Jimquisition: Don't Charge Retail Prices For Digital Games

[Eomega123]

Thank god for Jim, and thank god for Steam. Thanks to their sales I'm able to keep myself well stuffed on a large volume of high quality games from the money I scrounge up from between my cushions. As I type this I have two trilogies and both modern Batman games that I haven't even touched because I'm still being entertained by the games I bought for 15 bucks months ago. As long as Steam is up I will never need to by another game at full retail price again.

 

[ThunderCavalier]

Jeez, Jim should start advertising himself as a marketing consultant for video games. He'd make EA or Activision landfills of money.

 

[LazyAza]

Yup Steam continues to be the sole digital platform that sells games at the prices they should be sold at (well most of the time anyway). It really is mind boggling that so many idiots in the industry don't seem to understand why steam is as successful as it is.

SELL OUR PRODUCTS FOR LESS? BWUUUUH ME BRAIN NO LIKEY THAT! >_>

 

[Tono Makt]

While I'm not a fan of digital copies of games (too easy for the publisher to keep control of the game, and too easy to put in a clause in the EULA that the publisher can prevent you from using your game under circumstances they set, for one. Don't want to have to go to a site to download all of my games again if my hard drive/game system crashes is another reason. And there's just something fun about having a physical cartridge or disc in my hands.) I'm totally on the side of Jim on this matter.

But I didn't hear Jim mention three subjects that jump out to me whenever digital media is mentioned - the cost to produce the physical media, the cost to transport the physical media and the amount it costs the reseller to actually sell the game. IE: the cost to print the discs and packages then to ship those discs and packages to retailers for resale, and the cost the reseller incurs simply to stock the game on the shelf then sell it to a customer. I can't imagine that any of these are negligible; it may cost less to create and package 1 million games on DVD than if you were to only create 10,000, but the amount is far more than $0. Ditto for shipping the games to resellers. And no reseller is going to sell a game without at least recouping the costs of doing business; they aren't going to eat the cost of selling the game for a publisher. Business that create the DVD's, the packages and the resellers who sell the actual game are in this to make a profit too, so that $60 game has to cover these costs as well.

So three questions related to the $60 game price:

1) How much of that cost goes to cover the creation of the discs/cartridges?
2) How much of that cost goes to the creation of the packaging for the game?
3) How much of that cost is the profit margin for the retailer?
3a) How much is break-even margin for the retailer?

Common sense tells me that the answer to all three questions is "A noticeable amount.".

And now the flip side of those three questions:

1) How much does it cost to store the game on a server?
2) How much does it cost the host of that server to allow a game to be downloaded from that server?
3) How much does it cost to own, run and maintain that server?

Common sense tells me that if the sum of the answers to the second set of three questions are less than the sum of the answers to the first set of three questions... then the digital games should be less than the physical copy.

So anyone out there know what the answers are?

/will also rewatch this video when not trying to entertain a 2month old baby in case I missed these points being raised.
//will also go through the rest of the thread for the same reason.

 

[Jimothy Sterling]

Sir, digital distribution is a game industry term for the sale of non-physical product. Come on sir, you know that. I did not think I had to spell it out, especially since everyone else seemed to get it. Sir. Sir?

Yes, I know, but as I said, that doesn't make it any less stupid. If a company works in the business of "refrigerator distribution" it means they distribute refrigerators, not that they transport products via refrigeration.

In any case, Jim didn't just say "digital distribution" - he said "digital games." Which is at least 10x as stupid as the "digital distribution" term.

It was a turn of phrase that was easier than saying, "A game distributed through an online storefront such as Origin or a similar virtual goods purveyor" and worked within the context of the video. Everybody knew what was meant because it was established in the parameters of the video. You're getting very hung up on a turn of phrase that really didn't matter.

 

[Metalrocks]

so true. but steam at times is cheaper with some games then the retail version and most of the time they have 10% discount before the game comes even out.
i live in hong kong, and actually the retail version is cheaper then some games on steam. so already there you save up to 15USD or more.
i payed for the retail version of AC brotherhood 280HKD (around 35USD)wile on steam it was nearly 45USD. at the time of release.
even for portal 2 i saved up over 10$ and no, the games are all original, imported from the US.

wile ?As games on origin charge exactly the same price as the retail versions. so when i got my self the retail version of ME 3 and BF 3, it was the same price as on origin.
of course im not one bit surprised about ?A, they would never think of making their games cheaper for download.

