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 has
@Culture Diversity in games: I don’t know which is sadder: That you both didn’t think of Quest for Glory or the Witcher 3 when asking how many games have Baba Yaga. Quest For Glory series explored not just European culture but Arabian (QFG2) and African(QFG3) as well. You get to deal with Baba Yaga as a villain three times once in QFG1 and once again in QFG IV (Slavic) (which you also faced Domovoi and Rasulka, along with Vampires and Werewolves) and finally in QFG 5 (Greco-Roman). I do have to thank Sierra games for showing me such diversity of cultural backgrounds in their games, they also had a series called the Incans.
Now Witcher has these Hags which seem like the kind of creature that Baba Yaga is, if you’ve seen some of them:
http://www.gameranx.com/updates/id/13158/article/the-witcher-3-concept-art-depicts-baba-yaga-and-other-mythical-creatures/
They should have had one of these “ladies” at the end of Blair Witch, that would have been great nightmare fuel.
I do agree we need more game diversity of cultural backgrounds and Sierra had a lot of that. Speaking of which Ken Williams gave an interview about the new King’s Quest game being made by the Odd Gentleman
http://www.gameinformer.com/b/features/archive/2015/01/02/ken-williams-interview-kings-quest-sierra-game-informer.aspx
One point of the interview Ken says how he doesn’t like to categorize a game like “point and click” that they should be more an experience and not get stuck on trying to be next big thing. It made me think about how they tried to keep up with the changing game market back in the 90’s, struggles with FMV and then 3D games. Both this King’s Quest game and the GK1 remake are Corporation backed while the Kickstarted Hero-U and Space Venture are not and seem to be having trouble getting done at all.
@ “Selling out”: I like the saying if you can do something well, get paid for it. I think it makes sense, everyone deserves to eat even brilliant artists.
@ Hacker Punks: I cannot wait for these punks to be arrested; they committed a crime so YES they will be investigated. I had to laugh at the phrase “all the good hackers have done” yeah like what? Also apparently Sony was “asking for it” by not having better security, now I wish Sony had worked harder on being more secure it still doesn’t give the right for them to break in.
@Playing Online: I agree I don’t like trying to play with random strangers and having a group of friends is great. So speaking of Polycast we’re always open to you dropping by on Saturday Jonah. We’ve been playing Civ 5 and Beyond Earth lately.
@Christmas loot: I got a bag of holding from Thinkgeek, lightsaber chopsticks, a Star Trek communicator badge, a Professor Layton game and a doctor who Pocket watch. So I got some good geeky loot this Christmas!
@Help me mom, they hacked my Xbox!!!
I wasn’t affected this time around because I was with my family for New Year and mostly played offline. I will have to agree thou. Microsoft and Sony get hacked so often now that it’s not even news anymore. I find it ironic how a snot can spit down on a huge company whenever he pleases. Something has to change.
@STALKER: Shadow of >>>CENSORED<<<
Maybe the Ukrainian government did not want a tourist influx into their danger zone. The STALKER series did raise Chernobyl’s profile considerably. Last thing they wanted was amateur treasure hunters crawling around the Sarcophagus looking for artefacts. On the folklore cultures, there are quite a few different mystical entities that would make good game characters. In fact, there are many Russian games based on the Russian folklore. But they never make it out beyond the Iron Curtain. Not enough demand. The reason why Greek and Roman gods are so popular is because everyone knows them. On the contrary, most westerners can’t even pronounce Vodyanoy or Kikimore (mystical creatures).
@QOTW
Not as much as I would like too. I only play online with my friends, and currently we have a mismatch of gaming platforms (I have lots of consoles but no PC). I used to play a lot on Xbox Live. Have my fondest memories playing Bad Company 2, Borderlands and Left 4 Dead 2 till the latest hours of the night. But university fixed that. Had no time to play anything at all. Now I can’t get back into any online gaming. I have a huge of backlog of singleplayer games and no worthy multiplayer games to keep me interested. It has been a long time since something fresh came out. Maybe Evolve and Halo will fix that.