Jimquisition: Don't Charge Retail Prices For Digital Games

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Prices are based on Value.

The ability to download a product instantly at any time without needing a drive creates a lot of value.

Frankly Retail and Digital produce very similar amounts of value, so they should be priced about the same.

Now if a developer could find a way to price discriminate based on a rural vs urban they could charge rural customers more for digital, and urban customers less for digital. Getting the best of both worlds and maximizing profit.

Zachary Amaranth:

Denamic:

Basically, it's ripping you off just because they can.

It's not ripping you off if you willingly pay.

Well the term "ripping you off" is subjective. It's how the consumer feels about the price. So if you pay $100 for a game and love it enough for it to feel worth that price then you are not ripped off.

On the other hand you can feel ripped off on something you were willing to pay in certain circumstances. For example if the product you bought is not performing as you thought it should. For games this would be a game that feels unfinished or buggy, like it's a beta build. A more real world example would be buying a car that you thought was new but it breaks down after a week.

Silently stroking a plush Kirby like Dr. Evil was good for a laugh.

It would have been nice to see some solid industry math on the exact cost difference between digital and retail distribution. Sure, digital probably is significantly cheaper but backing it up with some math from a reliable source would turn this from commentary into journalism. A missed opportunity.

Zachary Amaranth:

It's not ripping you off if you willingly pay.

So true and i will never understand people who support this kind of shit. I´ve to admit i stepped in a few DLC traps myself but throwing out 60 bucks is on a whole different level.

I hope that retail versions won`t extinct anytime soon. As long as people are stupid enough to pay this much money for digital copies nothing will change. The way things are going it`s a matter of time, then it`s "bye, bye console...hello pc" which comes with a whole different world of trouble, yay.

Ah, enough whining in this thread from me, i`m going back to enjoy games (as long as i can...).

@Jimothy Sterling
Don´t do the Hitler, man. He lost in the end. Comparing yourself with a Looser isn`t such a good idea even if you want to be a "good" one.

side note:
Saying "Ich danke Gott für den Führer" sounds fucking funny in this context but it would give me a big bleeding in my country.

Well, again I'm going to address you directly Jim.

I think your criticisms overlook the truth of the matter, which is simply that gaming has become a cartel. Basically the game industry coordinates prices, and sets the $60 price range regardless of the cost to make a game in order to kill competition. That way everyone gets to make huge amounts of money, and the whole principle of American business.. competition forcing companies to release the best possible product at the lowest possible price, is undermined. This price setting, combined with market coordination (changing release dates so big titles tend to not go head to head.. the release of a Modern Warfare for example will see other games be pushed forward or back), as well as contributing to the industry being able to release buggy messes and fix them later, since coordination means everyone is doing the same basic thing so you can't really say "this guy charges less money, and produces a better product".

Price fixing is price fixing, the whole idea is to prevent anyone from undercutting anyone else, which is why the $60 price tag remains on digital games. The industry as a whole basically figures that if they stick with the $60 price tag, they can pocket all the money they save on packaging and distribution as pure profit. They figure retail is doomed all on it's own due to their other schemes (retail copies actually being digital copies that install through steam, DLC, etc..) and all they have to do is stick to their guns on the price and they can keep the same model in force.

The promise of lowering prices through digital distribution is simply BS to us rubes to sell the new system.

The reason why those who want to break this system, or claim to, typically do not do so, is because they have to worry about the pressure from the rest of the industry, which is what makes it a cartel.

On a lot of levels it's the same exact thing that oil companies and other big businesses do, even if they aren't supposed to, it's just that the games industry has yet to get govermental attention.

Now, you and others are probably sitting there going "Wow Theru, that is a borked conspiricy theory" but understand that when it comes to pricing we've seen many cases where people have spoken for what the entire industry is thinking. We also saw annoucements of the price of games raising $10, which happened universally (as opposed to with a few companies) which itself shows coordination. In addition things like the GDC (Game Developer's Conferance) and other meetings also seem to be where publishers and executives get together to discuss and set industry wide policy that is going to benefit everyone in the business. It seems to be after meetings like that, that we see annoucements like "games are going to be hiked another $10".

I've been of the opinion for a while that we won't see anything close to industry reform as far as prices go, unless some major goverments with anti-cartel policies drop the punk hammer on these guys. In the case of the game's industry they aren't even subtle, they wouldn't even need to do the kinds of investigations you see being made on oil companies. Some of the annoucements about 'what the industry is discussing' is pretty much the wet dream of what some investigators wish Oil or Drug companies would do.

