing become more competitive. Amazon does this for PlayStation games right? Some anyways?
 
Okay, keep digital the same price or more than physical. However give us some benefit of going digital on consoles such as consumer protection. Put a refund clause in your digital purchases. Maybe allow us to trade/sell our digital license for PSN/Xbox Live credit.
 
Is it just me or did that explain jack shit?
I think he's saying retailers would throw a fit if they dropped digital prices shortly after launch because they've still got all that product to move.

edit: You see a lot of the same BS as the consoles on PC in the UK, where PC retail still has a presence.
 
So he is basicly saying if you want a game on day 1 buy it physical cause its cheaper. If you can wait a bit longer, buy it digitally cause the prices will go down/on sale faster.

Right?
 
So basically exactly what I and alot of others already thought, "We don't want to piss of retail." The only time this will change is probably when the majority of folks stop caring about buying physical.
 
So who holds power over who? Publishers don't want to piss off retailers in case the retailers give them less shelf space.

But when big games are released, retailers do exactly what they are told by publishers and don't sell games early in case publishers don't supply them anymore? How many times have retailers - at least here in the U.K - held off on posting games out early when it's the likes of GTA V or COD. Or they instruct couriers to hold them until release day. So retailers are scared of publishers?

Both of those can't be right?
 
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