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Ars: Gamestop - 75/25 split Disk to Digital PS5 Allotment

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Ignore the CAG commentary, this is likely more accurate. We should assume this is the same across the retail space.

Each DE costs them an incremental $80 loss, so why make more when everyone will just upsell to the disk version without stock and you don't have to eat the loss.

You don't need the standard to drive digital adoption, but you do need the DE to say you "Start at $399"

Few snippets:

Ars was able to confirm the initial PS5 preorder allocations for nine separate GameStop locations. All told, roughly 24 percent of the stock available at these locations was taken up by the Digital Edition, with the remaining 76 percent for the Standard Edition.

The Digital Edition ratios at individual locations ranged from 13 to 33 percent of all the available PS5 preorders, with 20 percent being the most common ratio. Each individual GameStop location in our sample received anywhere from 15 to 30 PS5 units total, with 20 being the most common number.
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A lack of Digital Edition consoles could also reflect a desire by Sony to maximize hardware revenue at launch. Since the disc drive assembly in the system likely costs much less than $100 for Sony to produce, the Standard Edition likely brings in better profit margins. A Digital Edition sale might be worth more to Sony in the long run, though, as software sales to those customers will avoid any cut to retailers.
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Link below:

https://arstechnica.com/gaming/2020...-fewer-digital-edition-systems-for-pre-order/
 
ianpm31

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I preordered the DE from Gamestop but I would imagine they probably frown upon it. Only way they could make money off me is through accessories and I'm sure Sony knows everything will sell out anyway so they may want to maximize hardware revenue because they are for sure losing money on the DE.
 
Blanquito

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yeah I can see sony having reduced digital numbers to help cut costs.

but one question I have is - are the stores (and I mean at a corporate level, not at the location level) ASKING for more of the disk version? I would suspect there's some negotiation in there with retailers, and I would think that they want the disk version to be able to also sell games (with the console itself and also in the future). So I wonder if that has an effect, and if it does, how large it is.
 
OP
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TitanicFall said:
Think about it. Why would Gamestop order alot of digital editions?
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You will still buy all the accessories there. Everything they get will sell and they can push you to buy the other stuff.

The retailers may shift their allotments some, but broadly speaking they will sell everything they can get their hands on. Its a reason to get you in the store. Best Buy Canada had 19k disk and 3k digital available.
 
Mathieran

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that's about what I expected. I was thinking maybe 2/3 physical, not far off. I'm guessing over time it will be easy to get whatever version you want.
 
Lump

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TitanicFall said:
Think about it. Why would Gamestop order alot of digital editions?
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Buying a card with a digital download code is still a thing. Not as lucrative for GameStop is all games were physical disks, but for moms / grandmas / family that comes in to get their kid a game? Here's a card with a download code.

Obviously Gamestop is in a more perilous position with this shift, but it's not out of the question for them or other retailers to stock Digital-based systems for this reason.
 
poklane

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Not surprising as Sony without a doubt takes a MUCH bigger loss on the Digital Edition. After launch I expect that the split will slowly grow towards a 50/50 split.
 
Kyoufu

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I think it'll be a lot closer once short-term costs are reduced, maybe 6-12 months into the generation.
 
Freezasaurus

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It makes more sense to make more of the more expensive model if they're the exact same machine on the inside aside from the disc drive.
 
Jroc

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There must be a pretty significant loss on the digital edition if they're not pushing it hard even with the PSN lock-in.
 
Curler

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I think it's also based on expectations. "How much in demand will a digital-only console be?" Could be there seeing how things are, rather than allocating too many. Maybe based off Xbox SAD results?

Lots of factors, not just "Gamestop doesn't want it".
 
JimD

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TitanicFall said:
Think about it. Why would Gamestop order alot of digital editions?
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I doubt very much that Gamestop is dictating how much stock they're allocated. What's the alternative, retailers are only asking for a small percentage of the DE's available? People will just go buy them direct from Sony, and then Gamestop loses out on those sales completely.

It's more likely that this reflects what Sony is putting out into the market.
 
EssBeeVee

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Lump said:
Buying a card with a digital download code is still a thing. Not as lucrative for GameStop is all games were physical disks, but for moms / grandmas / family that comes in to get their kid a game? Here's a card with a download code.

Obviously Gamestop is in a more perilous position with this shift, but it's not out of the question for them or other retailers to stock Digital-based systems for this reason.
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especially those that don't own a card or paranoid about storing their data online
 
RadzPrower

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Well, that makes the prospects of me making an impulse buy of a PS5 much less it would seem.
 