A Cartel is more or less the same thing as a Monopoly in the final equasion, the differance being that in a Monopoly one person totally controls something, with a Cartel all the people in a given business coordinate to achieve the same kinds of results. In the games industry you even see the behavior of the big companies snapping up all the independants who could compete with the Cartel. While unrelated to cartel behavior directly, we even have violence and strong arm tactics being employed, looking at what happened when Activision closed Infinity Ward for it's own purposes (ie a security raid).

Agree or disagree on the specifics, the bottom line is that unless the industry starts competing and we start seeing big titles going head to head more often instead of release dates being adjusted, and publishers trying to release better products for less money, nothing is going to change, and really the industry has no interest in doing this on it's
own since people will pay those prices when given no choice. It's not like the heavy hitters like EA and Activision actually have any motivation to change the system, after all they both make millions and billions of dollars each year with the prices set the way they are, their rivalry being mostly words, they don't do much against each other as far as prices or anything, they just shuffle release dates around, and make enough money where guys like Bobby Kotick can have a private jet, and could probably roll cigarettes in $100 bills if he wanted to.

Jimothy Sterling:

I understand it perfectly, but part of the point of these videos is to highlight to consumers that they *should* demand better and not be so willing to pay. I don't think that's a failure on my part, more like a plea for long-term common sense.

You said yourself that people will wake up and not pay. I am trying to help that move alone, while also appealing to the industry to secure against that long-term eventuality by being competitive NOW. They want digital to take off, but the market demonstrates that you only really beat a rival when you offer better. Right now, the publishers aren't offering better.

Well I think this is the first time I have seen an author read comments, which I think is fantastic.

I also think I slightly misunderstood some of your video Jim, as your comment here sums up my thoughts completely. Customers do need to wake up and realize they have the power to dictate what a corporation does, but it isn't with protests or cupcakes. It's with their wallets.

I think trying to convince companies to change before sales start falling is a waste of breath, but hopefully there will be some visonary in the future who sees the advantage theyc an gain by being first on the bus.

Also I wanted to mention I really enjoy your shows. The past 4-5 have been fantastic. It's nice to have something to look forward to on the Escapist.

Sande45:

Blade_125:
Jim fails to understand (or maybe never took) the first rule of economics.

Everything is worth what the buyer is willing to pay.

He has valid points, but I can promise you that a company does not continue with a bad practice that loses them money. If digitally priced games are put at that level, its because enough people buy them at release to make it profitable.

Jim didn't say their current digital distribution system isn't profitable. It just would be about bazillion times more profitable if they lowered the prices by five bucks or so, you know, to give ANY incentive to buy digitally.

Here's the 386th rule of economics: You don't just find a price point where it is profitable, you find the price point where it's the most profitable.

That is pretty much what I am saying too Sande, it's just that based on what I know of companies and econmics, they are making enough in sales right now that they don't feel a $5 price drop would increase sales enough to justify the lower price and create more profit. That could be wrong, but the only way any of us are going to drive the change is to not pay full price.

If I was a publisher, and people bought digital copies of the games at the same price point as they did the retail copies, why would I lower prices. Economically, you aim to sell your product at its point of maximum profit, and if decreasing your prices doesn't increase sales to the point where you make more money than you would if you left it at its current price, there is no reason for anyone to lower prices just because costs are lower. You just take the extra profit.

Now, I refuse to buy digital myself, but for those people who will, I'd like to know if there would really be a huge initial increase of sales if a minor price cut is made at launch. I doubt it myself, because I will gladly pay $60 if I think a game is worth that much, and if I don't, it won't make a difference to me if it is $55. Unless that five dollars makes a real difference, don't expect to see any discounts for digital. It's just bad business strategy.

Eric the Orange:

Blade_125:
Jim fails to understand (or maybe never took) the first rule of economics.

Everything is worth what the buyer is willing to pay.

He has valid points, but I can promise you that a company does not continue with a bad practice that loses them money. If digitally priced games are put at that level, its because enough people buy them at release to make it profitable.