 

[jpoon]

Video game Hitler is right, about every bit of this. I completely agree Jim! The best thing I can possibly do is avoid as many of these companies games as possible.

 

[Aardvaarkman]

It was a turn of phrase that was easier than saying, "A game distributed through an online storefront such as Origin or a similar virtual goods purveyor" and worked within the context of the video. Everybody knew what was meant because it was established in the parameters of the video. You're getting very hung up on a turn of phrase that really didn't matter.

It does matter. The accurate use of words is one of the most important things modern humanity has. Using words poorly leads to poor thinking - it muddies waters where they need not be muddied.

The abuse of words means that the actual issues become confused. "Digital" has nothing to do with this issue. By inserting "digital" so frequently into this commentary, he misses what the actual issues are, which has nothing to do with digital or non-digital nature of media or distribution. The same issues would exist if we were talking about direct distribution of an analog medium in physical format from publisher to customer via trucks. The digital format and technology involved are irrelevant.

Jim could have made some solid points here, but his misuse of words ruins it.

 

[Thaliur]

For dual release, digital and retail, the price difference between the two will never happen since the retailer will complain about it and just not stock the game which will result in huge profit drops for them.

For pure digital distribution? Yeah, it should be lower and there are a few that have priced themselves lower and have no physical disks to sell. Minecraft, Torchlight, Terraria, Etc. Granted there's companies like Nintendo and their eShop who are DETERMINED to sell their old games for ridiculous prices, granted they've gotten better on the 3DS one but still.

But if they release both they'll never have a huge price disparity because it'll cost them a lot of money. Be it from GameStop or Target.

And if they don't release both, you can't really tell if the game is just cheaper than others or if it actually is caused by digital distribution.

 

[Maxtro]

Mass Effect 3 PS3
Amazon: $48.41
PSN: $59.99

Personally, I bought it at Best Buy, on sale for $39.99

 

[Altorin]

It was a turn of phrase that was easier than saying, "A game distributed through an online storefront such as Origin or a similar virtual goods purveyor" and worked within the context of the video. Everybody knew what was meant because it was established in the parameters of the video. You're getting very hung up on a turn of phrase that really didn't matter.

It does matter. The accurate use of words is one of the most important things modern humanity has. Using words poorly leads to poor thinking - it muddies waters where they need not be muddied.

The abuse of words means that the actual issues become confused. "Digital" has nothing to do with this issue. By inserting "digital" so frequently into this commentary, he misses what the actual issues are, which has nothing to do with digital or non-digital nature of media or distribution. The same issues would exist if we were talking about direct distribution of an analog medium in physical format from publisher to customer via trucks. The digital format and technology involved are irrelevant.

Jim could have made some solid points here, but his misuse of words ruins it.

The importance of Language is in Understanding. Did you misunderstand?

I picture monocles popping off in utter confusion at such lowbrow usage of the word digital.

Also, Not Sure if Real or Troll

Hope troll.

Also Aardvark only has 3 A's. I feel that this misuse of the word Aardvark is leading to the downfall of society.

 

[BoredRolePlayer]

Thank you Jim, mentioning Persona 1 on the psp was a issue I had with DD software. Why would I buy a digital version when I could get it on the physical medium with the two disc soundtrack (which is good), and this was the thinking I went through when I bought the game.

 

[Aardvaarkman]

The importance of Language is in Understanding. Did you misunderstand?.

No, the purpose of language is communication. This video did not communicate well.

It seems that Jim is upset that publishers are charging too much for games that are "digital." The relationship between the digital nature of the games and their retail price is not clearly explained. Since the games bought at "retail" are exactly the same as games bought "digitally," this is a significant omission. If you're buying the same thing, then why should the price be different?

Of course, that brings up another issue of language abuse: that "digital" games are somehow not sold at "retail." The digital distributors are retailers. Do you think that Steam and other digital distributors are selling you games wholesale? No. You are an individual customer buying from them - that is a retail sale. The digital distribution channels are retail channels.

So, overall, this is an apples-to-oranges situation. Retail is not the opposite of digital. Almost all digital games are sold in a retail fashion, even if it's sold online. The only people who buy games in a non-retail fashion are retailers buying in bulk from a publisher, or studios/publishers buying the rights to the IP of a game.

