Jimquisition: Don't Charge Retail Prices For Digital Games

[Blade_125]

Jim fails to understand (or maybe never took) the first rule of economics.

Everything is worth what the buyer is willing to pay.

He has valid points, but I can promise you that a company does not continue with a bad practice that loses them money. If digitally priced games are put at that level, its because enough people buy them at release to make it profitable.

Jim didn't say their current digital distribution system isn't profitable. It just would be about bazillion times more profitable if they lowered the prices by five bucks or so, you know, to give ANY incentive to buy digitally.

Here's the 386th rule of economics: You don't just find a price point where it is profitable, you find the price point where it's the most profitable.

That is pretty much what I am saying too Sande, it's just that based on what I know of companies and econmics, they are making enough in sales right now that they don't feel a $5 price drop would increase sales enough to justify the lower price and create more profit. That could be wrong, but the only way any of us are going to drive the change is to not pay full price.

 

[Heaven's Guardian]

If I was a publisher, and people bought digital copies of the games at the same price point as they did the retail copies, why would I lower prices. Economically, you aim to sell your product at its point of maximum profit, and if decreasing your prices doesn't increase sales to the point where you make more money than you would if you left it at its current price, there is no reason for anyone to lower prices just because costs are lower. You just take the extra profit.

Now, I refuse to buy digital myself, but for those people who will, I'd like to know if there would really be a huge initial increase of sales if a minor price cut is made at launch. I doubt it myself, because I will gladly pay $60 if I think a game is worth that much, and if I don't, it won't make a difference to me if it is $55. Unless that five dollars makes a real difference, don't expect to see any discounts for digital. It's just bad business strategy.

 

[Blade_125]

Jim fails to understand (or maybe never took) the first rule of economics.

Everything is worth what the buyer is willing to pay.

He has valid points, but I can promise you that a company does not continue with a bad practice that loses them money. If digitally priced games are put at that level, its because enough people buy them at release to make it profitable.

Personally, I think eventually people will wake up and stop paying these prices. There are so many games to chose from that many people will wait for a sale. Look at the crazy deals that pop up on steam. I see fairly big releases going for $20 less within a few months of release. It is a pretty rare game for me to buy on release now (last one was Arkham city). I wait for a sale on steam, or at bestbuy for a console game. If publishers want to cut out the middle man they need to price accordingly if they want to see their sales increase.

Ah but the crux of the argument here is that by lowering the digital price, they will paradoxically make more money in the long run. What it boils down to is that digital releases cannot be sold back. Thus digital games get rid of the "used game problem". Which by the developer accounts is costing them tons of money.

This is the most I have been quoted in any article (and even by the author no less).

The only way the make more money is if the price drop will increase sales so that overall profit is higher. I can't say for certain if that would happen right now, but as I have said a few times now, the only way we can push companies to do this will be to not buy games at full price.

I do agree on the used game issue. Companies are trying a different approach by taking away the option to buy used, therefore forcing more people to buy new and giving them more profit. A rather underhanded tactic to say for sure.

Of course I don't bother buying used games as they are usually $5 less than a new game (at least in my area). Although I also don't buy many games at release and instead wait a few months for the price to drop. I picked up Kingdoms of Amalur last week for $40, and it came out in the beginning of Feb. That is 3 months and $20 less.

 

[Sande45]

Now, I refuse to buy digital myself, but for those people who will, I'd like to know if there would really be a huge initial increase of sales if a minor price cut is made at launch. I doubt it myself, because I will gladly pay $60 if I think a game is worth that much, and if I don't, it won't make a difference to me if it is $55. Unless that five dollars makes a real difference, don't expect to see any discounts for digital. It's just bad business strategy.

I think digital becoming cheaper than physical would drastically change the digital to physical ratio. And based on publishers complaints about used game sales etc. that would be in their best interest. So it's not so much about increasing sales as it is about diverting them from physical to digital.