Personally, I think eventually people will wake up and stop paying these prices. There are so many games to chose from that many people will wait for a sale. Look at the crazy deals that pop up on steam. I see fairly big releases going for $20 less within a few months of release. It is a pretty rare game for me to buy on release now (last one was Arkham city). I wait for a sale on steam, or at bestbuy for a console game. If publishers want to cut out the middle man they need to price accordingly if they want to see their sales increase.

Ah but the crux of the argument here is that by lowering the digital price, they will paradoxically make more money in the long run. What it boils down to is that digital releases cannot be sold back. Thus digital games get rid of the "used game problem". Which by the developer accounts is costing them tons of money.

This is the most I have been quoted in any article (and even by the author no less).

The only way the make more money is if the price drop will increase sales so that overall profit is higher. I can't say for certain if that would happen right now, but as I have said a few times now, the only way we can push companies to do this will be to not buy games at full price.

I do agree on the used game issue. Companies are trying a different approach by taking away the option to buy used, therefore forcing more people to buy new and giving them more profit. A rather underhanded tactic to say for sure.

Of course I don't bother buying used games as they are usually $5 less than a new game (at least in my area). Although I also don't buy many games at release and instead wait a few months for the price to drop. I picked up Kingdoms of Amalur last week for $40, and it came out in the beginning of Feb. That is 3 months and $20 less.

Heaven's Guardian:

Now, I refuse to buy digital myself, but for those people who will, I'd like to know if there would really be a huge initial increase of sales if a minor price cut is made at launch. I doubt it myself, because I will gladly pay $60 if I think a game is worth that much, and if I don't, it won't make a difference to me if it is $55. Unless that five dollars makes a real difference, don't expect to see any discounts for digital. It's just bad business strategy.

I think digital becoming cheaper than physical would drastically change the digital to physical ratio. And based on publishers complaints about used game sales etc. that would be in their best interest. So it's not so much about increasing sales as it is about diverting them from physical to digital.

And I think a publisher might get more profit out of a digital game sold for $55 than physical for $60. So that's another reason to start shifting towards digital, even at a little lower initial price. It seems like a win-win for publishers - more games sold at higher profit per copy. I'm not at all sure how much cheaper they can afford to sell while still keeping higher profits per a game sold though.

So does that Sherlock gal have a website? Just wonderin'.

Oh, and +1 to publishers being idiots.

as far as I'm concerned $20 is the most I will ever pay for a game

considering last year's AAA games cost that much its crazy to ever pay more

occasionally a new game is worth that much, torchlight 2 is a good example

The day games go purely digital distribution is the day I stop buying games. I hate digital distribution. Both because I like having a solid copy of something I can hold instead of an icon on a screen, which is more of a personal taste issue I admit, but also because if I trade my money for a product I expect to own that product instead of them just 'licensing' it to me and dictating my use of it.
Think about it. It's like going food shopping, and then that shop bans you from eating the food you bought and also bans you from buying from them again because you ate a cake with ice cream. This is the future of the games industry, and it makes me sad.

you almost gotta have a standard, it's standard now to charge 60$ of a full retail game, I think that's pushing it, but I'll let it slide, there's printing, packaging, shipping, development costs, countless work hours of creative process and hard work for over 2 years, crunch hours, the list goes on.

I can deal with it...but not for a digital game. With all that physical cost cut out, the workload arguably lighter seeing as how they can work past the "gold" stage of a game where it is originally supposed to be printed and shipped.

if there is going to be a digital future, publishers need to fight for that, stop pricing games the same you do retail, dont riddle it with DRM, codes or dedicated accounts, we've got steam okay?

even if it means publishers can control everything, I welcome a digital future.

Eric the Orange:

Zachary Amaranth:

Denamic:

Basically, it's ripping you off just because they can.

It's not ripping you off if you willingly pay.

Well the term "ripping you off" is subjective. It's how the consumer feels about the price. So if you pay $100 for a game and love it enough for it to feel worth that price then you are not ripped off.

But as the difference between physical and digital distribution are the same as far as the end product (the game itself, at least), it's ridiculous to call it a "rip off" if you choose to go the DD route.

OldDirtyCrusty:

So true and i will never understand people who support this kind of shit. I´ve to admit i stepped in a few DLC traps myself but throwing out 60 bucks is on a whole different level.

I think we as a culture have become...Well, I'm not exactly sure what the issue it. People have come to treat games as a necessity and will gladly throw down cash on them even if they feel it's a bad deal. The guy below this post refers to gaming as a cartel. He's right. It's grossly enabled by people who complain all while purchasing anyway.

