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Goatseye said:

I have trouble reasoning and coming up with an answer for the same price tag between physical copy of a game and a digital one.

And why does the price of games tend to stay higher in digital form for longer than physical form?

ex:Modern Warfare 3 is still $59.00 on XBL and on Amazon it goes for $33.72 new free shipping.

http://marketplace.xbox.com/en-US/Product/Modern-Warfare-3/66acd000-77fe-1000-9115-d802415608cb

http://www.amazon.com/Call-Duty-Modern-Warfare-Xbox-360/dp/B00503E8S2/ref=sr_1_1?ie=UTF8&qid=1370282053&sr=8-1&keywords=modern+warfare+3#replacementWidget


I always thought it was something to do with bulk ordering.  When you buy in bulk (1000s of the same product) you will be given a discount in most businesses (wholesale price) compared to the singular purchase.

As this isn't done with digital copies - only 1 version is required to distribute to everyone - there's not as much margin for price reduction.  In a lot of cases you may even find that at launch a physical copy can be as much as $10 less than the digital ones.