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.
Nintendo Wii Rumor: Price Rollback
After having to listen to all the podcasts from episode 136 onwards to catch up due to being busy preparing for university and putting together my new gaming rig (Core i7 baby!), I can finally write an answer to a Question of the Week!
And so, without further ado, the first game that truly terrified me (and in many ways the last) was ‘Alien Trilogy’ for the PSX. Not in retrospect a very scary game, but I was only about 7 or 8 at the time and the game was rated as an 18… Not sure why I was allowed to play it. But after then, I never really got scared from games. Some games (like Systemshock and the Half Life games) managed to create a dull feeling of dread and foreboding, which in many ways is more ‘entertaining’ than straight shocking fear. In recent years the only game that managed to make me properly jumpy was when I was playing the Fear 2 demo, but the shock-factor soon wore off. None of the classically ‘scary’ games such as Resident Evil or the Silent Hill series ever scared me in the remotest, more often than not they merely bored me and so I got into the habit of simply ignoring games whose primary selling point is to create brown-trousered audiences…
As always, thanks for a brilliantly entertaining podcast, cheers and peace!
P.S: Monty Python quotes are always welcome… He’s not the Messiah!
After having to listen to all the podcasts from episode 136 onwards to catch up due to being busy preparing for university and putting together my new gaming rig (Core i7 baby!), I can finally write an answer to a Question of the Week!
And so, without further ado, the first game that truly terrified me (and in many ways the last) was ‘Alien Trilogy’ for the PSX. Not in retrospect a very scary game, but I was only about 7 or 8 at the time and the game was rated as an 18… Not sure why I was allowed to play it. But after then, I never really got scared from games. Some games (like Systemshock and the Half Life games) managed to create a dull feeling of dread and foreboding, which in many ways is more ‘entertaining’ than straight shocking fear. In recent years the only game that managed to make me properly jumpy was when I was playing the Fear 2 demo, but the shock-factor soon wore off. None of the classically ‘scary’ games such as Resident Evil or the Silent Hill series ever scared me in the remotest, more often than not they merely bored me and so I got into the habit of simply ignoring games whose primary selling point is to create brown-trousered audiences…
As always, thanks for a brilliantly entertaining podcast, cheers and peace!
P.S: Monty Python quotes are always welcome… He’s not the Messiah!
*clears throat* Okay, I was going to ask Jonah to back me up on this, but why drag him into my nitpicking, right? ‘;D
The resolution issue? Is not an issue. If you have a 1080p HD screen, it doesn’t matter whether your viewing area is 24 inches or 60 inches, you’ll get the same number of pixels. So the bigger the screen, the less tight those pixels (if they even call them that on TV screens) will be. The spoilage I alluded to is not so much console-related (considering the only console I have is a Wii), but rather the PC*, which has been “Hi- Def” resolution for about a decade now. ‘;D [* – Or the Mac, if you like.]
Maybe PS3 games scale up well on 50 inches, but I’m sorry to say that I don’t really know firsthand. ‘:( *sniff*
Of course, if your basement (er, gaming cave) is HUGE, then you can sit far enough away for it to still be enjoyable.
BTW, by “whatever’s ideal for Natal,” I of course meant an exact replica of the living room used in Microsoft’s tech demo/video, just off to a corner of the imaginary gamer cave (which I admit I got carried away with, but I thought I heard Don say money was no object, which I took a bit literally. [Or perhaps I just ran with the cave metaphor a bit far, since caves are typically for hibernating. ‘:D]
*clears throat* Okay, I was going to ask Jonah to back me up on this, but why drag him into my nitpicking, right? ‘;D
The resolution issue? Is not an issue. If you have a 1080p HD screen, it doesn’t matter whether your viewing area is 24 inches or 60 inches, you’ll get the same number of pixels. So the bigger the screen, the less tight those pixels (if they even call them that on TV screens) will be. The spoilage I alluded to is not so much console-related (considering the only console I have is a Wii), but rather the PC*, which has been “Hi- Def” resolution for about a decade now. ‘;D [* – Or the Mac, if you like.]
Maybe PS3 games scale up well on 50 inches, but I’m sorry to say that I don’t really know firsthand. ‘:( *sniff*
Of course, if your basement (er, gaming cave) is HUGE, then you can sit far enough away for it to still be enjoyable.
BTW, by “whatever’s ideal for Natal,” I of course meant an exact replica of the living room used in Microsoft’s tech demo/video, just off to a corner of the imaginary gamer cave (which I admit I got carried away with, but I thought I heard Don say money was no object, which I took a bit literally. [Or perhaps I just ran with the cave metaphor a bit far, since caves are typically for hibernating. ‘:D]
Interestingly enough, there’s an Amstrad emulator for the Wii!
http://wiibrew.org/wiki/Wiituka
(I mention this only for educational purposes, since everyone knows that it’s wrong to install unauthorized software onto a Wii.)
“Don’t Abuse Your Wii! Keep It Clean.”
Interestingly enough, there’s an Amstrad emulator for the Wii!
http://wiibrew.org/wiki/Wiituka
(I mention this only for educational purposes, since everyone knows that it’s wrong to install unauthorized software onto a Wii.)
“Don’t Abuse Your Wii! Keep It Clean.”
Two things about the original Pirates you didn’t mention:
1. You needed the cloth map to find out where you are, because you have to use a sextant to figure out how high the sun was in the sky at noon. (Now it’s just automatic.)
2. You could be the only member of your crew left during a fight, but so long as you defeated the other captain, you won. Picture you fighting a captain while 200 sailors are standing around watching. heh
Two things about the original Pirates you didn’t mention:
1. You needed the cloth map to find out where you are, because you have to use a sextant to figure out how high the sun was in the sky at noon. (Now it’s just automatic.)
2. You could be the only member of your crew left during a fight, but so long as you defeated the other captain, you won. Picture you fighting a captain while 200 sailors are standing around watching. heh