I'm mostly a console gamer and prefer physical media, though I pick stuff up in steam sales and am not actually against DD. In fact, I'm in love with my kindle, and I have an emusic account. Now, books are something I wouldn't mind having all-digital. And music? I prefer physical copies, but eMusic and Amazon MP3 offer significant price differences much of the time. There are exceptions, of course.

Of course, since Amazon's let the publishers set the prices, books are sometimes in the same boat. My solution is not to buy those books, and I've even emailed both Amazon and the publishers. Other people seem to buy the books and THEN complain and nobody really cares at that point. Unless they misled you about the content, then you have nobody but yourself to blame.

DLC can be justified some of the time, though I usually find it a big waste of money.

Jimothy Sterling:
You're arguing semantics, ostensibly. The point was made, and gotten, while you claim it was lost. Clearly it wasn't. YOU knew what was being said, so why are you acting like the point was lost?

Yes, but the problem is that you're poisoning the well. As someone with some amount of influence, you're introducing poor terminology to a new generation of people (particularly given the seemingly young audience of The Escapist), thus dulling their critical faculties, and perpetuating really stupid terms of art. You're basically causing brain cancer.

P.S:

My apologies for my previous posts referring to you in the third-person. I thought "Jimothy Sterling" was a troll/impostor account, seeing as you are credited as "Jim Sterling" by The Escapist. I found out by clicking on the "Jim Sterling" byline that it actually links to the "Jimothy Sterling" account.

So, I guess that's good because it allows me to seek more direct answers. Why exactly did you use a stupid term like "digital games" when all games as we know them are digital?

Zachary Amaranth:

But as the difference between physical and digital distribution are the same as far as the end product (the game itself, at least)...

This bugs me a bit.
It´s not only about the end product. I`m a console user and my harddrive is limited when it comes to installed data. I have to choose which games i want to install. With a disk i have some kind of safe-factor(this and i like to collect). Installing the game data isn`t a matter of my i-net connection and it`s much faster this way. With digital distribution i buy the game (i can do it from home- which is the only real advantage for me) and then i have to wait....
........................................................................... ....... .... ...
... .. . . So far so good, the game is finally installed. From now on both versions are the same, up to the point where i try out new games and data space is required. After deleting the digital bought copy, it`s gone. I can download it for a replay, while it`s most of the time really no big deal it can get really annoying when my router ticks off or the psn is down again.
There are times i don´t even have a web connection, all in all the retail disk is the safer way to keep games (at least to me). If my ps3 gives up i still have a lot to play after getting a new one regardless of an connection or not.

The whole cartel thing is a bit to much credit for the games industry since i`m still able to purchase cheap games (some used, some bargain bin). J.Sterling took a few good points about the prices. I would love to see some numbers to compare the sales, because i just can`t believe that there are many people buying over psn or live for full price (pc seems to be different with all those nice steam sales). One other thing where they seem to shoot themselves in the kneecap are these cheap game of the year editions with every single dlc included (this was already an Jimquisition episode). I tend to rent the big titles first. Most of the time there`s no need to replay them for a longer time period. When the time is right i buy the game of the year edition. These days i try to get away as cheap as i can and i bet i`m not the only one.

If they start to sell games for 45 instead of 60 i would give digital distribution a chance.

To sum up.

Digital copies are less valuable to consumers: we have fewer rights, we can't onsell them, we have to use bandwidth (that costs money) to get them, we have to buy hardware to store them (rather than them being on a disk), we don't get any packaging artwork or physical extras, there's no physical manual - it's a less valuable product to us.

Digital copies also cost less to make, sell and distribute: no physical media or packaging costs. No transport costs. No retailer middlemen.

Ergo? They should be cheaper. MUCH CHEAPER.

Then with an added discount because the bloody publishers should be trying to do everything in their power to convert us across to their clutches. If they had any sense.

Jim's right: if you can't do this, publishers, then stop whinging about second-hand sales and retailers.

I'm a PC gamer, and an avid Steam user. However, out of the last five major AAA releases I've purchased, I've bought four of them on physical discs. The price has been exactly the same, and aside from pre-order bonuses that usually aren't worth it, there has been no difference between buying the physical disc or the digital code except that with the disc, I have the added bonus of not having to download gigabytes worth of data before I start playing. I have no incentive to buy online right now. That one game I bought digitally? I only did it because I couldn't find the game out in the wild that day and decided to grab it off Steam.

