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Digital game pricing
- Thread starter Sir Guts
- Start date
I actually didn't know about itch... but I know steam is the most out of all the main retailers (GMG, GOG, etc.)
Prices are not determined on the basis of production costs, let alone marginal production costs, but rather by customer willingness to pay.
GOG and Steam both take 30% cuts, unless GOG lowered its rate recently. The 30% rate is pretty standard for digital software distribution (iOS App Store, Google Play Store, PSN, MS/Windows/Xbox Store, Steam, GOG, etc.).
The problem with this approach is that (imo, in the UK anyway), MS & Sony will lose (some) sales to either sites such as CD Keys, or their own international counterparts for as long as a game is cheaper digitally elsewhere. I'm sure it won't necessarily be enough for them to take a look at their approach, but ideally it would. e.g. NFS deluxe edition is currently £79.99 on the UK psn store vs ~£60 via the us psn store. That's a £20 (well £19.99 ;0) ) difference for exactly the same product.
If you want GameStop to order the volume of titles you need in you're forecasting, you can't sell it at another retailer for significantly less. They won't buy from you in volume or at the right cost if they feel you are undercutting them. And you want physical retailers to buy as much as you can convince them to - they pay up front, so you have revenue immediately to offset your risk.
There's more margin in digital but More risk. Sony or MS don't "buy units" from you on digital, your customer is the consumer so you don't have any guaranteed revenue upfront till there is a sale. If the game tanks, you're screwed.
At physical retail, yourcustomer is the retail buyer. If the game tanks to consumers but GameStop and others still ordered 200,000 copies from you, well there's at least enough revenue to not have to lay the entire company off immediately.
So, you can't just de-value your product too much digitally. It also trains people to search for and accept lower pricing which could trigger a race to the bottom model and big companies aren't set up for that, forecasts have initial ARPs at higher numbers. It's a slow change over time to adopt other models carefully in planning.
Anyway, some markets operate differently but that's the gist for big box products.
There's more margin in digital but More risk. Sony or MS don't "buy units" from you on digital, your customer is the consumer so you don't have any guaranteed revenue upfront till there is a sale. If the game tanks, you're screwed.
At physical retail, yourcustomer is the retail buyer. If the game tanks to consumers but GameStop and others still ordered 200,000 copies from you, well there's at least enough revenue to not have to lay the entire company off immediately.
So, you can't just de-value your product too much digitally. It also trains people to search for and accept lower pricing which could trigger a race to the bottom model and big companies aren't set up for that, forecasts have initial ARPs at higher numbers. It's a slow change over time to adopt other models carefully in planning.
Anyway, some markets operate differently but that's the gist for big box products.
Eh this mostly an issue with AAA games. Mid size and indie games have very good price points and even better with all the sales on PC for example.
Free games are in better shape than ever. Many F2P games are fun, good quality and fair MTX models etc.
Now, when talking about physical vs digital it is good to remember that many games today require servers and other online infrastructure that needs to be paid for. Games in past also had way less patches, when in todays world constant updates are expected. People will get pissed if a very obvious bug is not fixed so you need to keep people working on game long after it was published.
So yeah no need to build physical boxes any more but instead of physical boxes games have all kinds of other support stuff that needs to be paid for somehow.
Free games are in better shape than ever. Many F2P games are fun, good quality and fair MTX models etc.
Now, when talking about physical vs digital it is good to remember that many games today require servers and other online infrastructure that needs to be paid for. Games in past also had way less patches, when in todays world constant updates are expected. People will get pissed if a very obvious bug is not fixed so you need to keep people working on game long after it was published.
So yeah no need to build physical boxes any more but instead of physical boxes games have all kinds of other support stuff that needs to be paid for somehow.
It really depends where you buy your codes from. I got mine download code from amazon.co.uk on launch day for £41.99.
You get less stuff, you should pay less. That's what I tend to hold to, as simplistic a view as it is -- but then I'm an avid collector anyway and have even been known to buy DRM-free versions of digital-only games, burn them to disc and create my own physical versions.
This argument has doubtless been made any times already, but the feeling of "impermanence" with digital -- particularly on console storefronts, where they're tied to a specific generation of hardware and will one day be "switched off" -- is what puts me off buying anything other than digital exclusives without getting something to put on my shelf.
This argument has doubtless been made any times already, but the feeling of "impermanence" with digital -- particularly on console storefronts, where they're tied to a specific generation of hardware and will one day be "switched off" -- is what puts me off buying anything other than digital exclusives without getting something to put on my shelf.
That's what lootboxes are for... I'll show myself out.
Being serious for a second though, re your point about bugs being fixed, it seems to me that games are being released in a worse state now than they were previously. It may just be me, but I remember games being released after they were finished and tested, as opposed to games today such as Drive Club etc.