Is Amazon.com not a retailer just because they don't have storefronts, and conduct their business online?

 

[I.Muir]

Any origin games I buy from CD key house at prices I consider reasonable. But is buying games for the price of a physical DVD also too high. The money going into movies is often higher than that of video games and the profits almost completely ignored next to whether it got a good place in the box office.

It's always been obvious though that what publishers keep on touting, that they are poor so we NEED to enforce increasingly stupid DRM and nickle an dimming you left right and center, is bullshit. If they were really telling the truth they would have the figures to back them up and would be throwing them everywhere instead.

 

[wintercoat]

Mass Effect 3 PS3
Amazon: $48.41
PSN: $59.99

Personally, I bought it at Best Buy, on sale for $39.99

Screw PSN, Origin is still selling it at $60. Their own platform! And they wonder why people think they're retarded. Were it on Steam, it would have already seen a sale for like $20-30, and the price would have dropped to $40-49, and maybe ME3 would have actually sold more than 3 and a quarter million units by now, regardless of the whole ending controversy.

 

[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.

 

[ACman]

Sir, digital distribution is a game industry term for the sale of non-physical product. Come on sir, you know that. I did not think I had to spell it out, especially since everyone else seemed to get it. Sir. Sir?

Yes, I know, but as I said, that doesn't make it any less stupid. If a company works in the business of "refrigerator distribution" it means they distribute refrigerators, not that they transport products via refrigeration.

In any case, Jim didn't just say "digital distribution" - he said "digital games." Which is at least 10x as stupid as the "digital distribution" term.

There's pedantry and then there's pedantry.

A) digital distribution is a widely accepted term.

http://en.wikipedia.org/wiki/Digital_distribution

And B) Seriously Aardvaarkman, everybody apart from you understood that Jim was commenting on the differences between digital distribution and retail but for some reason you want to turn this into semantics debate.

 

[SonOfVoorhees]

Should be different prices, as digital has low to zero cost for distribution, manuals and disk production and pressing as well as cutting out the middle man, namely...computer shops. Digital distribution saves them a fortune in $/£.

If anything digital should be atleast 30-50% cheaper than retail.

 

[Aardvaarkman]

A) digital distribution is a widely accepted term.

But he wasn't saying "digital distribution," he was saying "digital games"!

Just look at the title of the video: "Don't Pay Retail Prices for Digital Games" - that makes absolutely zero sense, because digital games are retail products. It also doesn't make sense, because even if the studios cut the cost of downloadable games by 90%, those would still be retail prices, because downloadable games are retail sales! Whatever they are charging is the retail price.

And B) Seriously Aardvaarkman, everybody apart from you understood that Jim was commenting on the differences between digital distribution and retail but for some reason you want to turn this into semantics debate.

But semantics are very important. Why would you dismiss semantics as irrelevant?

OK, to put it in terms that this audience might be able to understand, it's like saying that 'Star Wars" and "Star Trek" are the same thing because they both have the word "star" in their title.

And again, what is the difference between digital distribution and retail? Digital distribution sales are retail sales. Just because something is sold online doesn't make it something other than a retail sale. It's difficult to make a good argument when you can't get basic terms straight.

He could have easily used "bricks and mortar" and "online" to distinguish the two methods of selling. But instead, he chose to use irrelevant terms that don't actually define the differences. therefore, he undermined his own argument. And I largely agree with his argument, and The Jimquisition in general. I just don't see why he weakened his position as Good Hitler by being lazy about his terms of reference.

 

[weirdee]

eh, i think nintendo offers roughly the same kind of pricing for their old games as they would appear on retro game sites like GoG so i can't really complain too much besides lacking the proper controllers for a lot of them

now, the shovelware apps, they are being overpriced, i think it's mostly because nintendo maintains a certain price level for the entire store so they refuse to go any lower, but honestly we would be better off without some of those games altogether

either way nintendo is really taking it slow technologically in the first place so they are really dragging right now anyway, and given their current stance it is unlikely to change...their online platform is not going to expand until the wii u arrives

3ds shop has a pretty good spread (and not an inch better) to work with though, so at least they're not fumbling like vita right now

i think the current biggest idiot on the market is sony, followed closely by origin