The pricing scheme needs to change. If digital is the future of game distribution, then prices need to drop fairly dramatically to compensate for the savings of not having to have a physical presence. The vast, vast majority of Steam games I've bought have been on sale - usually steep sales. I've got about three or four games right now that I'm waiting on the next big sale to buy because the price is so inflated otherwise. Distributors need to lower their prices if they want me to start cutting out the middle man for them on newly-released games. Otherwise, I'll just take a trip over to the nearest Best Buy or what have you and buy a physical copy of the game.

Blade_125:

Jimothy Sterling:

I understand it perfectly, but part of the point of these videos is to highlight to consumers that they *should* demand better and not be so willing to pay. I don't think that's a failure on my part, more like a plea for long-term common sense.

You said yourself that people will wake up and not pay. I am trying to help that move alone, while also appealing to the industry to secure against that long-term eventuality by being competitive NOW. They want digital to take off, but the market demonstrates that you only really beat a rival when you offer better. Right now, the publishers aren't offering better.

Well I think this is the first time I have seen an author read comments, which I think is fantastic.

I also think I slightly misunderstood some of your video Jim, as your comment here sums up my thoughts completely. Customers do need to wake up and realize they have the power to dictate what a corporation does, but it isn't with protests or cupcakes. It's with their wallets.

I think trying to convince companies to change before sales start falling is a waste of breath, but hopefully there will be some visonary in the future who sees the advantage theyc an gain by being first on the bus.

Also I wanted to mention I really enjoy your shows. The past 4-5 have been fantastic. It's nice to have something to look forward to on the Escapist.

Well thank you!

Yeah, the problem with a rant video is it's easy to misunderstand. Obviously I am under no delusions that EA's CEO will watch my vids and say, "My God, he's right, WHAT HAVE I DONE?" I can at least hope a few viewers will realize they can expect far better from this industry.

I think many gamers are getting more aware of that, as evidenced by some of the consumer outcry we've seen lately. It's pretty encouraging.

Aardvaarkman:
So, I guess that's good because it allows me to seek more direct answers. Why exactly did you use a stupid term like "digital games" when all games as we know them are digital?

For the reason I already gave. It was a useful shorthand term, better than saying, "A game sold through a virtual storefront." Nobody in the gamer community uses the term "digital games" for, really, anything else.

Yes, technically all games are digital, but the term digital has come to be associated almost exclusively with digital distribution. Just like how "artificial intelligence" means something quite different from what gamers call "AI," the term "digital" has a generally accepted new meaning when applied to videogames. That's the best thing about the English language, its mutability.

Jimothy Sterling:
Nobody in the gamer community uses the term "digital games" for, really, anything else.

If true, that's just one of the many really fucking stupid things about the "gamer community."

If you wanted a shorthand, why not simply "online distribution"? That's also only two words.

Aardvaarkman:

Jimothy Sterling:
Nobody in the gamer community uses the term "digital games" for, really, anything else.

If true, that's just one of the many really fucking stupid things about the "gamer community."

If you wanted a shorthand, why not simply "online distribution"? That's also only two words.

Because I chose something else.

Jimothy Sterling:

Because I chose something else.

Yes, something that doesn't make any sense, and undermines your argument. Also, you say that this is a normal term used in the "gamer community", but I've never heard "digital games" used to describe online distribution until now. Yes, "digital distribution" is fairly commonly used, but not "digital games."

The poor choice of words just underlines the weakness of your arguments. You never actually explain why "retail" is somehow worth more than "digital games." And your response to criticism is simply "because I said so" rather than anything rational that might shed light on the issues.

Aardvaarkman:

Jimothy Sterling:

Because I chose something else.

Yes, something that doesn't make any sense, and undermines your argument. Also, you say that this is a normal term used in the "gamer community", but I've never heard "digital games" used to describe online distribution until now. Yes, "digital distribution" is fairly commonly used, but not "digital games."

The poor choice of words just underlines the weakness of your arguments. You never actually explain why "retail" is somehow worth more than "digital games." And your response to criticism is simply "because I said so" rather than anything rational that might shed light on the issues.

