Jimquisition: Don't Charge Retail Prices For Digital Games

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hawk533:

Qitz:
For dual release, digital and retail, the price difference between the two will never happen since the retailer will complain about it and just not stock the game which will result in huge profit drops for them.

But if the stores refuse to stock the title (especially if it's a popular game) they'll end up losing out too. And every digital sale results in a higher profit margin for the publisher than physical sales so it's to their benefit to drive consumers to the digital download.

True, but the retailer doesn't rely on just that game sale to get buy, where as Developers do. They need to make a profit to keep the Publishers pleased and not get scrapped to recover the costs of the development. So while it is lose / lose, it's not as huge a loss for the retailer.

While Digital sales may put more money into the pubs pockets than retailers, you can see how man people here don't want full on DD because of bad internet / want for a physical media or what not so they're not at the pinnacle point of Digital being more reliable than physical. Once that happens though, I can see more and more publishers getting a half-working brain and lowering digital prices to get greater profit.

Another bamboozling case is Diablo 3. I currently have it pre-ordered through Game for 32.99. Blizzard are charging a whopping 45 for the digital edition. That's nearly 50% more.
It's enough of a price gap to cause my brother to not buy it. His Mac's CD drive is busted, but he's not goin g to pay out an extra 12 to get a digital edition.

I don't mind some digital distribution. I can handle not owning the physical copy if in cases like Steam or GOG the price is often significantly cheaper. Why, for example should I buy Prototype 2 for 50 on PSN, when I could go to say, Game or Amazon for 10-12 less, then sell it back later and re-coup some of the loss when it turns out to be bland and samey like the first one, it boggles the mind.

Not to defend the publishers (furthest thing from my mind), but I've never really seen this argument brought up:

The big publishers are all trying to build their own digital distribution platforms, because none of them want to give a percentage to Steam or GOG or Amazon or whoever. But then they realize even though in theory digital distribution should be cheaper than physical, it actually has costs they probably didn't have to deal with before. With physical games, GameStop, Wal-mart and the other retailers take on the cost of storage, shelving, and some of the front-line marketing, customer service, complaints and most importantly, customer cash transactions.

When a game publisher creates a digital distribution platform, they go from being a publisher who lets dedicated retail businesses sell their content, to a bona fide online retailer. Which puts them on the hook for:
i) Server farms to store the content and customer data
ii) Bandwidth for the downloading of content
iii) applications to handle secure online retail transactions
iv) the technical and customer service expertise to run an online retail business
v) the legal advice to handle retail transactions pretty much anywhere in the world

Now, the major publishers might have some transferable expertise from running online multiplayer servers and such, but I think most of the applicable expertise of online retail has until recently been held by the hardware manufacturers (MS/Sony/Nintendo) or those who threw their hats into digital distribution early (Valve, GOG, Games for Windows, etc.). So the publishers have probably been blindsided by how expensive digital distribution actually is and are keeping the prices high as a result.

What the big publishers actually need to do is:
i) Accept that they're not cut out for the retail business, and learn how to do business with Valve and Amazon et al the same way they did with GameStop and Wal-mart, or
ii) Understand that Valve and the other early adopters were able to get away with mistakes early on because they had little competition. If they want to be successful online retailers, they should use the advantage of the late adopter and learn from the early adopters' mistakes without making them all over again yourself, but also realize that building the infrastructure in the first place is going to be really expensive at first. But if they don't build platforms at least comparable to Steam, why should anyone take them seriously?

Is there something to this, or I have completely missed the boat somewhere?

God, I wish there was a way to remove Jimquisition from my latest videos page.

1nfinite_Cros5:
This is why I refuse to buy Skyrim on Steam. The bloody game is STILL at $60. I always wait for Bethesda to release a Game of the Year Edition so I can at least get everything. Buying one of their games at launch is never good news to me.

Their games would be well worth $60 at launch, if their games actually worked at launch.

I've been saying this for years: that the industry needs to get a better pricing structure in place. Especially if they want to sell more new games. And this isn't just for digital distribution (but for that they should at least discount the bare minimum of the cost of packaging the disc, transporting it to the store, and everything) but the retail stuff too. It's hard to take their cries about used sales seriously when everything is priced at $60.

relevant captcha: roll over
They'd like us to.

