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[Portugeezer]

DD games should be 15% cheaper confirmed.

 

[Alvarez]

No, you're right, ignore that whole reselling / good asset management thing.

With a few exceptions, this isn't actually a thing. If you think a sealed Xenoblade ($70) or Chrono Trigger ($105) is an investment, then I have some bad news.

I mean, if you do happen to have a copy of Stadium Events, then go ahead and showcase it. But the whole wall of video games thing always comes down to either disorganization, obsession, or delusion.

I'm sorry for wanting to maintain ownership of products that I buy.

Steam isn't going to revoke your games and Obama isn't going to take away your guns.

 

[Evolution of Metal]

What's interesting is that it's 55% at full price.

That obviously means that the publisher share will be continuously smaller (below 55%) the more the price is lowered.

Unlike digital, where it's always 70% (or probably closer to 100% for e.g. Uplay sales for Ubisoft).

Are you sure? Plenty of retailers discount games' at their share. For example Amazon's Prime discount on pre-orders. I would assume that it goes completely out of Amazon's pocket, no way they are getting lower prices compared to other retailers.

You can get 48$ (20% disount) pre-orders on Amazon with Prime. Amazon would still keep the 5% (out of 25%). GAME is also throwing a month old releases for $40-45 equivalent and there is no way that they are getting a special price 1 month into the game's life.

 

[Breakbeat]

Steam isn't going to revoke your games and Obama isn't going to take away your guns.

Yeah, no. It's not some imaginary hypothetical boogieman. It's real and it's gonna get worse as we go more and more towards digital being the primary sales method. Stop flexing your ideology to make people who actually care about ownership and preservation look like luddites.

 

[Cleve]

Starship Troopers

Doing your part to drive up Ubi's profit margins?

 

[King_Moc]

Yeah, no. It's not some imaginary hypothetical boogieman. It's real and it's gonna get worse as we go more and more towards digital being the primary sales method. Stop flexing your ideology to make people who actually care about ownership and preservation look like luddites.

There was GTA San Andreas retroactively removing songs from the soundtrack as the licenses expired as well. And that being forced on people that already owned the game.

 

[tuxfool]

Yeah, no. It's not some imaginary hypothetical boogieman. It's real and it's gonna get worse as we go more and more towards digital being the primary sales method. Stop flexing your ideology to make people who actually care about ownership and preservation look like luddites.

For all intents and purposes it will end up being the same thing. So many games are inherently dependent on patches, all they have to do is remove the available patches for the game and it is effectively revoked, regardless of whether it is digital or physical.

 

[Alvarez]

Yeah, no. It's not some imaginary hypothetical boogieman. It's real and it's gonna get worse as we go more and more towards digital being the primary sales method. Stop flexing your ideology to make people who actually care about ownership and preservation look like luddites.

Oh, did you pay for P.T.?

 

[WeylandxYutani]

70/30 split is the defacto model for digital distribution on PC and follows a simialr pattern on console. No surprise about the numbers in the OP

 

[Cleve]

With a few exceptions, this isn't actually a thing. If you think a sealed Xenoblade ($70) or Chrono Trigger ($105) is an investment, then I have some bad news.

I mean, if you do happen to have a copy of Stadium Events, then go ahead and showcase it. But the whole wall of video games thing always comes down to either disorganization, obsession, or delusion.

Steam isn't going to revoke your games and Obama isn't going to take away your guns.

I mean that's obvious, but are you serious with that first post? For console folks the digital storefronts just charge way too much compared to the deals you get on physical stuff that you can sell or give away when you're done with it.

Digital's way more convenient, but it's not $12-22 more convenient on a $60 product. Shit's real bad in other countries too. I'm sure you've seen the SFV pricing in australia pic that's been floating around the past couple of weeks.

Even a couple PC titles I managed to get cheaper physically recently. I just used the key and threw out the junk.

 

[Wozzer]

It's fantastic that publishers see at least 15% increased revenue share from selling digital, up to a massive 35% for EA on Origin.

That must mean consumers can be charged a lower price, having both publisher and consumer benefit together... oh, no wait sorry, nevermind.

 

[KingV]

Wouldn't the margin remain the same, even if the total revenue per transaction changed?

And wouldn't digital still have to pay licencins on consoles, meaning that it would be below 70%?

So, I don't work in the gaming industry, but do work in a business with high volumes of retail sales (food industry).

How it usually works in the food industry is that both the retailer and manufacturer take a hit on sales.