It made perfect sense due to the fact that everybody knew what I was talking about. When something does not make sense, people do not understand it. Even YOU did, the guy who has the problem with it, and by this point, this argument is become inanely circular. End of the day, I chose a turn of phrase that you don't like. Simple as.

I've responded perfectly validly to your criticism. I explained multiple times, in multiple ways, why I said what I said, and your response has simply been to repeat yourself. This has become a farce.

Jimothy Sterling:
snip

Aardvaarkman has a troll-like obsession with semantic denotation but he apparently lacks "pragmatic competence".

http://en.wikipedia.org/wiki/Pragmatics

Aardvaarkman:

Jimothy Sterling:

Because I chose something else.

Yes, something that doesn't make any sense, and undermines your argument. Also, you say that this is a normal term used in the "gamer community", but I've never heard "digital games" used to describe online distribution until now. Yes, "digital distribution" is fairly commonly used, but not "digital games."

The poor choice of words just underlines the weakness of your arguments. You never actually explain why "retail" is somehow worth more than "digital games." And your response to criticism is simply "because I said so" rather than anything rational that might shed light on the issues.

Hey dude. Here's a list of other articles and forum posts that refer to "digital games" and "retail" in the same manner.

http://www.ign.com/boards/threads/do-you-prefer-retail-or-digital-games-on-handhelds.452460435/

***Digital Games Will Have the Same Price as Retail Ones on Nintendo's eShop

http://news.softpedia.com/news/Digital-Games-Will-Have-the-Same-Price-as-Retail-Ones-on-Nintendo-s-eShop-267606.shtml

***Retail plays an essential role even as games go digital, says EA's Peter Moore

http://www.gamasutra.com/view/news/169962/Retail_plays_an_essential_role_even_as_games_go_digital_says_EAs_Peter_Moore.php

***Nintendo Reinvents the Download

http://www.mcvuk.com/news/read/analysis-nintendo-reinvents-the-download/095758

Quote: "It's very easy to consider Nintendo's sudden declaration to 'significantly expand its digital business"

***Nintendo Plans To Offer Digital Game Sales Same Day As Retail

http://www.gameinformer.com/b/news/archive/2012/04/27/nintendo-plans-to-offer-digital-game-sales-same-day-as-retail.aspx

As you can see these terms are widely accepted and understood. Complaining about it just makes you sound like a dull English teacher railing against people putting an 's' at the end of the word 'toward'.

Why don't you stop being a stuffy prescriptivist and discuss the SUBSTANCE of Jim's argument?

Yea, I recently bought Infamous 2 for £19 and seen it on the PS Store for £50 :|

I lol'd at "the good Hitler of videogames"

OldDirtyCrusty:

This bugs me a bit.

You're still talking about delivery vector, though. That's not really anything to do with whether the end product is the same.

Zachary Amaranth:

OldDirtyCrusty:

This bugs me a bit.

You're still talking about delivery vector, though. That's not really anything to do with whether the end product is the same.

Okay, then it`s delivery vector. The retail versions for console games have still more advantages than the digital ones. I`ll buy them as long as nothing major changes. ;)

There's a reason why the publishers don't just skip ahead and cut out retail; it's because of Consoles.

There's a duality in the mainstream game market:

-Retail System: Sells Console Games almost exclusively.
Unless it's a game with mountains of hype and marketing behind it, you won't see most PC games in retail anymore.
Just a casual stroll through a Best Buy, Gamestop, or Walmart will prove this. Even PC games sold as hard copies, are STILL bought online from overstock sites and referral lists (like Amazon).

-Digital Distribution: PC does nearly all of its business here now. Again, it's incredibly rare to see a PC game in a box set or DVD, and even those are just going to point you to an online DRM system to register your game. The upcoming Diablo 3 is going to retail, yet it's entirely online anyway.

And the problem stems from this: Publishers aren't entirely sure of who to back.
Consoles? Or PC?

The Big Publishers have made a KILLING on Consoles due to the ease of use appeal and innate market control (psychological DRM) consoles provide. It's been such a consistent stream for profits that they've integrated the console-factor into EVERY PART of their business model from marketing down to game design itself.
They're VERY dependent on consoles for success; far less so than PC (again, MOST publishers; Blizzard or Valve are obviously more PC-oriented than EA, Activision or most of the Japanese Publishers, but they are the exception and not the norm).

So put the two points together: Big Publishers need retail support even though it bites them with Used Games (and they LOVE to complain about it).

