This week’s episode takes a look at the excitement caused by Devil May Cry 5, as well as some more discussion about upcoming games.
The news includes:
Let us know what you think.
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.
Sony’s been talking about how they’ve overtaken the Xbox 360 here in the States, perhaps this is because Microsoft shifted their attention to pwning them in Japan? Xbox 360 sold 25,000 units to PlayStation 3‘s minor 9,673 units according to Edge Online, that’s 2.5 times more if you’re into that math thing.
Seriously though, Microsoft didn’t really shift any effort, they just got a Japanese style game called Tales of Vesperia from Namco Bandai. Go figure, when a Japanese focused game arrives for a console Japanese gamer will go out and buy it.
The big barrier to the 360 in Japan is the games and their contents. Microsoft is in tune with the needs and demands of the United States gamers, it usually involves FPS titles and excessive killing. Japanese gamers are not exactly huge FPS fans, we’ve seen the Asian community dominate in RTS style games (Starcraft is a great example) and they’ve always had interest in MMO’s, especially micro-transaction based games and we all know that’s the land of Final Fantasy. Is it so surprising the Xbox 360 moves off Japanese shelves when they have a game or two the gamers actually want to play?
This is only partly Microsoft’s fault, Microsoft doesn’t specialize in Japanese games anymore than Square Enix excels at western style games. The big difference? Square Enix doesn’t manufacturer its own console hardware. It is Microsoft’s console and they should have an interest in making games the Japanese people will like, thankfully Namco Bandai came through for them this time!
This week we’re talking about pre-owned video games and ask the question, do you buy new or do you buy used? Do you sell your games? We answer some listener comments and hit on a few hot topics:
We’ve also got a bit of history on The Golden Age of Arcade Games and we take a gaming flashback to Mario Brothers, the original non-super version.