So a manufacturer might go 'hey, our model suggests that we could sell 30% more pot pies this week if you cut the price to $1. So typically the manufacturer and retailer will work out a joint deal, where they both take a hit on margin but end up making more money on increased sales.

There's different ways to structure it, sometimes it's pay performance (I.e. If you sell 1 million units, we will give you this price). Sometimes it's will give you this price if you retail for x, put it in your ad, and put out this special display.

Not sure how it works in games industry, but I'm guessing that Best Buy sales are probably lowering margin for both the publisher and Best Buy.

 

[Steel]

It's fantastic that publishers see at least 15% increased revenue share from selling digital, up to a massive 35% for EA on Origin.

That must mean consumers can be charged a lower price, having both publisher and consumer benefit together... oh, no wait sorry, nevermind.

Well, steam charges a lower price. And DD only games are cheaper. But sure, link a game from Origin, which people hate for a reason.

 

[Breads]

It is amazing that they are still charging the ridiculous prices in Europe for digital in this case (on psn /XBL).

Why don't they want to push us towards digital?

Isn't that the fault of taxes/ tariffs being applied by the country and not the publisher?

 

[Alvarez]

I mean that's obvious, but are you serious with that first post? For console folks the digital storefronts just charge way too much compared to the deals you get on physical stuff that you can sell or give away when you're done with it.

Digital's way more convenient, but it's not $12-22 more convenient on a $60 product. Shit's real bad in other countries too. I'm sure you've seen the SFV pricing in australia pic that's been floating around the past couple of weeks.

Even a couple PC titles I managed to get cheaper physically recently. I just used the key and threw out the junk.

I wasn't completely serious. You've brought up great points. Physical is definitely cheaper a lot of the time.

I argue that digital games should be slightly cheaper (at launch) than their physical counterparts because 1) they typically can't be resold, and 2) they're obviously cheaper to "produce".

 

[KingV]

With a few exceptions, this isn't actually a thing. If you think a sealed Xenoblade ($70) or Chrono Trigger ($105) is an investment, then I have some bad news

I think buy it, play it, trade it is actually a fairly common behavior. You can save a lot of money on games by doing that.

There's games I buy on console despite having a good gaming PC for that reason. If I can buy something for $48 with a $10 gift certificate, and then resell it for $30 in a month, I'm going to do that over buying it for $59.99 digitally, playing it once and then that's it.

 

[lawnchair]

Ahem.

.....

.........

................

Physical media is for adults who are bad at interior design and for children who naturally want to hoard their toys.

how dare you insult my interior design skills! i am a rather capable interior designer, sir!

 

[Wozzer]

Well, steam charges a lower price. And DD only games are cheaper. But sure, link a game from Origin, which people hate for a reason.

You're right, it's only Origin.

You typically see full priced retail games published digitally cheaper by a 15-35% margin. It's just EA.

 

[Ninja Scooter]

I'm sorry for wanting to maintain ownership of products that I buy.

When did we get to the point of defending shitty publisher practices? Convenience is the only plus side I see to buying digitally. Retail is better is almost every way.

It's starting to feel like a physical disc doesn't offer any more ownership of a game anymore, not when so many games are reliant on huge patches, updates and DLC downloads sometimes on day 1. Not sure why but what really made this sink in for me was Destiny Taken King. A couple months back I decided to try and get back into it and it was on sale at Best Buy (plus I had a gift card) so I went physical. When I got home and opened it up I realized the game disc itself was the exact same vanilla Destiny disc I had sitting on my shelf already, just with a download code inside for all the extra stuff. Now at the end of the day it doesn't matter, the game is the game, but I couldn't shake the feeling that this physical thing I was holding and had purchased felt sort of worthless. At some point it's gonna feel like owning a collection of AOL startup discs.

 

[mrklaw]

The part I'm not a fan of is how the models are different - putting aside the revenue splits

Physical: Publisher sets wholesale price to retailer and MSRP. Retailer is free to sell at lower than MSRP if desired to spur sales. Publisher gets same wholesale price anyway. Platform holder gets fixed amount per title printed (whether sold or not)

Digital: Publisher sets retail price to consumers. No ability for retailer (platform holder in this case) to discount if desired, without permission from publisher. Platform holder gets variable amount based on retail price set by publisher.


I don't like the control over the retail price that the publisher has in the digital model. There should be some mechanism to allow for price discounting.

 

[Diablohead]

UBI sell their digital games for £55 fucking quid in the uk, that's more then 70% to me.