Also, how can you justify a discrepancy in price between physical and digital on the basis of servers etc (or did I read that wrong)?
That's how I justify it in my head.
I don't care about games being the same price, but I do wish there were better/more sales on the console side.
Discounted gift cards help though.
Agreed. You still have to pay employees's salaries to update and maintain a digital shop, handle customer service phone calls regarding digital sales, etc.
Physical sales are still needed and I think stores would be pissed off if they were told to sell 20% higher than digital to offset physical costs. So they have to sell at same price point.
But I guess the no bullsh answer to why companies still have so high price points is.. because they can get away with it. Companies seem to be desperate for more money -> mtx etc in single player. They'd increase prices if they could but leaving the "burden" on whales is better from PR stand point than increasing prices for all.
About bugs, not really sure. Only serious bug I remember encountering in recent years is Divinity Original Sin 2 one NPC refused to move from a certain spot and could thus interrupt/fail a quest chain. But otherwise.. I'd say games have LESS bugs than they used to.. say 10 years ago. Or at least bugs are less obvious to me. Maybe I have been lucky?
Sony, Microsoft and Nintendo should create a digital marketplace that can benefit both the consumer and the developer/publisher/console manufacturer. For example...
1. I purchase The Last of Us: Part II digitally via PSN
2. For discussion sake, let's say the cost remains at $60.00
3. Once I am ready, I can sell it back to another PlayStation user, via the PSN platform.
4. For discussion sake, let's say I sell the game for $40.00
5. Of that $40.00, I get my portion, Sony gets their portion and the buyer gets a digital copy of The Last of Us: Part II at a reduced rate.
6. In turn, the buyer, when ready can do the same if they choose to do so.
A few items of note...
1. I don't know the numbers, so I could be wrong, but going digital might be more cost effective for the platform.
2. Allowing content to be bought and sold digitally would give more incentive to consumers to go digital
3. This would put some money back into the ecosystem rather than going to an outside vendor like GameStop
To ease concern all around...
1. When an item can be sold back into the ecosystem is set by the platform holder. For example, I can only sell The Last of Us; Part II a month after release.
2. The sell price can be set by the platform holder. This price changes as more time passes after release.
These are just thoughts, not clearly fleshed out here within this post, but in general, I think they should create a marketplace that currently exists for physical copies but do so for digital versions.
1. I purchase The Last of Us: Part II digitally via PSN
2. For discussion sake, let's say the cost remains at $60.00
3. Once I am ready, I can sell it back to another PlayStation user, via the PSN platform.
4. For discussion sake, let's say I sell the game for $40.00
5. Of that $40.00, I get my portion, Sony gets their portion and the buyer gets a digital copy of The Last of Us: Part II at a reduced rate.
6. In turn, the buyer, when ready can do the same if they choose to do so.
A few items of note...
1. I don't know the numbers, so I could be wrong, but going digital might be more cost effective for the platform.
2. Allowing content to be bought and sold digitally would give more incentive to consumers to go digital
3. This would put some money back into the ecosystem rather than going to an outside vendor like GameStop
To ease concern all around...
1. When an item can be sold back into the ecosystem is set by the platform holder. For example, I can only sell The Last of Us; Part II a month after release.
2. The sell price can be set by the platform holder. This price changes as more time passes after release.
These are just thoughts, not clearly fleshed out here within this post, but in general, I think they should create a marketplace that currently exists for physical copies but do so for digital versions.
dyst
What would be the incentive for MS et al?
1. If you have 100 people selling Shadow of War for £40, then that's £55 (price of digital game) being lost by MS etc.
2. Let's say that the sell price is split 50/50 between you and MS, then that's still £35 being lost by MS.
3. I, as buyer, see your "second-hand digital license" being sold for £40. But, I know that I can get a digital copy from CD Keys for £35. Where is the incentive for me ?
4. If MS therefore decide to let you, the seller, sell your digital license for £30, then no one (outside of the original buyers) would buy the game from MS and they'd only be making £15 per copy.
5. Now you and I may see that £15 that MS makes as a profit, but I honestly believe that they'd see it as a loss.
6. All of the above doesn't even consider the logistics when sales or Black Friday etc are involved.
tldr: I can't see an incentive for MS et al, or for consumers in purchasing "second-hand digital licenses".
What would be the incentive for MS et al?
1. If you have 100 people selling Shadow of War for £40, then that's £55 (price of digital game) being lost by MS etc.
2. Let's say that the sell price is split 50/50 between you and MS, then that's still £35 being lost by MS.
3. I, as buyer, see your "second-hand digital license" being sold for £40. But, I know that I can get a digital copy from CD Keys for £35. Where is the incentive for me ?
4. If MS therefore decide to let you, the seller, sell your digital license for £30, then no one (outside of the original buyers) would buy the game from MS and they'd only be making £15 per copy.