And I think a publisher might get more profit out of a digital game sold for $55 than physical for $60. So that's another reason to start shifting towards digital, even at a little lower initial price. It seems like a win-win for publishers - more games sold at higher profit per copy. I'm not at all sure how much cheaper they can afford to sell while still keeping higher profits per a game sold though.

 

[Kojiro ftt]

So does that Sherlock gal have a website? Just wonderin'.

Oh, and +1 to publishers being idiots.

 

[rembrandtqeinstein]

as far as I'm concerned $20 is the most I will ever pay for a game

considering last year's AAA games cost that much its crazy to ever pay more

occasionally a new game is worth that much, torchlight 2 is a good example

 

[JasonKaotic]

The day games go purely digital distribution is the day I stop buying games. I hate digital distribution. Both because I like having a solid copy of something I can hold instead of an icon on a screen, which is more of a personal taste issue I admit, but also because if I trade my money for a product I expect to own that product instead of them just 'licensing' it to me and dictating my use of it.
Think about it. It's like going food shopping, and then that shop bans you from eating the food you bought and also bans you from buying from them again because you ate a cake with ice cream. This is the future of the games industry, and it makes me sad.

 

[FatalFox]

you almost gotta have a standard, it's standard now to charge 60$ of a full retail game, I think that's pushing it, but I'll let it slide, there's printing, packaging, shipping, development costs, countless work hours of creative process and hard work for over 2 years, crunch hours, the list goes on.

I can deal with it...but not for a digital game. With all that physical cost cut out, the workload arguably lighter seeing as how they can work past the "gold" stage of a game where it is originally supposed to be printed and shipped.

if there is going to be a digital future, publishers need to fight for that, stop pricing games the same you do retail, dont riddle it with DRM, codes or dedicated accounts, we've got steam okay?

even if it means publishers can control everything, I welcome a digital future.

 

[Something Amyss]

Basically, it's ripping you off just because they can.

It's not ripping you off if you willingly pay.

Well the term "ripping you off" is subjective. It's how the consumer feels about the price. So if you pay $100 for a game and love it enough for it to feel worth that price then you are not ripped off.

But as the difference between physical and digital distribution are the same as far as the end product (the game itself, at least), it's ridiculous to call it a "rip off" if you choose to go the DD route.

 

[Something Amyss]

So true and i will never understand people who support this kind of shit. I´ve to admit i stepped in a few DLC traps myself but throwing out 60 bucks is on a whole different level.

I think we as a culture have become...Well, I'm not exactly sure what the issue it. People have come to treat games as a necessity and will gladly throw down cash on them even if they feel it's a bad deal. The guy below this post refers to gaming as a cartel. He's right. It's grossly enabled by people who complain all while purchasing anyway.

I'm mostly a console gamer and prefer physical media, though I pick stuff up in steam sales and am not actually against DD. In fact, I'm in love with my kindle, and I have an emusic account. Now, books are something I wouldn't mind having all-digital. And music? I prefer physical copies, but eMusic and Amazon MP3 offer significant price differences much of the time. There are exceptions, of course.

Of course, since Amazon's let the publishers set the prices, books are sometimes in the same boat. My solution is not to buy those books, and I've even emailed both Amazon and the publishers. Other people seem to buy the books and THEN complain and nobody really cares at that point. Unless they misled you about the content, then you have nobody but yourself to blame.

DLC can be justified some of the time, though I usually find it a big waste of money.

 

[Aardvaarkman]

You're arguing semantics, ostensibly. The point was made, and gotten, while you claim it was lost. Clearly it wasn't. YOU knew what was being said, so why are you acting like the point was lost?

Yes, but the problem is that you're poisoning the well. As someone with some amount of influence, you're introducing poor terminology to a new generation of people (particularly given the seemingly young audience of The Escapist), thus dulling their critical faculties, and perpetuating really stupid terms of art. You're basically causing brain cancer.