Having just pre-ordered a physical copy of Diablo 3 from Amazon for ~15 cheaper than the digital copy offered by Battle.net, this video seems all the more relevant.

With the $60 price in retailers, I can almost, kind of see where some publishers might be coming from, even though I think it's ludicrous... DIGITAL distribution at the SAME PRICE, however, is UNACCEPTABLE!

1nfinite_Cros5:
This is why I refuse to buy Skyrim on Steam. The bloody game is STILL at $60. I always wait for Bethesda to release a Game of the Year Edition so I can at least get everything. Buying one of their games at launch is never good news to me.

I got it for the equivalent of $35 on a random Steam discount one weekend in January.

I have a feeling that we might see another discount around the time that the new dlc comes out later this Summer.

Frankly, it's fucking embarrassing that a journalist has to actually tackle this issue. This is below Jim Sterling. These are the kind of concepts I would be shocked to find a kindergarden class to not grasp. I don't even know how this industry got so far up its dirty ass. I'm leaving to get a drink because this level of stupidity is going to drive me into a depression.

Wait? $60? Not $80-$100?

Grrr.... Australia! At least PC games can be imported.

It's sad that any of this needs to be said. The price ought to reflect real world factors, thus cheaper digital purchases. Love you too, game industry >.<.

Also, it's pronounced 'Goodler.'

Slightly off topic, what is that game at 2:43?

On topic: yeah, digital distribution has screwed up pricing.

There is also this one funny thing about EA's pricing model on Origin. Considering that Euro is a stronger currency than US Dollar, how come I should pay 60-70 Euros for game priced 60 USD on lunch day?

And on a side note to those complaining about Skyrim on Steam: there have been 3 discounts I remember since Christmas and at least one of them was 50%. I would have liked to make use of that, however Skyrim is not even available in my region on steam and for 40 Eur (52 USD) on retail.
I just wanted to complain about that for some time, so there.

On a 60 dollar game, the average AAA game will make about $27 profit at retail for a publisher. If digital distribution is cutting out the retailer and giving us direct access to the games via the publisher, the price should be set around there. You're still making the same amount as you would at retail, and your digital system is more accessible and attractive to consumers.
TLDR; PUBLISHERS MUST LISTEN TO JIM STERLING

Yeah normally I'd defend greedy publisher decisions by saying, "there a business, they'll do whatever makes them the most money". And that's probably what they're thinking when thye make these prices. And while that may be true in the short term (and I'm even iffy about that), I think it will most definitely be losing them more money in the long term.

Say if you priced new AAA games at $50 instead of $60. You'd probably be making the same amount of money (wild guess on my part), but what you'd be doing is acclimatizing people to online transactions. Soon people will say "it's cheaper and more convenient, so I'll just do that". And the thing about the digital copies, no re-sale. And that means no used game problem. and if that's as big an issue as you say it is, then in the long run you stand to make way more money.

hawk533:

Qitz:
For dual release, digital and retail, the price difference between the two will never happen since the retailer will complain about it and just not stock the game which will result in huge profit drops for them.

But if the stores refuse to stock the title (especially if it's a popular game) they'll end up losing out too. And every digital sale results in a higher profit margin for the publisher than physical sales so it's to their benefit to drive consumers to the digital download.

The real big issue is for multi platform games

Say Activision wants to sell MW:whatever for 45 dollars on steam, but Gamestop doesnt want to be undercut, they wont just say "Fine we arent carrying your PC version!" they will say "You are undercutting us with another retailer, we are not stocking PC, Xbox, or PS3 versions."

That is why pure PC games do release more often than not with much smaller price points than games with console players in mind.

It is very important to note that they can try to drive all they want, but not everyone is capable of getting a PC to take advantage of digital distribution, as far as I know it is impossible to buy Gears of War, Modern Warfare, Skyrim, and Uncharted for the Xbox or PS 3 respectively through digital distribution.

When the next generation of DD game consoles are released we will likely see a heavier push. Because then if Gamestop whines and says they wont stock the game in their stores they can go "lol fuck you" and get people to buy it on their boxes.

Aircross:
Big companies using their monetary power to stall progress that would improve how things work.

