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Forums - Gaming - Retail vs Digital margins

From Ubisoft's conference call, we learned that they take a 55% cut from retail SW and 70% from digital (95% if it's their own service, uPlay).

Using an example, in a 60 dollar game bought on PSN:

Ubi takes 42 dollars, while Sony takes 18 dollars.

60 dollar game bought at retail:

Ubi takes 33 dollars. Retailer takes 15 (25%) and Sony/MS the remaining 12 dollars.

 

Things are different in EU of course, due to VAT. Let's do the same exercice in a country with 23% VAT

Third party games cost 70€ in EU.

0.23 x 70 = ~16€ goes to the Gov./taxes

I'm assuming the aforementioned percentages only come into play after this deduction; makes sense. So a 70€ game becomes a 54€ game.

Digital:

0.7 x 54 = 37,8€ for Ubi, ~16€ for Sony/MS

Retail:

0.55 x 54 = ~30€ for Ubi, 13.5€ for the retailer, ~11€ for Sony/MS

Now for the cases of first party games, usually 60€ instead of 70€.

Retail:

0.23 x 60 = ~14€ goes to Gov./taxes. Left with a 46€ game.

From that 46, retailer gets 11.5, and the remaining 34.5 go to Sony/MS.

Digital:

Assuming it works the same way as Ubi and their uPlay, Sony/MS take 95% of those 46€, which is ~44€. The rest (~2)is related to CC and service fees.

 

TL;DR:

(these are all rough estimates and bound to vary in some cases, specially because euro value is affected by different VAT in different countries)

Third Publishers take 33 dollars/30 euros from full priced games sold at retail, while the console manufacturer takes 12 dollars/11 euros, the rest goes to retailer.

Third party publishers take 42 dollars/38 euros from full priced games sold digitally, the console manufacturer gets 18 dollars/16 euros.

First party games net the company 57 dollars/44 euros digitally, 45 dollars/34 euros at retail.

PS: further variance comes from the fact that apparently not every company takes the same cut, as EA said they take 60% from digital instead of Ubi's 70%.



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And even with bigger percentage and less costs (print, pack and distribute) they release for the same price and some people still think I should accept to be with only the data on the internet and pay the same price.



duduspace11 "Well, since we are estimating costs, Pokemon Red/Blue did cost Nintendo about $50m to make back in 1996"

http://gamrconnect.vgchartz.com/post.php?id=8808363

Mr Puggsly: "Hehe, I said good profit. You said big profit. Frankly, not losing money is what I meant by good. Don't get hung up on semantics"

http://gamrconnect.vgchartz.com/post.php?id=9008994

Azzanation: "PS5 wouldn't sold out at launch without scalpers."

This is why digital games should always sell for a lower amount, they shouldnt milk people for a digital game, but aim for same profits earned on each unit (digital vs retail), but have digital be the cheaper option.

Consumers win (cheaper games) and developers earn the same as a physical sold copy, and help promote a digital age.

 

I ll still be that sucker that buys most things physical though.



I get most physical games for the same price or cheaper than what it is listed as digitally. Easy choice for me.



Ergo, buy physical. Better value for your money and isn't instantly worthless on purchase.



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Ka-pi96 said:
Roronaa_chan said:

From Ubisoft's conference call, we learned that they take a 55% cut from retail SW and 70% from digital (95% if it's their own service, uPlay).

Wait, how does that work? Where does the other 5% go?

Probably to Amazon or Microsoft or wherever they rent their cloud space / traffic.

Edit: Google Cloud Storage

https://cloud.google.com/customers/ubisoft/



Ka-pi96 said:
Roronaa_chan said:

From Ubisoft's conference call, we learned that they take a 55% cut from retail SW and 70% from digital (95% if it's their own service, uPlay).

Wait, how does that work? Where does the other 5% go?

CC and/or service fees



Ka-pi96 said:
Roronaa_chan said:

From Ubisoft's conference call, we learned that they take a 55% cut from retail SW and 70% from digital (95% if it's their own service, uPlay).

Wait, how does that work? Where does the other 5% go?

The server upkeep costs? electristity & maintaince & bandwidth costs?