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.
As the Wrath of the Lich King beta lives on, the world (and software behind it) is ever changing. Apparently, the rune system has changed a lot since its first inception. This requires a delicate balance, as the goal is a well rounded Death Knight class without epically overpowered features. Too much power and people will feel cheated while others feel overly destructive. End result, everyone would be a Death Knight.
Hi guys great episode!
@Apple: I think Paul brings up a good point that there are some men that would really benefit from this as a teaching tool. I just think they need to put a mature rating on this and have Adult section for apps like this to go into. I think Jordan is right the majority of times male masturbation is mentioned it’s usually derogatory like in Family Guy when Chris Grandpa berates him for his supposed masturbating in the bathroom. They also treated it like a dirty word on Roseanne when DJ was locking himself away in the bathroom. TV and movies gave me the impression that masturbation just isn’t shouldn’t be talked about.
@Sony working on new models of PS4/PS3: I understand working on the current gen console but why PS3? Not that I’m complaining, maybe there will be worthwhile addition or changes.
@External Storage for Xbone: About time I say, I think it’s silly NOT to support external storage via USB. I also love the Xbone term as well.
@Blizzard Sues: For once I’m hearing a good case to sue someone, usually you see very furiously made lawsuits like the lady suing the parents of the kid she hit and killed. I’m glad they are cracking down on those who just break the game, I agree people cheating really turns me away from a game.
QotW: At first the only Party game I could think of was Mario Party but it’s not really a game I would call favorite, the fate of wining left to a random dice roll doesn’t sound appealing to me.
Games that I played in groups were light sports games like Wrestling, however still not my favorite. I do remember getting into fights over Bubble bobble, some people just can’t stand it when you take a power up or 1-up from them.
I haven’t really had good experiences with party games so I’d like to answer last weeks Question:
Lost Mind of doctor brain and the rest of the series of games, I really loved how the entire series would explore all facets of science, history, geography, math and logic puzzles. It honestly made learning fun.
Let me start by breaking the spell and saying that I’m unfortunately not a hunting-killing machine from the Polish woodland 😉 I went to a shooting range once, though, and I did pretty well so maybe hours of Duke Nuke’m 3D did their job…
@Apple
On the one hand, censorship is obviously not welcome but the truth is that a company can do and publish whatever they want. It’s not the government that is limiting the freedom of speech, it’s a private company selecting their content. I’m pretty sure that if it had been an app for male masturbation they would have done the same. The ‘free market’ allows the content creator to look for a different outlet that will decide to publish that content and maybe Google or Microsoft be the ones to grab it.
I personally have no problem with such an app as an ‘introductory course’ but in the end I still believe that the best teacher of female stimulation for guys should be the partner herself.
@Pre-loading
Maybe I’m not as hardcore a gamer as many other people. Well, for sure that’s the case. Still, I can’t really understand that they can’t wait several more hours to play a certain title and they HAVE TO have the game installed and running at midnight when it launches. What is more, I’m very wary of buying the $60 titles online. These are ususally games with many hours of gameplay and ones that will probably be revisited years down the line. What if I want to re-download the game in some years and the servers are no logner working or something is wrong with them? That’s why I’m always a physical-copy-first guy. Also, you can’t really re-sell a downloaded game. Taking all that into account, I don’t beleive the online store revolution will be as successful as the publishers believe. Having said that, I don’t know any numbers that would prove or disprove it. What do you think?
@External storage
That’s a great feature. Although 500GB may sound like much, when you consider that the new Wolfenstein takes up around 60 of that and that only over 100 GB are taken up by the system itself, it quickly turns out that there’s not really that much space for games. Being able to store them on an external drive is fantastic. I’m not sure if the PS4 supports it or plans to do so. I would like to have it there too. However, support for media streaming (DLNA) is something I want sooner. Does the XBone provide that functionality now?
@QOTW
The only two party games I ever play on the PS4 are the Sports Champions titles and Just Dance. SC are really fun and something everyone can play. Obviously, with my notorious hunting skills, I’m unbeatable in the archery competition. Just Dance, on the other hand, works like crap on the PS4. Ubisoft put no effort whatsoever to optimize the use of the PS4 camera so tracking doesn’t really work. Still, for half-drunk friends who simply want to make fools of themselves, it works. The ‘highlights’ of each song shown at the end are hilarious.
The games that Alphashard talked about – Wrestilng or Bubble Bobble, I wouldn’t consider party games, really. I used to play them with friends back in the day because they were fun co-op games and the ‘party game’ genre hadn’t really developed yet. Those games destroyed friendships more than built up a fun, party-like atmosphere 😉 Also, they required some gaming skill whereas the modern titles are created often with non-gamers in mind.