But now they're in a unique crisis; the Big Three Console Giants are shuffling their feet VERY nervously at the prospect of launching their next consoles (well, two of them anyway. Nintendo is only too happy to play from behind, technologically).

And this is key: because if there aren't any new consoles to cater to the Publisher's demands and the mainstream market that they've built around them, the symbiotic relationship collapses, and with it, so does their source of easy profits.

So what's the problem? Just make new consoles and repeat the cycle.

Sony and Microsoft are scared. They're worried deeply about the cost of another Loss Leader strategy. They LOSE money on each console sold, but hope to recoup the costs* in licensing and game sales.

Their current console loss leader strategies finally evened out in 2009, and took off from 2010 to present, where the cost of production was being vastly outstripped by the growth rates of revenue from software licensing/sales. But now, their consoles are moving too far behind the tech curve; they're horribly obsolete and everyone knows it.

Yet, the cost for the NEXT generation looks to be staggering. Proportionally worse than the previous generation, and that investment was painful enough. Nintendo's Wii U looks to be under control since it's essentially playing "catch-up" to the other two and that's been shown to be financially sustainable (especially with reduced manufacturing costs compared to 5 years ago).

And this hesitation is having profound effects on the entire market, because most major publishers, again, got married to consoles yet there might not BE "next-gen consoles" outside of handhelds and the Wii U.

The price to subsidize hardware might be too steep for either the Console Giant OR the average Customer. Imagine if launch-era PS3s were the standard price just because they couldn't risk any further loss than that!

So even if there ARE next-gen consoles, now they're worried about their ability to compete with PC (for the first time in over a decade), or how the market might react to consoles that essentially force you to get married to an online DRM system. (at which point why not just buy a PC anyway? Cheaper games, cheaper hardware. Same bullshit DRM either way.)

The longer the wait, the more appealing PC looks as its market share grows; a continuing trend that started over two years now, after years of tepid MMOs (well, *ONE MMO* cloned a dozen times) and second-rate port jobs from consoles.

(part of the appeal of current generation consoles is tangible security and the fact that the DRM of consoles is obfuscated to the average consumer. Eliminate that, and suddenly, PC doesn't look any worse. Now it's just a PC with an idiot-proofed GUI run by controllers instead of a keyboard and mouse.)

They're worried about market backlash, and with pricing schemes like this, rightly so.

So for now, everyone is just doing what they've been doing for the last six years, only now some of the publishers are preparing contingencies; if the next generation of consoles fails, fails to exist, or fails to dominate PC again, then they will have a system in place to continue marketing their games.

And until such a time as they KNOW which move is the dominant strategy, they're going to price evenly between the two. They won't get rid of Retail until it's no longer essential to the dominant strategy.

(Sony FINALLY noticed this and is adjusting their online market (since they own their own online market for the Vita and PSP-GO) to compensate for this, albeit, only recently.)

...And I doubt anyone will read this wall of text, but hey, I had time to kill while baking a pizza. No loss for me. ;p

Therumancer:
A Cartel is more or less the same thing as a Monopoly in the final equasion, the differance being that in a Monopoly one person totally controls something, with a Cartel all the people in a given business coordinate to achieve the same kinds of results.

I agree with that sentiment, which is why I frequently refer to the Big Publishers as an Oligopoly (very similar to a Cartel; can exist AS a Cartel even).

Though I chose to address the division between the two sides of the mainstream business (PC and Console) as a lack of adaptation as a whole since the Oligopoly is going to thrive depending on which side succeeds more.

Proprietary control is the hallmark of Monopolistic/Cartel behavior in the realm of digital goods.

OldDirtyCrusty:

Okay, then it`s delivery vector. The retail versions for console games have still more advantages than the digital ones. I`ll buy them as long as nothing major changes. ;)

They might for you, but I don't have storage issues and I love being able to redownload games if I need to.

While this isn't entirely gaming related, because I'm less digitally oriented with them, but my last place was in an apartment building that caught fire. Now, my place didn't burn, but half a million gallons streamed through my floor. All my shit was ruined. Physical books, some CDs/DVDs/Games even cracked, etc.

But I redownloaded all my ebooks to my kindle, recovered my MP3s from Amazon's cloud, and got back all my Steam games.

My girlfriend likes to name her Pokemon nemesis Hitler.... it's created some hilarious dialogue.

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