5. Now you and I may see that £15 that MS makes as a profit, but I honestly believe that they'd see it as a loss.
6. All of the above doesn't even consider the logistics when sales or Black Friday etc are involved.
tldr: I can't see an incentive for MS et al, or for consumers in purchasing "second-hand digital licenses".
the only way I see anything working in the Sony/MS/steam's court to give them the profit they drool and cream over would be to let the content "renter" sell it back into the pot by: letting go of their license and get (0.5-0.75) the money back.
Example: PS4 game costs $60 standard price digitally. I play it, want the license gone from my account so Sony/MS/Steam gives me $30-45 added to my account to spend on another game, expecting me to spend another $60 for a full-priced game. All the more reason for them to NOT discount a major AAA $60 game more than 50% off as they would lose some but profit mostly.
My responses...
Probably not much incentive at least not yet. I'm just trying to think outside the box.
1. I think part of my thinking is "if I know that I can sell a game back into the ecosystem, then I'm more likely to take risks and purchase games I wouldn't have otherwise". So in this instance, they would never have gotten my $55.00 but now they will since I can sell it back and get some money in return.
2. I would make the spilt more profitable for the platform holder than 50/50. From a consumer point of view, any percentage is better than zero, since currently we can't trade digital copies.
3. I'm not familiar with CD Keys. I guess it's a PC thing? I was thinking more console exclusive games where there is no other way to purchase digitally. Like Sony first party as an example.
4. You make many good points, my idea isn't without flaws. I'm thinking more a closed ecosystem with no other avenues of purchase.
5. I agree, they will look at it and say "why should we allow for a cheaper transaction, when we can just force them to purchase it full price". I think this business model, if thought out properly can work. I just scribbled some notes down so I know it has flaws in it current form.
Today if I purchase a game on PSN, that's it. I can't return it. I can't sell it. So I'm stuck. Thus I don't make many /if any purchases. However, I'd be more inclined, if I could (for example) purchase Assassins Creed knowing that after a set time (say 6 months) I can sell that digital version and get something back.
6. You're right, right now there isn't much incentive. I'm just throwing out ideas that I would like to see happen. I sell my physical copies to Amazon and Sony gets nothing from that transaction. My idea they at least get something back.
7. For the consumer...anytime you can sell a digital copy and get some money back has to be enticing given that currently you can't do it at all. At least not on system exclusives.
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@ dyst
Sorry, I didn't mean to come across as a critic, I was just thinking out aloud. Tbh, I think your ideas have a lot of merit, I just don't have that type of belief in MS and Sony.
BTW, CD Keys sells Xbox and PS4 digital games along with pc.
Edit: I agree that digitally, it sould have to be a completely closed ecosystem, with no other avenue to purchase digitally.
Unfortunately, I don't think that's feasible unless there's a complete overhaul of how games are purchased. For example, Nvidia, instead of giving away codes for certain games with new gpus, could offer £55 Xbox credit for play anywhere games.
There would have to be exclusivity contracts where publishers would only sell digital codes to MS and Sony etc, and not companies such as Amazon etc.
Then MS et al would buy codes in bulk which meant that they could sell at whatever price they wanted.
I believe that Ubisoft may eventually offer a similar ecosystem to EA Access, in which case if they also offer 10% purchases as a member, and it's only on Xbox, then Sony will really find themselves in a difficult position re prices for digital multi-platform games.
Sorry, I didn't mean to come across as a critic, I was just thinking out aloud. Tbh, I think your ideas have a lot of merit, I just don't have that type of belief in MS and Sony.
BTW, CD Keys sells Xbox and PS4 digital games along with pc.
Edit: I agree that digitally, it sould have to be a completely closed ecosystem, with no other avenue to purchase digitally.
Unfortunately, I don't think that's feasible unless there's a complete overhaul of how games are purchased. For example, Nvidia, instead of giving away codes for certain games with new gpus, could offer £55 Xbox credit for play anywhere games.
There would have to be exclusivity contracts where publishers would only sell digital codes to MS and Sony etc, and not companies such as Amazon etc.
Then MS et al would buy codes in bulk which meant that they could sell at whatever price they wanted.
I believe that Ubisoft may eventually offer a similar ecosystem to EA Access, in which case if they also offer 10% purchases as a member, and it's only on Xbox, then Sony will really find themselves in a difficult position re prices for digital multi-platform games.
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I remember when digital was just blossoming and they said digital games will cost less we don't have to pay for cd's materials shipping and all the other aspect of physical sales so we will be able to pass those savings on to you.
Now they say well now we have digital media expenses and bandwidth etc. all lies all the time. Because storage and bandwidth are substaially cheaper now than before and anything physical.
