Over the last year we’ve seen developers scrambling to find “value add” features to new game purchases. Their goal is to convince the customer to buy new instead of used because developers don’t see a penny from a used game sale. While GameStop sees 48% profit margins from the used game market developers struggle to stay floating in the industry.
This is not the fault of GameStop and their 48% profit margins because they’re only getting 7% to 20% profit margins (say analysts) on new game sales. As someone that’s run a game store online, if you’re getting 15%+ on a new game you’ve got some great hookups in the distribution channel or are buying in huge quantities.
Buying games in huge quantities to build profit margins can be a huge mistake in this industry. Gamers are fickle little creatures and they’re going to buy their top tier games for a few weeks and then sales will drop significantly. No retail chain wants to purchase a thousand copies of GTA IV (only as an example) and sell seven hundred over the first few week to be stuck holding onto a few hundred copies when the dust settles. Now you’ll have to put them on sale to get them out of the store because the hardcore gamer have already done their shopping and you’re not going to get any price protection if you’re not a major player in the industry.
Why take 7% profit margins when you can get 48% on a used game? The gamers don’t seem to mind because they’ll trade in a used copy of a sports title like Madden to save $5.00 on the latest franchise release. Gamers will buy Fable 2, beat it in a week and rush to the store to get the “most for their dollar” before the game gets stale and buy-back prices drop like a stone. Why not rent Fable 2 and save yourself $50.00? Of course, renting pisses off developers as well because they see no additional revenue.
While the economy struggles and consumers fight for their jobs, the entertainment side of life continues to grow. People would rather “cocoon” in their homes playing video games and watching movies on their brand new HD television because it takes them away from the low points of the economy if only for a few hours. History has shown us trends in entertainment during the down points of economies, it’s natural to want to get away for a bit.
But, consumers want to play these games on the cheap because their job may not be there tomorrow. Saving $5.00 knowing the store just took the title in for half the price doesn’t bother you; $5.00 in your pocket is better than in their pocket right? The fact that they just pocketed upward of 40% on the game doesn’t matter to you — it’s all about your bottom line!
While we’re bargain hunting during the recession developers are going to try and up sell you to a new copy of the game. If that means giving you special game items and features with a “one time code” upon purchase, it will be up to you to decide if it’s valuable. All the while GameStop will lock out the game industry from selling used games because 42% of their overall gross profit is from used game sales.
You, the consumer, benefits from a slightly cheaper game, bargain bin fire sales and additional game features if you do choose to buy new. The economic down turn is a great time to be a gamer, as long as you remain employed.
The obvious answer is no, Sony don’t NEED theese 2 games to drop in the 2009 calendar year.
If you take a look at the games that are CONFIRMED to hit before 2010:
Killzone 2
White Knight Chronicles (US and EU release)
Uncharted 2: Among Thieves
Yakuza 3 (Japan)
Infamous
Final Fantasy XIII (Japan)
Heavy Rain
New Ratchet & Clank
Gran Turismo 5 (Possibly)
That’s more than enough to offset anything that Microsoft/Nintendo can conjure up. Even if Microsoft were to shock everyone by releasing Halo 4 and Gears Of War 3 (Har har) Sony would still outshine them without the two games you mentioned.
Personally, i probably won’t even be picking up MAG and God Of War 3 is an afterthought for me. The game i’m most looking forward to is Uncharted 2: Among Thieves.
The obvious answer is no, Sony don’t NEED theese 2 games to drop in the 2009 calendar year.
If you take a look at the games that are CONFIRMED to hit before 2010:
Killzone 2
White Knight Chronicles (US and EU release)
Uncharted 2: Among Thieves
Yakuza 3 (Japan)
Infamous
Final Fantasy XIII (Japan)
Heavy Rain
New Ratchet & Clank
Gran Turismo 5 (Possibly)
That’s more than enough to offset anything that Microsoft/Nintendo can conjure up. Even if Microsoft were to shock everyone by releasing Halo 4 and Gears Of War 3 (Har har) Sony would still outshine them without the two games you mentioned.
Personally, i probably won’t even be picking up MAG and God Of War 3 is an afterthought for me. The game i’m most looking forward to is Uncharted 2: Among Thieves.
With the inevitable price cut supposedly sometime this year, i think sony can hold off GOW 3 and MAG at least till next year.
The PS3 seem to be coming alive and starting to gain some real momentum and i think a $100 price drop might just seal the deal and save them from utter failure and embarrassment.
Microsoft has already got their install base sewn up hence only need to worry about selling software. Sony on the other hand have the harder task of marketing what seems like a luxury brand (to most people) in a recession. Many people simple can’t justify spending that much on what is primary a game console. (blue-ray simply doesn’t cut it Sony)
At the end of the day it comes down to Two words, PRICE CUT, and they better do it quick.
With the inevitable price cut supposedly sometime this year, i think sony can hold off GOW 3 and MAG at least till next year.
The PS3 seem to be coming alive and starting to gain some real momentum and i think a $100 price drop might just seal the deal and save them from utter failure and embarrassment.
Microsoft has already got their install base sewn up hence only need to worry about selling software. Sony on the other hand have the harder task of marketing what seems like a luxury brand (to most people) in a recession. Many people simple can’t justify spending that much on what is primary a game console. (blue-ray simply doesn’t cut it Sony)
At the end of the day it comes down to Two words, PRICE CUT, and they better do it quick.
The price cut would have been announced today had there been one. Sony’s losing too much per unit still.
The price cut would have been announced today had there been one. Sony’s losing too much per unit still.
The “Rumoured” PS3 price cut isn’t supposed to take effect until April………so why would they have announced it in March??? LOL………….
The “Rumoured” PS3 price cut isn’t supposed to take effect until April………so why would they have announced it in March??? LOL………….
The rumored price drop was March.
http://www.gamestooge.com/2008/11/25/playstation-3-march-2009-price-drop-rumor/
The rumored price drop was March.
http://www.gamestooge.com/2008/11/25/playstation-3-march-2009-price-drop-rumor/
Another rumor:
http://www.gamestooge.com/2009/03/07/more-ps3-price-drop-predictions-by-analysts/
This one was shot down by Sony as well.
Another rumor:
http://www.gamestooge.com/2009/03/07/more-ps3-price-drop-predictions-by-analysts/
This one was shot down by Sony as well.
LOL…..as the link you just provided proves, the price cut isn’t expected to take place until April at the EARLIEST.
Better learn how Sony’s FISCAL year works……..it runs from April through to March of the following year. It makes far more sense for Sony to cut the price at the start of a new fiscal year rather than at the very end of one.
LOL…..as the link you just provided proves, the price cut isn’t expected to take place until April at the EARLIEST.
Better learn how Sony’s FISCAL year works……..it runs from April through to March of the following year. It makes far more sense for Sony to cut the price at the start of a new fiscal year rather than at the very end of one.