JEEZ, WHERE HAVE WE SEEN THIS BEFORE?!

History sure does love to repeat itself many times.

Captcha: hot-blooded, how fitting.

The thing about it this time that separates it from previous incarnations is that it would actualy be more beneficial to the buisness. Usually when powerful companies do this kind of thing it's because they will make more money if people are denied this item, service, whatever. But in this case game publishers have in there grasp a way to end the problem of used games and they are choosing not to take it.

MonkeyPunch:
Well I can't imagine that there's any intelligent counter argument to this...

Its hard to make an intelligent counter argument against the ramblings of a mad man who doesnt understand basic economics. Mostly because they dont understand what the fuck you are talking about due to knowing nothing at all about what they are arguing.

Falseprophet:
But then they realize even though in theory digital distribution should be cheaper than physical, it actually has costs they probably didn't have to deal with before. With physical games, GameStop, Wal-mart and the other retailers take on the cost of storage, shelving, and some of the front-line marketing, customer service, complaints and most importantly, customer cash transactions.

When a game publisher creates a digital distribution platform, they go from being a publisher who lets dedicated retail businesses sell their content, to a bona fide online retailer. Which puts them on the hook for:
i) Server farms to store the content and customer data
ii) Bandwidth for the downloading of content
iii) applications to handle secure online retail transactions
iv) the technical and customer service expertise to run an online retail business
v) the legal advice to handle retail transactions pretty much anywhere in the world

i) Servers plus personnel to maintain them are pricy, but a sunk cost. They're paying for them once, and they're doing it anyway alongside retail.

ii, iii) Bulk Bandwidth like those server farms use is incredibly cheap per gigabyte. Likewise, the frameworks the stores run on are a solved problem.

iv) Clearly you've never dealt with customer service for an online store. "Expertise" isn't in high demand. Mostly, you're going to be dealing with just-above-minimum wage script-readers.

v) They're paying for that either way with the box copies, plus most of the digital stores don't serve the entire world, instead limiting to certain geographic areas.

Compare that with all of the things you neglected to calculate in the retail/physical side: Mastering and producing the install media. Printing, assembling, and packing the packaging. Physically transporting the product to the retailers. That adds up to a lot of coin.

Don Reba:
God, I wish there was a way to remove Jimquisition from my latest videos page.

You could... you know... not click on it. Just a thought.

FelixG:

The real big issue is for multi platform games

Say Activision wants to sell MW:whatever for 45 dollars on steam, but Gamestop doesnt want to be undercut, they wont just say "Fine we arent carrying your PC version!" they will say "You are undercutting us with another retailer, we are not stocking PC, Xbox, or PS3 versions."

That is why pure PC games do release more often than not with much smaller price points than games with console players in mind.

It is very important to note that they can try to drive all they want, but not everyone is capable of getting a PC to take advantage of digital distribution, as far as I know it is impossible to buy Gears of War, Modern Warfare, Skyrim, and Uncharted for the Xbox or PS 3 respectively through digital distribution.

When the next generation of DD game consoles are released we will likely see a heavier push. Because then if Gamestop whines and says they wont stock the game in their stores they can go "lol fuck you" and get people to buy it on their boxes.

You can actually buy games from Xbox Live (it was implemented a while ago, but I'm not sure if it's available at the same time as retail) and I'd assume the PSN works the same way. The whole system is still fairly rudimentary, but it is there.

When they were selling the digital deluxe version of ME3 for 80 dollars, all I could think of was, "really?". That's beyond insane. There is no justification for charging that much when all it costs them is the bandwidth to distribute it. It's like they're trying to desperately pretend that Steam does not exist with Origin.

However, it's hardly only the videogame market that's desperately clinging to the physical market. All these media industries are afraid of losing their exorbitant and aging business models.

I do wish that Nintendo would learn as well. I think their NES and SNES era games are still way to expensive on a store that might not even carry over to their next console.

Jim. Please stop making so much sense. You make everyone else look bad.

