By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Microsoft Discussion - Retail Rakes it in after 360 Price Cut

kingofwale on 20 March 2008
mrstickball said:
NJ5 - thats my point. Retailers DO make money, and lots of it, off of the software. That's why they sell consoles at MSRP, even when they break even, or lose income.

 Mrstickball, do you have hard numbers to prove the fact they make upward of 20 dollars a game?

Because from what I see, (first handed), they make around 12-13% of the game price at most, so that's around 8-10 at most.



Soriku (Feb 10/08): In 5 years the PS3/360 will be dead.

KH3 bet: "If KH3 comes to Wii exclusive, I will take a 1 month of sig/avatar by otheres open a thread apologize and praise you guys' brilliance." http://vgchartz.com/forum/thread.php?start=50&id=18379
Original cast: Badonkadonkhr, sc94597 allaboutthegames885, kingofwale, Soriku, ctk495, skeezer, RDBRaptor, Mirson,

Episode 1: OOPSY!
selnor: Too Human I even expect 3-4 mill entire life and 500,000 first day. GoW2 ( expect 7 - 9 million entire life and over 2 mill first day), Fable 2 (expect 5-6 million entire life and 1.5 mill fist day) BK3 (expect 4 - 5 mill sales entire life and 1 mill first day).. Tales/IU/TLR should get to 2 or 3 million! post id: 868878
Episode 2:
Letsdance: FFXIII (PS3+360) first week in NA = 286K
According to pre-order rate in week 13 (post id: 2902544)
Around the Network
Paul on 20 March 2008

@kingofwale

You're funny, good thing the wii has so many accessories to keep you employed.



elnino334 on 20 March 2008
kingofwale said:
NJ5 said:
kingofwale said:
>Probably the games that are making $15+ that go with the systems that get sold...

my retailer (biggest in US when it comes to electronics) makes no profit in games either.

Unless you sell used games by ripping off little kids who traded them in...

So are you telling us your retailer makes no profit from being in the games business, save perhaps for accessories? ...

 


 exactly.  Accessories is what makes the most money for most retailers. They do make money on games, but not enough to cover their operating cost.


What do you think Gamestop decided to sell used games? That's how they make money


I guess is why MS just keeps throwing us those accesories sale numbers all the time



mrstickball on 20 March 2008

wale - I've seen invoice sheets from retailers (back when the X360 came out, to break down prices) - that stated that X360 games, at wholesale, were around $45 USD for a $60 USD game.

And if you look at the profit breakdown that Epic provided for profits from Gears of War, retailers made $12-15 per game on the X360.

Now, it could vary from store to store, with some making less due to lack of volume business...



Back from the dead, I'm afraid.

kingofwale on 20 March 2008
mrstickball said:
wale - I've seen invoice sheets from retailers (back when the X360 came out, to break down prices) - that stated that X360 games, at wholesale, were around $45 USD for a $60 USD game.

And if you look at the profit breakdown that Epic provided for profits from Gears of War, retailers made $12-15 per game on the X360.

Now, it could vary from store to store, with some making less due to lack of volume business...

 Remember, retailers have to pay for shipping fees, and other fees. realistically, that 12-15 dollars will be more like 8-10 dollars.

and that's before you even get the games to the store. 



Soriku (Feb 10/08): In 5 years the PS3/360 will be dead.

KH3 bet: "If KH3 comes to Wii exclusive, I will take a 1 month of sig/avatar by otheres open a thread apologize and praise you guys' brilliance." http://vgchartz.com/forum/thread.php?start=50&id=18379
Original cast: Badonkadonkhr, sc94597 allaboutthegames885, kingofwale, Soriku, ctk495, skeezer, RDBRaptor, Mirson,

Episode 1: OOPSY!
selnor: Too Human I even expect 3-4 mill entire life and 500,000 first day. GoW2 ( expect 7 - 9 million entire life and over 2 mill first day), Fable 2 (expect 5-6 million entire life and 1.5 mill fist day) BK3 (expect 4 - 5 mill sales entire life and 1 mill first day).. Tales/IU/TLR should get to 2 or 3 million! post id: 868878
Episode 2:
Letsdance: FFXIII (PS3+360) first week in NA = 286K
According to pre-order rate in week 13 (post id: 2902544)
Around the Network
mrstickball on 20 March 2008

What other fees, exactly? Last time I checked, shipping a huge box of lightweight games was rather cheap.



