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Forums - Gaming - 18.6% profits up if no used games and a 33% price cut

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thranx on 29 May 2013
green_sky said:
EA also blamed the retail space for high pricing of software but on their own service Origin. They control the pricing and distribution. Yet the games retail for the same msrp as they would on physical media.

If the companies are so pissed at Gamestop's of the world. Why do cater to their every need. Exclusive preorder dlc, not lowering price on digitally distributed software and further providing better sales than what we can find at retail.

It is practices such as these that make us skeptical towards what these companies are proposing. Plus PC's have a lot of competition now as to where you could buy software. I get better discounts from greenmangaming, amazon, gog, impulse (gamestop), etc on top of steam sales.

Not sure how the digital sales on consoles are going to work as far as competitive prices are concerned when you can only buy those games from psn (sen store), Microsoft store and Nintendo e shop.

They do it because they have to work them to sell their games as more games are still in retail than in download. But as that changes and reatail loses its power they will loose their sway aswell.



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green_sky on 29 May 2013
thranx said:
green_sky said:
EA also blamed the retail space for high pricing of software but on their own service Origin. They control the pricing and distribution. Yet the games retail for the same msrp as they would on physical media.

If the companies are so pissed at Gamestop's of the world. Why do cater to their every need. Exclusive preorder dlc, not lowering price on digitally distributed software and further providing better sales than what we can find at retail.

It is practices such as these that make us skeptical towards what these companies are proposing. Plus PC's have a lot of competition now as to where you could buy software. I get better discounts from greenmangaming, amazon, gog, impulse (gamestop), etc on top of steam sales.

Not sure how the digital sales on consoles are going to work as far as competitive prices are concerned when you can only buy those games from psn (sen store), Microsoft store and Nintendo e shop.

They do it because they have to work them to sell their games as more games are still in retail than in download. But as that changes and reatail loses its power they will loose their sway aswell.

I just don't get it. They term them as the bad guys and yet cater to them as somehow they can't survive without them. Which is it though. If they go fully no used games than their relationship with retailers goes from 100% to 0%. There has to be some middle ground. Steam and pc distrubution took a chance and now you can't find many pc games in stores. 



Kantor on 29 May 2013

Your title was misleading: profits would go down with just the removal of used games. You need the 33% price cut to bring about the 18.6% rise in profits.

I've edited it to reflect the article more accurately.



(Former) Lead Moderator and (Eternal) VGC Detective

RenCutypoison on 29 May 2013
Kantor said:
Your title was misleading: profits would go down with just the removal of used games. You need the 33% price cut to bring about the 18.6% rise in profits.

I've edited it to reflect the article more accurately.

Thanks mod =D



thranx on 29 May 2013
green_sky said:
thranx said:
green_sky said:
EA also blamed the retail space for high pricing of software but on their own service Origin. They control the pricing and distribution. Yet the games retail for the same msrp as they would on physical media.

If the companies are so pissed at Gamestop's of the world. Why do cater to their every need. Exclusive preorder dlc, not lowering price on digitally distributed software and further providing better sales than what we can find at retail.

It is practices such as these that make us skeptical towards what these companies are proposing. Plus PC's have a lot of competition now as to where you could buy software. I get better discounts from greenmangaming, amazon, gog, impulse (gamestop), etc on top of steam sales.

Not sure how the digital sales on consoles are going to work as far as competitive prices are concerned when you can only buy those games from psn (sen store), Microsoft store and Nintendo e shop.

They do it because they have to work them to sell their games as more games are still in retail than in download. But as that changes and reatail loses its power they will loose their sway aswell.

I just don't get it. They term them as the bad guys and yet cater to them as somehow they can't survive without them. Which is it though. If they go fully no used games than their relationship with retailers goes from 100% to 0%. There has to be some middle ground. Steam and pc distrubution took a chance and now you can't find many pc games in stores. 


we're in a tranisiton period of them relying on retailers 100% to not at all. After this next gen reatilers probably wont matter much for video games. just like they dont for pc games



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Areym on 29 May 2013

It would still affect my gamefly subscription and borrowing from friends, so I am not down with that. Although that 33% price cut on games would be sweeeeeeeet.



"Trick shot? The trick is NOT to get shot." - Lucian

The Fury on 29 May 2013

Cheaper games is good but I'll miss buying games from my local games store.



Hmm, pie.

Fayceless on 29 May 2013

I seriously question their logic here. They make the rather odd assumption that people will spend more money on games if the price is lower. I seriously doubt that. The only way the amount of money going into the market changes is if they reach a more broad audience or eliminate used games sales (lowering the amount of money in the market)

But the big reason it will never happen is this: In order to make up for that price drop, every game would have to sell 50% MORE units to make up that money.

Also, you have to take into account the unchanging cost of materials, packaging, shipping, that goes into each individual unit. A 33% price drop cuts into profit margins, even if you move 50% more games to make up for it. If the cost is $4 per unit - what I could find online, that means a game has to sell nearly 60% more in order to make up the difference. Does anyone believe GTA IV or Super Mario Galaxy could have sold 16 million copies at $40? I certainly don't. Publishers won't go for it because they won't benefit from it, it will only harm them.



thranx on 29 May 2013
Fayceless said:
I seriously question their logic here. They make the rather odd assumption that people will spend more money on games if the price is lower. I seriously doubt that. The only way the amount of money going into the market changes is if they reach a more broad audience or eliminate used games sales (lowering the amount of money in the market)

But the big reason it will never happen is this: In order to make up for that price drop, every game would have to sell 50% MORE units to make up that money.

Also, you have to take into account the unchanging cost of materials, packaging, shipping, that goes into each individual unit. A 33% price drop cuts into profit margins, even if you move 50% more games to make up for it. If the cost is $4 per unit - what I could find online, that means a game has to sell nearly 60% more in order to make up the difference. Does anyone believe GTA IV or Super Mario Galaxy could have sold 16 million copies at $40? I certainly don't. Publishers won't go for it because they won't benefit from it, it will only harm them.

Its not odd at all. Its a very real and common practice for retail, because it works.



RenCutypoison on 29 May 2013
Fayceless said:
I seriously question their logic here. They make the rather odd assumption that people will spend more money on games if the price is lower. I seriously doubt that. The only way the amount of money going into the market changes is if they reach a more broad audience or eliminate used games sales (lowering the amount of money in the market)

But the big reason it will never happen is this: In order to make up for that price drop, every game would have to sell 50% MORE units to make up that money.

Also, you have to take into account the unchanging cost of materials, packaging, shipping, that goes into each individual unit. A 33% price drop cuts into profit margins, even if you move 50% more games to make up for it. If the cost is $4 per unit - what I could find online, that means a game has to sell nearly 60% more in order to make up the difference. Does anyone believe GTA IV or Super Mario Galaxy could have sold 16 million copies at $40? I certainly don't. Publishers won't go for it because they won't benefit from it, it will only harm them.

Why do you think people buy used games ? It's not because they like old things (well, maybe some), it's because it's cheaper.

If the hamburger cost half its usual price, won't you be tempted to take more ?