This same problem exists with e-books as well (I know with e-books, digital distribution maximally cuts about 30% off the price of publishing a book; yet, you will find many e-books priced more than their physical counterparts. Go figure that one out.). I don't think it's a problem of arrogance on the part of the game publishers. I think it's just ignorance and incompetence. The executives in charge of content publishing, in general, simply prove to be ignorant of technology and how to use it, and they prove to be incompetent when it comes to actually understanding the market they are trying to serve and finding profitable ways to serve that market in a manner that ensures the loyalty and satisfaction of that market. They're just idiots, and they have no adaptability to changing market conditions.

Really, I think the only way to change the situation is for the old guard to just go out of business, and a new, younger guard, one that does understand its market better and has fresh ideas, rise up to take its place. Sometimes, for evolution to progress, you have to hit the planet with an asteroid and kill off all the dinosaurs. The game industry needs a serious hard crash, just like in the 80's.

Personally, I've been losing all interest in video games as of late. There's just too much bullshit and too little quality, creative diversity, and emotional spirit in today's games to make video gaming, as a hobby, worth the investment of time, effort, and money. Back in the day, it was not unusual for me to buy 2 games in one month, averaged over 6 months. Now, I barely buy a game every 6-8 months, averaged over 5 years. It's just not worth it anymore.

[bah. Error post]

What, you expect capitalist companies to behave like capitalists in a capitalist system instead of demanding the market change? Sorry, somewhere down the line capitalism became corporate overlords whining and demanding special privilages.

It is sad this needs to be said as even older games on PSN still go for full price. I was pricing out PSP downloads and saw games for $40 I got for $15, or even $8 at gamestop with the white stickers (meaning not used). I'm not a fan of going all digital, but shit like this doesn't even make it tempting as I have to deal iwth all the crap that comes with not actually owning the game for the price of owning the game. I get they don't want gamestop to go away completely as systems and controllers need to be sold somewhere, but this basically begs me to buy used.

PS, forget the Hitler thing. You'd look dumber in that moustache than he did.

Weresquirrel:
Another bamboozling case is Diablo 3. I currently have it pre-ordered through Game for 32.99. Blizzard are charging a whopping 45 for the digital edition. That's nearly 50% more.
It's enough of a price gap to cause my brother to not buy it. His Mac's CD drive is busted, but he's not goin g to pay out an extra 12 to get a digital edition.

Thought about Diablo 3 the moment I saw the thread. I was in joy when I saw they were releasing a digital download. "Hurray" I thought, "A cheap and easy way of getting it".
Almost made me spew my coffee out on the screen in shock when I saw it was 59,99 euro For normal edition!

Btw, if your brother is really sad. He could just buy a physical copy and enter the game-code and digitally download it (and much cheaper, logical?).

Another thing along this vein that really gets under my skin is the death of manuals. I mean, PC games USED to have awesome manuals, but even Console games used to have manuals, and they were considered a valuable part of the package - you were charged up the ass if you ever lost a manual in terms of game rental and resale value. Why is it cool now to not even make them? the last 3 games I've gotten (Mass Effect 3, Mortal Kombat, Gears of War 3, and most aggregiously, Starcraft 2, Blizzard being the king of the awesome manual era of PC gaming) have all 3 not had a manual. Game boxes feel empty without them. Why are they going away? Should we not in turn charge them up the ass for basically "losing" the manual for the game they're trying to sell us?

Why are they doing this? I mean, even if you don't like manuals, even if you're some crazy bint that thinks they're a waste, was that such a universal observation that we needed to do away with them all together? the boxes still have manual clips in them. It seems silly, and a bit of a slap in the face to sell a game with nothing but an advertisement and an online pass in the place of a manual.

And don't get me started on fucking advertising in games. Big Corporations in general seem to have forgotten that advertisement usage is an alternate form of payment - we're paying with our time and attention watching ads. Don't put ads in things that you're charging for, unless you're positive the person on the receiving end is going to want to see it (I'm all for, for example, Microsoft advertising Dollar Gold months on the live dashboard). Don't add extra advertisements to things we're already paying for and then have the audacity to sell them like a feature "buy our ads! they're ad-tastic!".

Edit: and Oh yeah, they're not even selling manuals to their old games. I bought a physical copy of Starcraft/Brood War, hoping to get a new copy of Starcraft's awesome manual. No dice, seriously, wtf.