Average new game price in retail stores is around £40, just for perspective.

 

[jelly]

They do, but they don't want to lose shelf space in Gamestop et al. Cutting digital prices may bring them in a little bit more profit by pushing some gamers over to digital, but it would probably lose a lot more when Gamestop shoves it in a corner at the back of the store rather than giving it a big front-of-store PoS display. Digital may be gaining traction, but most people still buy physical, so Gamestop/Game/etc. still have a lot of sway.

I don't understand this argument, Gamestop live or die on games, consoles so why do they dictate anything, they should dance to the tune of manufacturers. I think the only reason digital is expensive is because publishers are greedy and die hards stump up the cash anyway like people buying collectors editions. Do you really think Gamestop etc. are going to refuse whatever they are given, come on!

 

[Steel]

You're right, it's only Origin.

You typically see full priced retail games published digitally cheaper by a 15-35% margin. It's just EA.

You're using ubisoft and Dragon's Dogma which was more than simply a straight port and more akin to a full remaster which, additionally, also had humble bundle sales that put it well below $30 at launch, as examples?

Seriously?

Steam games drop in price really fast, often have massive day 1 discounts, and go on sale deeply pretty often.

 

[Matt]

Are you sure? Plenty of retailers discount games' at their share. For example Amazon's Prime discount on pre-orders. I would assume that it goes completely out of Amazon's pocket, no way they are getting lower prices compared to other retailers.

You can get 48$ (20% disount) pre-orders on Amazon with Prime. Amazon would still keep the 5% (out of 25%). GAME is also throwing a month old releases for $40-45 equivalent and there is no way that they are getting a special price 1 month into the game's life.

You're half right. Amazon Prime's and GCU's discount mostly do come from the retailer's share, but sale prices often are the result of negotiations with the publishers.

 

[ironcreed]

I am pretty much all digital these days, but will still buy the odd physical copy here and there. It's a transition that just sort of happened naturally due to how convenient it is.

 

[kinggroin]

It sucks for those who like collecting or having more management over their libraries, but you have to acknowledge that more and more, people are willing to give up "rights" for the sake of convenience.

Not sure what full tilt will look like or if it'll ever happen, but the trend TOWARDS that is there.


On the bright side, you'll die one day, so you won't have to deal with it forever.

 

[Owensboro]

With a few exceptions, this isn't actually a thing. If you think a sealed Xenoblade ($70) or Chrono Trigger ($105) is an investment, then I have some bad news.

I mean, if you do happen to have a copy of Stadium Events, then go ahead and showcase it. But the whole wall of video games thing always comes down to either disorganization, obsession, or delusion.



Steam isn't going to revoke your games and Obama isn't going to take away your guns.

I'm sorry, I thought I made it pretty clear by "asset management" that I meant using games you've bought/beaten in order to purchase new games. You know, that thing you absolutely can't do with digital games?

 

[Steel]

You typically see full priced retail games published digitally cheaper by a 15-35% margin. It's just EA.

Hilariously you just proved my point with naruto shippuden which is still $60 at gamestop and it's $50 on Steam. It also had 3rd party discounts as low as $35 before launch. And Rise of the Tomb raider had similiar prelaunch discounts.

 

[Alvarez]

It sucks for those who like collecting or having more management over their libraries, but you have to acknowledge that more and more, people are willing to give up "rights" for the sake of convenience.

Not sure what full tilt will look like or if it'll ever happen, but the trend TOWARDS that is there.


On the bright side, you'll die one day, so you won't have to deal with it forever.

It doesn't always end there. Some collectors collect with the intention of forcing their children to play all of their awesome classic 20-years-old games. Just think of all the memories you'll make with your daughter when you force her to play through the Twisted Tales of Spike McFang.

 

[KillerMan91]

For all intents and purposes it will end up being the same thing. So many games are inherently dependent on patches, all they have to do is remove the available patches for the game and it is effectively revoked, regardless of whether it is digital or physical.

It really won't be. There is a difference between being still able to play the game trough with some bugs and performance problems and not being able to play it at all.

 

[velociraptor]

I can sell my retail games. Will stick to retail.

I only buy digital if the game is dirt cheap aka Steam.

 

[blame space]

These margins are gross

 

[Baron Doggystyle von Woof]

Imagine the margins on DLC. We getting shafted alright.

 

[shauntu]

So... is this summary fairly accurate?

