Xbox 360 Price Cut Leads To 100-Percent Sales Increase

Why release a single block buster game with a two week pop when you can simply lower the price of your console and boost sales by 100%? That’s a question Sony may be asking themselves right now, as Metal Gear Solid 4‘s hype may have lasted years but the sales and console unit sale boots lasted a month.

Gamers show how they feel about costly consoles with their wallet. With 100% increases in sales, it’s clear that many gamers have been holding out from the “next-generation” of consoles because the price was too high. Now, Microsoft can report huge sales numbers this quarter with a special thanks to their price cut. Imagine the sales boost the PlayStation 3 would have if it was competitive in price?

Microsoft could have kept the savings of manufacturing costs to themselves but they chose to pass savings onto the consumers. The increase in unit sales means more households own the product and newly released games will probably see larger spikes now that people have invested in the 360 console.

End result, developers will want to produce games for the Xbox 360 because they’ve got a larger audience and publishers will be less likely to pick Sony as an exclusive because the 360‘s got sway in the market. It might not be a Wii in total sales records but it’s not half bad!

(Thanks, gamasutra)

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Final Fantasy XIII – Xbox 360Final Fantasy XIII – Xbox 360

Yoichi Wada of Square Enix has let the cat out of the bag. The cat is Final Fantasy XIII for the Xbox 360 and it will be simultaneously released with the PlayStation 3 version. This may be an end to an exclusive era for Sony as all their big brands jump to non-exclusion.

This is probably a result of gamers slow adoption of the PlayStation 3 hardware for various issues, one being cost. Personally I think Sony’s move to say “no price cut” in our near future is a grand mistake. It is well understood that they want profitability over quantity but you’re losing your exclusives to a broader audience.

Each generation of consoles brings new industry trends and, for now, exclusive games from third party developers is too risky when you look at overall cost to produce a block buster title like Final Fantasy XIII. Consider the sales of GTA IV, although they were in the millions, imagine how low it would have been if they only released on the PS3. They’d might have actually lost money on the game.

Square Enix can see the writing on the wall, that writing says “ship on as many mediums as possible.” Gamers are split between consoles with a huge segment on Wii and Xbox 360, if you can at least ship on one of those consoles along with the PS3 you’ll do better financially.

(Thanks, Kotaku)

Wallets Shrink, Used Game Market GrowsWallets Shrink, Used Game Market Grows

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.

for-saleThis 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.

Episode 329: Back AgainEpisode 329: Back Again

Gaming Podcast is back after being off for a week. This time out, there’s a Gaming Flashback as Jordan and Jonah discuss The 7th Guest, which was coincidentally just released on Steam.

This week’s news includes:

  • Xbox One and PlayStation 4 headsets compatibility issues
  • Dark Matter abrupt ending blamed on failed Kickstarter drive
  • Rockstar New England working on “next version of famous IP”
  • Fassbender on Assassin’s Creed film: it’s “definitely happening”
  • Struggling Scrolls may go free-to-play

This week’s Question of the Week, “What was your favorite adventure game?”