T-Virus

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Good. With the way prices on games are going over the world, physical is here to stay

oops. I though this was preorder numbers
 
Scuffed

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The digital will become a collector's item if retailers are resistant to selling it lol.
 
OP
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Jroc said:
There must be a pretty significant loss on the digital edition if they're not pushing it hard even with the PSN lock-in.
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Assuming a BD drive is $20, each DE sold is an incremental $80 loss.

The market is already shifting digital (north of 50% now), they don't need you to have a digital console to make that happen.

They wanted to market off of $399, but don't want the incremental loss thus they don't make it available. Look at NVIDIA with the 3080 and look at the 20GB PS3 for examples.
 
mugurumakensei

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Jroc said:
There must be a pretty significant loss on the digital edition if they're not pushing it hard even with the PSN lock-in.
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im guessing Sony originally intended $549/$449 to not bleed so much (Then MS's prices got announced). It's likely they're losing $120+ per unit on Digital Edition.
 
henhowc

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Probably a combination of limited stock and retailers not necessarily wanting to sell an all digital console as that means no one comes back to them for games.
 
Sydle

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I have to admit that making the digital version just to have the starting at price lower was a brilliant move.
 
ShapeDePapa

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Not surprising considering the money they msut loose with every DE unit produced lol.

I wonder if MS will go 50/50.
 
jroc74

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Right this and everything in the OP makes more sense.

The disc version has to have better profits for the actual console sold.
 
Freezasaurus

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mugurumakensei said:
im guessing Sony originally intended $549/$449 to not bleed so much (Then MS's prices got announced). It's likely they're losing $120+ per unit on Digital Edition.
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Personally, I don't believe they really needed to try and compete with Microsoft's pricing. The Playstation brand and the first-party titles that come with that are enough to get people to spring for the extra $50. That said, we're in the middle of a pandemic, so it's best that they do make it as appealing as possible.
 
ElephantShell

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I'm thinking Sony assumes the early adopters will be willing to get the more expensive one and over time the digital edition will become more common to pull people in who sat out at launch.
 
CrichtonKicks

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I think the ratio will shift dramatically as the generation goes. DE is a great option but a lot of people, especially early adopters, are going to want to hedge and have the disc option for whatever reason. I know that's the case for me- I buy most of my console games digitally and, like most, I've been exclusively digital on PC for more than a decade yet disc was still my preferred version of the PS5.

Just as we've seen digital ratios of games grow dramatically over the course of this past generation I think we will see the same on hardware. Once the initial rush is over and consoles are readily available at retail, Sony will shift their manufacturing ratio based on actual demand of each edition.
 
AegonSnake

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Yeah, Sony is losing A LOT more on the $399 version so they dont want to sell it just yet.

Some math.

  • $450 BOM
  • $430 BOM Discless
  • Shipping and Retailer Cut Costs: $80 on PS4
  • $110 Loss per Discless Console.
  • $30 Loss per Physical Console.
The $399 console is basically so they can have a console at $399. They are shipping 10 million consoles. If only 2.5 million of them are Discless, they will only take a $275 million loss from the discless edition. For the other 7.5 million, the will take a $225 million loss. Much more manageable.

I am pretty sure that once the prices go down, the discless is the console they will push and I fully expect the ratio to switch 4:1 in favor of discless since it's the one that guarantees them a 30% on every sale. but i guess thats at least a year or 2 away.
 
Garrett 2U

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Of course. The $399 digital edition is an $80+ (even higher right now) loss that they'll never get back on most sales.

And it seems like the cost of the components in these consoles really isn't going to be going down, besides the SSD.
 
digitalrelic

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Sounds about right. Glad I was able to nab a Digital Edition.
 
Kewlmyc

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I assume anyone who managed to get a preorder day one, aka a gaming fanatic, would be the kind of person to prefer a physical edition.

Most of the digital editions I assume will be from parents who want to buy the cheaper option come this holiday season. Kinda like with the Switch lite.
 
Kill3r7

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Lump said:
Buying a card with a digital download code is still a thing. Not as lucrative for GameStop is all games were physical disks, but for moms / grandmas / family that comes in to get their kid a game? Here's a card with a download code.

Obviously Gamestop is in a more perilous position with this shift, but it's not out of the question for them or other retailers to stock Digital-based systems for this reason.
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Click to shrink...

I though Sony stopped selling digital codes. You can still buy PSN credit.
 
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