Games sold at retail:
25% cut for retailer
10-15% cut for platform holder (manufacturing, licensing)
5% cut for distribution costs
55-60% gross margin for Publisher

Games sold digitally from platform's digital shop (including Steam):
30% cut for platform holder (includes licensing)
70% gross margin for Publisher
(Note, Sony as digital shop holder also charges for download bandwidth, so the gross margin for publisher drops a bit due to that)

Games sold digitally from Publisher's own digital shop (EA-Origin, Ubisoft-Uplay, Valve, Nintendo eShop, Sony, MS):
5% transaction cost (Credit Card fees)
95% gross margin for Publisher

What about digital purchases made in physical stores, like Download cards or redeem codes etc? What about digital purchases made through other stores like Amazon or GOG? How does the breakdown change with Cash Cards purchased in stores?

 

[QaaQer]

Happily all digital now days and love it. Would much rather Sony/MS get that retailer cut than Amazon, Walmart, GameStop, or Best Buy.

Yeah, fuck those retail workers. They either should be unemployed or slaving in Amazon warehouses with bio-metric monitoring to make sure they aren't too slow or too old.

 

[DrWong]

I'd be interesting to have the digital Uplay breakdown between consoles/steam (the 70/30 crow) and Uplay itself to know the real/direct Uplay market share.

 

[HotHamBoy]

It doesn't always end there. Some collectors collect with the intention of forcing their children to play all of their awesome classic 20-years-old games. Just think of all the memories you'll make with your daughter when you force her to play through the Twisted Tales of Spike McFang.

Alverez, for as cynical as you are, I haven't disagreed with anything you've said. In the western world many people are in denial about how consumerism and materialism has taken hold of their lives and defined who they think they are. But let's not forget the sickness that is impulse buying digital games on sale and hoarding giant invisible backlogs you can easily ignore without shame. It's a disease I and many others share.

More on-topic, people have to look at physical shelf space as a form of advertising. It's visibility. It's how a lot of non-hardcore console owners learn about games. It's how grandma shops for birthday presents. And i wouldn't be surprised that a lot of games bought digitally were first discovered on a store shelf. You gotta look at the world beyond how it relates specifically to you.

 

[7DollarHagane]

Hey how about tossing digital buyers a bone and giving them a 15% pre order discount then, publishers?

Oh right you want that extra profit..

Will keep buying with prime/gcu discount..

Gotta offer something if you're profiting more and taking away my resale value.

 

[shauntu]

With a few exceptions, this isn't actually a thing. If you think a sealed Xenoblade ($70) or Chrono Trigger ($105) is an investment, then I have some bad news.

I mean, if you do happen to have a copy of Stadium Events, then go ahead and showcase it. But the whole wall of video games thing always comes down to either disorganization, obsession, or delusion.



Steam isn't going to revoke your games and Obama isn't going to take away your guns.

Yup, I can still easily play Half-Life 2, my first Steam purchase back when Steam started out. I can't easily play games I bought in store at the same time -- installation headaches with OS compatibility problems, finding the discs in the first place, hoping any DRM has workaround solutions...

Similarly, my entire DSiWare and WiiWare library is still available and playable for me on my 3DS and Wii U (both sets having migrated through 3 systems each). Sure, Sony and MS fluffed it but Sony has slowly been making up for it through Crossbuy as PS4 versions of PS3/PSN games get released, and MS is slowly expanding their new Backwards Compatibility support.

 

[John Harker]

It is amazing that they are still charging the ridiculous prices in Europe for digital in this case (on psn /XBL).

Why don't they want to push us towards digital?

In some ways, retail mitigates risk. Kind of like a little cash safety net.

Retailers buy in advance. If I forecast a million units sold through in my fiscal, my job is to get retailers to buy like 1.4mm units in advance of launch to stuff the channel. That's a big chunk of cash for me in my current fiscal. Even if the game sells thru half of that, under forecast, I don't really have to worry as much about that right now - I got all the cash upfront.

Via digital, if I forecast 1mm units and the game sells half that or totally tanks.... Despite higher margins per unit, I'm SOL this fiscal as I won't see any big cash influx. Better hope big sales and discounts get you the revenue longer term.

It's also a very different audience buyer.
Mom isn't going to PSN to buy their kids Christmas presents. You want a well trained GameStop employee to inform her what your biggest games are this holiday for gifts. To do that, you gotta play ball with the retailers. The browsing experience on digital stores is shit compared to a shopping experience for the majority of gift buyers and broader consumers. People hit digital marketplaces when they know what they want. Log in, buy, play. Very little browsing. Lower catalogue sales too unless you're one of the few games to "trend."

