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.
Much better microphone Jonah.
@ RTS’s aren’t dying – just waiting
So scaling down is an issue, apparently … Well, you can always push up the minimum spec, and leave the lower end PC market for indies.
I agree with Jordan, blaming the hardware instead of acknowledging the lack of balls/cojones is not fair.
@UK: Wii U sells just 34,000 pieces of software in January
😛 this is a big surprise indeed, taking into account the huge library of games available for WiiU.
On the other hand, WiiU doesn’t have the market share that other consoles have.
@thatgamecompany had been bankrupt when Journey shipped
Speaking of cojones, these guys had it.
As for a small design doc, well, not entirely bullshit. You can do it the Agile way, with lots of cards, each describing a development story. So yeah, technically you do have just a one page document, but the entire description of the design will take plenty of cards to compensate.
@QOTW:
Not sure, to be honest, I wasn’t a fan of RPGs. Then STALKER came (Steam labels it as an RPG). Warcraft III had RPG elements in it, but it was still an RTS. I also enjoyed Fallout 3, but that was after STALKER.
Some encouraging words for Paul: hope you get a job.
@KOTOR
I loved it. I actually prefer the Old Republic era than the whole Anakin timeline.
@RTS are undead
In my opinion a genre never dies. Few years back people were saying that 2D games were dead. Since then we had some brilliant 2D entries. Terraria. Trine. Same thing will be with RTS. They just need the right conditions for a return. A brave studio that will make a new classic and start an RTS uprising.
@Segsbox 360
I think Microsoft tried to buy everything at some point. I definitely remember Microsoft wanted to buy Nintendo during it’s Gamecube days. If Microsoft would buy Sega, the Dreamcast might have had a chance. Microsoft would flood it with cash and support.
But history chose otherwise. Probably for the best.
@At Wii U sales
If there is one thing I am sure off is that in February there will be at least one Wii U unit sold in UK. Mine. That’s right. I now own 2 Nintendo branded bricks. My £300 Monster Hunter emulator.
@Assassins Creed
Milk the cow while it’s alive and pray it does not turn into a bull.
@QOTW
First RPG I ever played was Phantasy Star 2 on Genesis. It’s funny cause I could never complete it because Russian cartridges shipped without memory and you had to finish the whole game in one sitting. The first RPG I properly enjoyed was Pokemon Emerald. I played a few RPGs before it but they were nothing compared to Emerald. That and Final Fantasy X.
The demo of Journey does not do it justice. I too tried the demo in mid-2012 and was underwhelmed.
Then over winter break, I decided to listen to the great reviews and give the game a shot. Actually bought the disc. It was an amazing experience. The gameplay is very basic, but the immersion and creativity levels are way high.
By the way, you can solo the whole game. It’s only an option to interact with others (who you will not see in the demo). Everyone looks the same, but has unique musical sounds they make. You can only communicate through musical sounds, and so interacting with others becomes this amazing experience, because you are doing most of the interactions in your own imagination!