Digital games should cost $10.00 less than physical for ever game released but they are to greedy.
Now they say well now we have digital media expenses and bandwidth etc. all lies all the time. Because storage and bandwidth are substaially cheaper now than before and anything physical.
Digital games should cost $10.00 less than physical for ever game released but they are to greedy.
But there are companies out there that do offer digital games for Xbox and PS4 at least 10-20% cheaper than the xbox/psn stores from day one. My question therefore, is why MS and Sony can't do the same.
What's the incentive? They also do hold some sales pretty regularly at least Sony does seems like once a quarter they have big sales
Games are cheaper now more than ever (adjusting for inflation). From what i've seen it's only new releases that have the same price digital and physical. Also, in my opinion it's physical trying to keep the price down to match digital rather than digital increasing to match physical.
"This is for the players"...
Granted Sony regularly hold good sales, but the initial orice should at least be the same price as physical, no? Not £5 - £10 dearer.
If digital pricing was cheaper, it would piss off brick and mortar stores.
I am all for that, but doubt it will happen.
I am all for that, but doubt it will happen.
I'm actually willing to pay more for a digital version because I hate physical cases and swapping discs. I'm part of the problem.
Nope you're good. Didn't take it in any way but constructive discussion. Good convo nonetheless.
im waiting to buy mario kart 8, mario and rabbits and mario odissey cause i want digital at less or used game. digital at less give nintendo my money. used games gives nintendo 0
Here in Australia it only makes sense to buy digital if there's a massive PS+ or similar type service sale going on. Almost all AAA digital games cost $100 on the online stores, but you'd be hard-pressed to find an actual IRL store selling the game for that much (outside of EB Games). Depending on the title, some will be selling it from around $60-$70, although the $80 pricepoint seems to be the most common. There have been some huge sales on things like RE7, Horizon, Knack 2, Madden etc. recently that have helped me save $30-$40, but if you don't get lucky with a conveniently timed sale, buying physical is the way to go 99% of the time.
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You basically price things based on how much you think you can get away with, not cost of production and such. I don't think Sony et al. are feeling any pressure in terms of sales going down b/c digital pricing is too high.
As long as retail is a big enough factor, it'll always be an issue. We live in an industry where, for instance, GAME in the UK managed to stop some games being sold on Steam so people would have to buy them in their stores (mostly THQ titles, IIRC). You can bet many publishers would love to offer a slight discount to buy a game digitally. Less cost for them and you own it forever and thus are more likely to buy DLC/MT, and you've taken a used copy out of circulation.
Retail companies will never settle for anything like this, and until publishers/platform holders are in a position to set the demands, it would never happen.
Retail companies will never settle for anything like this, and until publishers/platform holders are in a position to set the demands, it would never happen.
Digital should be cheaper, and it generally is. PSN flash sale is all about giving you good cut for buying digitally, and the games generally go on sale faster than retail anyways. If you really want cheap physical games, then just be patient and wait.
You definitely have rose-coloured glasses on there. There were soooooo many games that released in horrendous states in years gone by.
I remember watching Leaf Corcoran giving a talk about itch.io and his vision in developing the platform, and I think their default was 10%, but the dev could adjust it using a slider if they wanted.
The following video is Leaf giving an overview of itch.io as he set it up, but around the 14:45 time stamp he goes into the cut for itch.io itself. The whole video is worth a watch.
The digital storefront takes about 30% and console manufacturers can't exactly alienate the internet and brick and mortar based retailers they rely on to sell their hardware.
I'm not sure which country you're in, but in my experience this isn't the case in the UK. Here, generally speaking, physical copies are cheaper from day one by at least £5, especially from places such as shopto. Hell, even places like Argos have the physical games at least £5 cheaper.
Case in point NFS: Payback =£60 on psn
https://store.playstation.com/#!/en...tion/cid=EP0006-CUSA05986_00-NFS18PREORDERPCK
Argos are selling the same for £49.99:
http://www.argos.co.uk/product/7071...MIhPLq2dSe1wIVsDLTCh1ITQYHEAQYASABEgLkhPD_BwE
Edit: CD keys are selling the digital xbox version for £49.99, and that's not including the 5% discount you can get.
https://www.cdkeys.com/xbox-live/games/need-for-speed-payback-xbox-one
Xbox.com are selling the digital edition for £59.99
https://www.microsoft.com/en-GB/store/p/Need-for-Speed-Payback---Standard-Edition/C24T681KPGPM
Why would anyone buy the digital edition from the xbox store when you can buy the very same digital edition £10 cheaper from elsewhere?
How is this good business, or even profitable for MS?
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The system is archaic and they are at the mercy of retailers. Steam does it right but they don't need retailers to sell hardware for them.
With the likes of greenmangaming and cdkeys i don't remember the last time i bought a digital game full price
