This episode is a short one as Jonah flies to Los Angeles in the morning. There’s a followup to the Grand Theft Auto 6 leak, and Aaron Judge hits his 61st home run.
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.
You’re looking to pickup a copy of Guitar Hero World Tour, but you’re currently unsure which bundle does what and how much each will cost. That has now been made clear and gamers can go about their holiday shopping business later this month (Oct. 26th) to pickup the bundle of their choosing.
“And, if $190 just isn’t enough money to spend for you, Red Octane is also offering a special $240 deluxe full band kit bundle that also comes with an XL t-shirt, battery charger, key chain, and guitar case. This deluxe kit is available for both the Xbox 360 and PlayStation 3 versions, with a $220 deluxe kit offered for the PlayStation 2 and Wii.” (1up)
One other thing that 1up observed in this pricing structure: Guitar Hero with guitar controller was $70, Guitar Hero II with controller was $80, Guitar Hero II on the Xbox 360 with controller was $90 and, of course, Guitar Hero III with controller was $100. Are we slowly being brought to the price point that these publishers want to reach? It seems they’re drawing us slowly to higher values as we continue to purchase into their schemes.
Granted, their schemes are fun as all heck so we’re willing to pay to play, but where will it end? Fairly soon we’ll be paying more money for our controller and rock genre style game than the console hardware with extended warranties.
As promised, the second half of the two hour long podcast, in which there’s a long, long ramble about pop culture and potential future specials with Paul and company.
The other news items included in the podcast are:
The next podcast will be recorded live at E3’s show floor in two weeks – stay tuned!
Hi guys.
Thanks as always 🙂
I played a lot of Magic the Gathering because a new expansion was released. And since wrath of the Koch king classic was released for WoW I got back to it for a lot of hours 🙂 I already wrote that to episode 663 which I listened directly before this episode 🙂
First of all: enjoy your holiday in LA Jonah!
Death stranding? Chapeau! I was so damn excited for this game and I was so hard disappointed … can’t remember whenever a game disappointed me that much. I think I managed to play 10 hours to give it a try, but I don’t think I will ever return to it 🙂
GTA6 Leak: I think the only GTA I played was the first one together with a friend sitting together and he played it, I watched it 🙂
KOF: isn’t there a new Street Fighter coming? I don’t know anything about KoF per Samurai showdown … only Street Fighter 🙂
Sorry that I can’t say so much this time, but I don’t know what to say regarding games I don’t know 🙂
Please stay healthy and keep on gaming!
Greetings from Germany
Ralf