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Forums - Gaming - Can somebody breakdown the $60 price tag for a game and explain why in most cases physical copies are the same price as digital ones?

Screamapillar said:
aikohualda said:
there will be a law soon about this....

remember the price tag for digital vs paperback books? they used to be the same.....
so it is a matter of months hopefully not years....


A law against a publisher selling a game for a price that they want to sell it at? 

Last I checked, gaming was a hobby, not a necessity.

Give me a break...

so reading dan brown is a necessity?

it could be an antitrust issue....



 

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Goatseye said:
AnthonyW86 said:
Completely the opposite really. If they undercut retail prices systematically retailers will go berserk, and you still need retailers to sell your consoles.

Isn't that price fixing?


Only if you say it out loud. If your online pricing structure just happens to protect the sales of your retail partners... well, that's good business (until you no longer need your retail partners).



"The worst part about these reviews is they are [subjective]--and their scores often depend on how drunk you got the media at a Street Fighter event."  — Mona Hamilton, Capcom Senior VP of Marketing
*Image indefinitely borrowed from BrainBoxLtd without his consent.

Greed, pure greed. Thank god its not across the board as there are great deals on Steam, and a few on PSN, not sure about the others.



kowenicki said:
Goatseye said:
AnthonyW86 said:
Completely the opposite really. If they undercut retail prices systematically retailers will go berserk, and you still need retailers to sell your consoles.

Isn't that price fixing?


yes, its illegal.

I don't think so. They are just not going to offer new games cheaper digitaly than the retail copy's because they know retailers would go insane. It's pretty much the same with going digital, like with the PSP go.



http://www.gametrailers.com/videos/qba2o2/pach-attack--episode-111

Skip to 2:40 for Pach's breakdown.

As for why the price is the same:

http://www.youtube.com/watch?v=vuNcFbJDEqk&list=PL35B868008415DC30&index=58



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Profit, pure and simple. If people are willing to spend money on the convenience of a digital copy then publishers are going to charge full price. They get more per unit sale as there are no retailer, packaging and manufacturing costs plus it can't be re-sold, so they're incredibly happy charging full price. We get screwed but they get cash. Plus it keeps the retailers happy as they don't have to compete with low digital prices.

Of course the other side of it is the PC side, with Steam/Green Man Gaming sales where they sell an older game for a ridiculously cheap price in the hope you'll become a fan and purchase the next iteration of a franchise for full price (and more profit for that digital sale). Much more consumer friendly. Plus retailers don't care because they pushed consumers to digital by not stocking PC games anyway.



Outside or greed and profit. Perhaps there is an agreement with retailers not to launch digital releases cheaper.

The video game industry still relies on retailers to push their games. So I doubt retailers want to be undercut by cheaper digital prices.



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DamnTastic said:
The only thing that troubles my mind is why every new EA game costs €70 on the PSstore. And every new retail game of EA costs €65.
Not that I mind because I won't buy any...

I blame your country.

I'm not smart enough to explain why. But I know your country is doing something wrong that causes that.



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AnthonyW86 said:
kowenicki said:


yes, its illegal.

I don't think so. They are just not going to offer new games cheaper digitaly than the retail copy's because they know retailers would go insane. It's pretty much the same with going digital, like with the PSP go.

What are you trying to say is that consumers are not getting better deals because publishers don't want a quarrel with the retailers. And they're purposely keeping the digital prices up so them and the retailers can profit.

"Price fixing is a conspiracy between business competitors to set their prices to buy or sell goods or services at a certain price point. This benefits all businesses or individuals that are on the same side of the market and involved in the conspiracy, as prices are either set high, stabilized, discounted, or fixed."- Free Advice: Law.

-http://business-law.freeadvice.com/business-law/trade_regulation/price_fixing.htm



It's not price fixing unless there is a communicated agreement. If everyone does the same thing simply because that's how things settle out, then it's fine. Everyone charging $60 for a new game, for example.

The answer to the first part of your question, about why digital games cost full price, is simply that the market seems willing to pay it. That's all. Capitalism in pure form. Bringing ethics into it really doesn't serve a purpose. In an ideal scenario, the consumer base wouldn't support full price, but that doesn't appear to be the case.

The second question, however, seems to imply that digital and retail should have the same cost structure over time, which really doesn't make a lot of sense. The two things are very different and there is no real reason why digital prices should fall like retail prices. Retailers have money tied up in inventory, money which they need to roll over into more inventory. In any retail business, almost everything you make goes right back into stock. That's your life's blood. In that sense, old, slow-moving stock is wasted money, as it could serve you better if invested into another product. Likewise, it's taking up space, both on shelves and in storage, that could be used for product with better flow. With that in mind, it makes sense to liquidate old stock. Sometimes a retailer can ship back unsold product, if there is a lot, but it's more likely that the manufacturer will given them credit against it, so they can sell it at a cheaper price-point. After that, stock of that product will be kept to levels that mirror demand, which can be easily tracked and automatically adjusted. If those items aren't moving at all, then they won't be stocked, so it is necessary to given them a price that results in sell-through. Inventory equates to money invested and requires money to maintain.

None of this is true of digital, at least to any real degree.

In my opinion, the better digital structure would be a lower initial price, then the publisher could use some kind of model that drops the price a tier as demand diminishes. Trying to match it to what retail is doing just seems artificial and impractical. They might already do the second part, but they're going to need a clear message from consumers before they do the first part.