So, lots of reasons retail is still important despite digital being what most would want. It's just a slow evolution but clearly happening as younger generations grow up with this shopping behavior and digital stores update to accommodate more casual shoppers.

 

[AlucardGV]

If the industry is serious about digital taking over, it can't have the same pricing as physical retail disks. It makes no sense.

european nintendo eshop is more expensive than amazon lol

 

[7DollarHagane]

With a few exceptions, this isn't actually a thing. If you think a sealed Xenoblade ($70) or Chrono Trigger ($105) is an investment, then I have some bad news.

I mean, if you do happen to have a copy of Stadium Events, then go ahead and showcase it. But the whole wall of video games thing always comes down to either disorganization, obsession, or delusion.



Steam isn't going to revoke your games and Obama isn't going to take away your guns.

That's pretty judgemental/insecure kind of thing to say. Put what makes you happy in the space where you pay to live.

Does my dad have obsession and delusion with antique snowmobiles that he restores and displays in the garage but doesn't actually ride, because it reminds him of his teenage years? A lot of people have hobbies and a lot of people display them.

I'm more about storage and accessibility than display but I admit I love looking at my ps1 longbox collection and Japanese Saturn games on the bookshelf.

 

[outunderthestars]

Yeah, fuck those retail workers. They either should be unemployed or slaving in Amazon warehouses with bio-metric monitoring to make sure they aren't too slow or too old.

I'd rather spend my money supporting the companies who produce/finance the content. I don't particularly care if any retail company continues to exist.

Do you buy all of your music on cd's? What about those retail workers? Do you still buy magazines? What about those retailers? It isn't our job as consumers to prop up businesses with outdated business models.

 

[John Harker]

That's why the key big wins going forward are huge retail sales for big blockbusters, but these big titles are primarily service oriented and have constant digital updates and simple transactions from within the game itself.

Retail gets it into your home, and digital makes it easy to keep it there and increase ARPU

 

[RDreamer]

I'm trying to go all digital this gen, but fuck it's hard. Between the fact that stores put on sales on physical discs so much and the fact that I see steam with sales every 4 seconds it feels weird to log into the Playstation store kind of excited about a game I saw a sale on only to see it's like 2-3 times the price. Then I just don't buy it on any platform....

 

[CosmicGroinPull]

Wow 55%. I guess that's how the big guys can afford $500 million parties...

 

[HotHamBoy]

That's pretty judgemental/insecure kind of thing to say. Put what makes you happy in the space where you pay to live.

Does my dad have obsession and delusion with antique snowmobiles that he restores and displays in the garage but doesn't actually ride, because it reminds him of his teenage years? A lot of people have hobbies and a lot of people display them.

I'm more about storage and accessibility than display but I admit I love looking at my ps1 longbox collection and Japanese Saturn games on the bookshelf.

Well, I think his point is that people celebrate materialism by putting it on display, and they stubbornly stick with physical media because they think it is important to feel "true ownership". That's a sentiment the world would be better off without. People should stop assigning personal value to their stuff, they would arguably be happier. It's debateable that one should not feel happy simply because they have a bunch of things. Happiness should stem from accomplishment, buying a collection is not an accomplishment. Making money is hard but spending it is very easy.

Your dad actually rebuilds old machines. That's pretty cool. That's an accomplishment.

 

[Diablohead]

Oh, did you pay for P.T.?

P.T was still pulled from peoples hands, paid or not.

 

[HotHamBoy]

P.T was still pulled from peoples hands, paid or not.

But his point is that no one owned P.T. because no one paid for it. So they had no right to it. It certainly wasn't pulled from my hands, either. Sittin there on my hard drive as we speak. So far we haven't seen games pulled from people's accounts except on Apple, which is part of their ToS. And he's right about the dependency on patches making physical games stuck on v1.0 shitty.

That San Andreas example is terrible, I don't recall Rockstar collecting all the PS2 discs and replacing them with new ones with less music. The new versions have less licensed music, nothing has been forced on people who bought the original game. Absurd. It also has no effect on the gameplay at all.

 

[In Service]

Great OP.

What gets me is that the Digital Price holds steady for games on the XBox marketplace for example whilst physical drops like a stone.

I can see why it's difficult to consider undercutting physical stores with digital pricing but at least track the physical high median price ffs.