P.S:

My apologies for my previous posts referring to you in the third-person. I thought "Jimothy Sterling" was a troll/impostor account, seeing as you are credited as "Jim Sterling" by The Escapist. I found out by clicking on the "Jim Sterling" byline that it actually links to the "Jimothy Sterling" account.

So, I guess that's good because it allows me to seek more direct answers. Why exactly did you use a stupid term like "digital games" when all games as we know them are digital?

 

[OldDirtyCrusty]

But as the difference between physical and digital distribution are the same as far as the end product (the game itself, at least)...

This bugs me a bit.
It´s not only about the end product. I`m a console user and my harddrive is limited when it comes to installed data. I have to choose which games i want to install. With a disk i have some kind of safe-factor(this and i like to collect). Installing the game data isn`t a matter of my i-net connection and it`s much faster this way. With digital distribution i buy the game (i can do it from home- which is the only real advantage for me) and then i have to wait....
........................................................................... ....... .... ...
... .. . . So far so good, the game is finally installed. From now on both versions are the same, up to the point where i try out new games and data space is required. After deleting the digital bought copy, it`s gone. I can download it for a replay, while it`s most of the time really no big deal it can get really annoying when my router ticks off or the psn is down again.
There are times i don´t even have a web connection, all in all the retail disk is the safer way to keep games (at least to me). If my ps3 gives up i still have a lot to play after getting a new one regardless of an connection or not.



The whole cartel thing is a bit to much credit for the games industry since i`m still able to purchase cheap games (some used, some bargain bin). J.Sterling took a few good points about the prices. I would love to see some numbers to compare the sales, because i just can`t believe that there are many people buying over psn or live for full price (pc seems to be different with all those nice steam sales). One other thing where they seem to shoot themselves in the kneecap are these cheap game of the year editions with every single dlc included (this was already an Jimquisition episode). I tend to rent the big titles first. Most of the time there`s no need to replay them for a longer time period. When the time is right i buy the game of the year edition. These days i try to get away as cheap as i can and i bet i`m not the only one.

If they start to sell games for 45 instead of 60 i would give digital distribution a chance.

 

[MrLefty]

To sum up.

Digital copies are less valuable to consumers: we have fewer rights, we can't onsell them, we have to use bandwidth (that costs money) to get them, we have to buy hardware to store them (rather than them being on a disk), we don't get any packaging artwork or physical extras, there's no physical manual - it's a less valuable product to us.

Digital copies also cost less to make, sell and distribute: no physical media or packaging costs. No transport costs. No retailer middlemen.

Ergo? They should be cheaper. MUCH CHEAPER.

Then with an added discount because the bloody publishers should be trying to do everything in their power to convert us across to their clutches. If they had any sense.

Jim's right: if you can't do this, publishers, then stop whinging about second-hand sales and retailers.

 

[Ritchian]

I'm a PC gamer, and an avid Steam user. However, out of the last five major AAA releases I've purchased, I've bought four of them on physical discs. The price has been exactly the same, and aside from pre-order bonuses that usually aren't worth it, there has been no difference between buying the physical disc or the digital code except that with the disc, I have the added bonus of not having to download gigabytes worth of data before I start playing. I have no incentive to buy online right now. That one game I bought digitally? I only did it because I couldn't find the game out in the wild that day and decided to grab it off Steam.

The pricing scheme needs to change. If digital is the future of game distribution, then prices need to drop fairly dramatically to compensate for the savings of not having to have a physical presence. The vast, vast majority of Steam games I've bought have been on sale - usually steep sales. I've got about three or four games right now that I'm waiting on the next big sale to buy because the price is so inflated otherwise. Distributors need to lower their prices if they want me to start cutting out the middle man for them on newly-released games. Otherwise, I'll just take a trip over to the nearest Best Buy or what have you and buy a physical copy of the game.