So, people are saying that if publishers price their digital games lower than retail, retail won't stock them. Since this seems to be primarily for PC games, I say... so? Isn't PC at retail all but dead? The amount of people who got to a store to buy PC games is very, very few. Most use Steam now.

If Sony can charge less for their digital Vita games and have stores still stock the physical copies, I don't see why publishers can't do the same with PC games.

Besides, PC gaming at retail died completely, would it really make much of an impact? Is the retail PC games market really such a huge market that they won't risk losing it? Considering PC sections in retailers are really small and out of the way and getting smaller, I highly doubt it.

Alcamonic:

Thought about Diablo 3 the moment I saw the thread. I was in joy when I saw they were releasing a digital download. "Hurray" I thought, "A cheap and easy way of getting it".
Almost made me spew my coffee out on the screen in shock when I saw it was 59,99 euro For normal edition!

Btw, if your brother is really sad. He could just buy a physical copy and enter the game-code and digitally download it (and much cheaper, logical?).

Arr, I suggested that to him. The other alternative is that he has friends who work in an electronics store, he was going to see if he could borrow their external CD drive they use for netbooks to install it.

Next thing we know publishers will make digital versions cheaper... by making physical copies more expensive.
From their point of view it makes sense.

As far as the statement that they cost different to distribute, and should therefore be priced differently, this is just wrong. It's an argument that I see for piracy as well. The premise is false. You are not buying a disk and a box. The cost of the disk, imaging it, and packaging it is maybe maybe $1 ea. You are buying a license, and the aggregate distribution costs are incorporated into that price.

It isn't like digital distribution is 100% free, either. They have to pay for servers, maintenance, bandwidth, merchant accounts, etc.

Did it ever cross your mind, Jim, that maybe publishers keep the prices the same for customer equity? What if I don't have the bandwidth or usage cap for periodic 3-6gb game file downloads? What if I don't have the hard drive space to store/install them? I need to pay more because I prefer a disk? I imagine that a price disparity such as you suggest would bring about a lot of consumer backlash.

I think you have a valid point with the $60 price point overall. It isn't that one distribution method is priced this way, it is that any distribution method is priced this way. Fight for a lower price point altogether, but singling out just one is going to get you serious backlash from the other.

It used to be that PC games where $50 at launch while the console counterparts where $60. Whatever happened to that model?

The whole entertainment pricing scheme, outside of music, sucks. During the great depression the film industry thrived. Not even 30 years ago $10 (adjusted for inflation) would provide hours of entertainment at either the cinema or the arcade... with snacks and beverages! Now the commercial visual arts waxes and wanes with the disposable income of a nation's population. The only reason why gaming grows is that there is room to grow. If it had the same market saturation as cinema, it would be shrinking just like cinema.

I've been wondering about this subject ever since I began buying digital almost exclusively, with special editions for certain games and rare retail deals being the exception.
I understood that the reason for the situation being what it is probably the fear of retail stores banning publishers and the publishers not having the balls to challenge the retailers' threat.
The current solution seems to be the discount sales.
I don't buy a game until I can get it at a price I find justifiable and sometimes if a game's price doesn't drop and it doesn't get a sale for some time I lose interest in it, which is a money save for me and a lost sale for a greedy publisher.
I hope others are doing the same, so publishers will understand that we value our money and won't throw away 50$ for just any game. Don't get me started on 60$ games.

Steam is not the holy grail of digital distribution. Stop praising it.
Steam deals / daily offer etc. are cony-catcher. These offers are there to convince you to cash in now because otherwise you lose out on a supposedly cheap deal. In the end many people will therefore buy more games, more often and even games they usually wouldn't pick up. In the end many will spend more money on Steam for games they don't even play. At the same time it increases acceptance of the service leading even to more full price sales.
It is like the F2P model of many MMOs. Many people will in the end pay more to play F2P than they would have paid subscription fees on an P2P MMO.
If a game is not on such a special offer it still cost as much or even more than retail.
No Steam is not cheaper.

This could be applied to how just 1 or 2 years ago pc games were for the most part always 10 dollars cheaper since devs and publishers didn't have to deal with licensing fees on consoles, but nowadays they're just as expensive as console counter parts for no justifiable reason other than publishers wanted the extra 10 bucks.

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