Back from the dead, I'm afraid.

kingofwale on 20 March 2008
mrstickball said:
What other fees, exactly? Last time I checked, shipping a huge box of lightweight games was rather cheap.

and then they have to ship them to every store individually? not to mention packaging. labeling, and high shrink number (people stealing them). And all of those are on top of normal operating cost

 

Frankly, that's why you don't see smaller stores just selling consoles and games at regular price, because it's just not profitable that way. If it wasn't for selling old games, Gamestop wouldn't be in business.



Soriku (Feb 10/08): In 5 years the PS3/360 will be dead.

KH3 bet: "If KH3 comes to Wii exclusive, I will take a 1 month of sig/avatar by otheres open a thread apologize and praise you guys' brilliance." http://vgchartz.com/forum/thread.php?start=50&id=18379
Original cast: Badonkadonkhr, sc94597 allaboutthegames885, kingofwale, Soriku, ctk495, skeezer, RDBRaptor, Mirson,

Episode 1: OOPSY!
selnor: Too Human I even expect 3-4 mill entire life and 500,000 first day. GoW2 ( expect 7 - 9 million entire life and over 2 mill first day), Fable 2 (expect 5-6 million entire life and 1.5 mill fist day) BK3 (expect 4 - 5 mill sales entire life and 1 mill first day).. Tales/IU/TLR should get to 2 or 3 million! post id: 868878
Episode 2:
Letsdance: FFXIII (PS3+360) first week in NA = 286K
According to pre-order rate in week 13 (post id: 2902544)
johntonsoup on 20 March 2008

When DVD Empire stopped selling games, they laid out a pretty good rationale that seems to be in line with what kingofwale is saying.

They claimed that they were making $5 margins on most games, consoles, etc. (without factoring in distribution costs).

Furthermore, because they were small compared to the big boys, they were not allowed to return an unsold game. So if they bought a $60 game when it first came out, they payed $55 for it at that time. When the producers dropped the MSRP to $40, they had no other option but to try to sell it.

Now, I know Best Buy and such make some money on advertisement spots and display deals, but I think it is true that the margins for the video game market are incredibly small.



Legend11 on 20 March 2008

According to Forbes retailers get about 20% of the price of a game.

Source:
http://www.forbes.com/2006/12/19/ps3-xbox360-costs-tech-cx_rr_game06_1219expensivegames.html



kingofwale on 20 March 2008

>Now, I know Best Buy and such make some money on advertisement spots and display deals, but I think it is true that the margins for the video game market are incredibly small.

Yes they do, but not in gaming.. at least not nearly as big as some of their TV display deals. Big retailers like bestbuy or Targets frankly have the whole gaming department in the red.



Soriku (Feb 10/08): In 5 years the PS3/360 will be dead.

KH3 bet: "If KH3 comes to Wii exclusive, I will take a 1 month of sig/avatar by otheres open a thread apologize and praise you guys' brilliance." http://vgchartz.com/forum/thread.php?start=50&id=18379
Original cast: Badonkadonkhr, sc94597 allaboutthegames885, kingofwale, Soriku, ctk495, skeezer, RDBRaptor, Mirson,

Episode 1: OOPSY!
selnor: Too Human I even expect 3-4 mill entire life and 500,000 first day. GoW2 ( expect 7 - 9 million entire life and over 2 mill first day), Fable 2 (expect 5-6 million entire life and 1.5 mill fist day) BK3 (expect 4 - 5 mill sales entire life and 1 mill first day).. Tales/IU/TLR should get to 2 or 3 million! post id: 868878
Episode 2:
Letsdance: FFXIII (PS3+360) first week in NA = 286K
According to pre-order rate in week 13 (post id: 2902544)