 

[Jimothy Sterling]

I understand it perfectly, but part of the point of these videos is to highlight to consumers that they *should* demand better and not be so willing to pay. I don't think that's a failure on my part, more like a plea for long-term common sense.

You said yourself that people will wake up and not pay. I am trying to help that move alone, while also appealing to the industry to secure against that long-term eventuality by being competitive NOW. They want digital to take off, but the market demonstrates that you only really beat a rival when you offer better. Right now, the publishers aren't offering better.

Well I think this is the first time I have seen an author read comments, which I think is fantastic.

I also think I slightly misunderstood some of your video Jim, as your comment here sums up my thoughts completely. Customers do need to wake up and realize they have the power to dictate what a corporation does, but it isn't with protests or cupcakes. It's with their wallets.

I think trying to convince companies to change before sales start falling is a waste of breath, but hopefully there will be some visonary in the future who sees the advantage theyc an gain by being first on the bus.

Also I wanted to mention I really enjoy your shows. The past 4-5 have been fantastic. It's nice to have something to look forward to on the Escapist.

Well thank you!

Yeah, the problem with a rant video is it's easy to misunderstand. Obviously I am under no delusions that EA's CEO will watch my vids and say, "My God, he's right, WHAT HAVE I DONE?" I can at least hope a few viewers will realize they can expect far better from this industry.

I think many gamers are getting more aware of that, as evidenced by some of the consumer outcry we've seen lately. It's pretty encouraging.

 

[Jimothy Sterling]

So, I guess that's good because it allows me to seek more direct answers. Why exactly did you use a stupid term like "digital games" when all games as we know them are digital?

For the reason I already gave. It was a useful shorthand term, better than saying, "A game sold through a virtual storefront." Nobody in the gamer community uses the term "digital games" for, really, anything else.

Yes, technically all games are digital, but the term digital has come to be associated almost exclusively with digital distribution. Just like how "artificial intelligence" means something quite different from what gamers call "AI," the term "digital" has a generally accepted new meaning when applied to videogames. That's the best thing about the English language, its mutability.

 

[Aardvaarkman]

Nobody in the gamer community uses the term "digital games" for, really, anything else.

If true, that's just one of the many really fucking stupid things about the "gamer community."

If you wanted a shorthand, why not simply "online distribution"? That's also only two words.

 

[Jimothy Sterling]

Nobody in the gamer community uses the term "digital games" for, really, anything else.

If true, that's just one of the many really fucking stupid things about the "gamer community."

If you wanted a shorthand, why not simply "online distribution"? That's also only two words.

Because I chose something else.

 

[Aardvaarkman]

Because I chose something else.

Yes, something that doesn't make any sense, and undermines your argument. Also, you say that this is a normal term used in the "gamer community", but I've never heard "digital games" used to describe online distribution until now. Yes, "digital distribution" is fairly commonly used, but not "digital games."

The poor choice of words just underlines the weakness of your arguments. You never actually explain why "retail" is somehow worth more than "digital games." And your response to criticism is simply "because I said so" rather than anything rational that might shed light on the issues.

 

[Jimothy Sterling]

Because I chose something else.

Yes, something that doesn't make any sense, and undermines your argument. Also, you say that this is a normal term used in the "gamer community", but I've never heard "digital games" used to describe online distribution until now. Yes, "digital distribution" is fairly commonly used, but not "digital games."

The poor choice of words just underlines the weakness of your arguments. You never actually explain why "retail" is somehow worth more than "digital games." And your response to criticism is simply "because I said so" rather than anything rational that might shed light on the issues.

It made perfect sense due to the fact that everybody knew what I was talking about. When something does not make sense, people do not understand it. Even YOU did, the guy who has the problem with it, and by this point, this argument is become inanely circular. End of the day, I chose a turn of phrase that you don't like. Simple as.

I've responded perfectly validly to your criticism. I explained multiple times, in multiple ways, why I said what I said, and your response has simply been to repeat yourself. This has become a farce.