This week’s episode is a little late due to a power outage. However, despite the lack of really interesting news, the crew still finds plenty to chat about.
This week’s news includes:
The Question of the Week is, “What popular game did you play long after its initial release?”
This week’s Gaming Podcast lacks Paul S. Nowak, who had to bow out due to illness, but there’s still Jonah Falcon, Jordan Lund and Daniel Quick to keep the podcast lively. This week features yet another weird NES title, Wall Street Kid, and some friendly Paul-less banter between the trio.
This week’s news includes:
Jonah also startles Dan and Jordan with a “secret topic” with the $99 console, the Ouya, which leads to the Question of the Week, “Would you buy a $99 Android-based console?”
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.
This weeks gaming podcast, we’re talking a bit about E3 but not enough to make you sick. We’re curious to the fate of the E3 event, is it really done or will it live on? We’re finishing up the RPG history and we take a look back at the Atari title KABOOM! Was he catching bombs with a box, barrel or pie?
Also in the gaming podcast news:
We’ve also got a listener comment pointing out where Jennifer is wrong about rhythm matching games and give away Galactic Civilizations II: Dread Lords.
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Hi guys.
Thanks for the episode. It was intersting and funny as always 🙂 To your question of the week: I Played Portal the first time last year. Of course i completed it very fast, but this was a PC game i played about 10 years after its release 🙂
For Console games, it must be some of the first 6 Mega Man Games … i don´t remember which ones i played as a kid, but of course not all of them. So i decided to play through the first 6 Mega Man games last year 🙂
I like to play all the old games, i missed in my youth, but as you know: now (as an adult) you got the money to buy games, but you dont have the time anymore to play all of them 🙂
Jonah: Archon is a really great game! I loved it as a kid, even i did not understood it at all 🙂 (I am born in 1980, so i was 4 years old, when Archon was released, and i got my first C-64 when i was 8).
So thanks again guys and keep gaming 🙂