• Ever wanted an RSS feed of all your favorite gaming news sites? Go check out our new Gaming Headlines feed! Read more about it here.

Aztechnology

Community Resettler
Avenger
Oct 25, 2017
14,134
Not too long ago, I would consider us to have been in probably the best time period for physical media (For consumers) just in that the upfront costs on launch, were lower than they'd ever been thanks to Best Buy Gamers Club and Amazon's bundle in services for 20% discounts. After Best Buy announced the end of their program, so too did Amazon (Now both simply offer a $10 credit on some games). That was lost, and maybe needfully so. But I'm curious for those who are in the retail space and made orders, potentially even run their own game shops. What kind of margins are you looking at? Is there economy of scale working for you, does your volume of sales allow you to get better pricing?

I'm curious if discounted or razor thin margins, subsidized by a low/moderate monthly fee is something that's even feasible for anyone outside of the biggest supply chains. Or was it even feasible for them? I realize they were not making money on those sales, or if they were it was minimal and probably was absorbed by the time/work/effort and time loss due to it. So at best break even which doesn't yield the kind of results they care to invest time into.

To get to the point
What price do you have to charge as a relatively small game store owner/operator, to break even for the game itself independent of operational costs? (Feel free to PM me on this if you're not willing to share publicly, I won't share either). And are you required to sell some titles at MSRP or at least in line with allowed promotional parameters? Where and how are you placing orders for games for retail sales, are there minimum purchase requirements (Again does economy of scale factor in?).
 

ASaiyan

Member
Oct 25, 2017
7,228
The problem was not that Best Buy and Amazon weren't breaking even; in fact, they were just remitting their full retailer cut on to their customers.

The problem was that publishers were getting pissed off at them for "devaluing" their games at launch. Especially when many of them were selling digitally on their own storefronts (where they pocket more of the sales price) at full MSRP.

Both retailers were willing to "eat" game sales for their premium customers, in order to convince them to keep paying for their premium subscription, and to get them "in the store" to buy other, higher-margin items. It's the publishers who ultimately pulled the plug. Can't sell at a discount if your suppliers won't even give you the product anymore.
 
Last edited:
OP
OP
Aztechnology

Aztechnology

Community Resettler
Avenger
Oct 25, 2017
14,134
The problem was not that Best Buy and Amazon weren't breaking even; in fact, they were just remitting their full retailer cut on to their customers.

The problem was that publishers were getting pissed off at them for "devaluing" their games at launch. Especially when many of them were selling digitally on their own storefronts (where they pocket more of the sales price) at full MSRP.

Both retailers were willing to "eat" game sales for their premium customers, in order to convince them to keep paying for their premium subscription, and to get them "in the store" to buy other, higher-margin items. It's the publishers who ultimately pulled the plug. Can't sell at a discount if your suppliers won't even give you the product anymore.
Got it, that's the kind of answer I was looking for. Do we know that publishers were threatening to withhold the games?

Have they implemented more requirements for price alignment since? I remember running into that at Best Buy at times when I was working there. When doing the adsets and such.
 

ASaiyan

Member
Oct 25, 2017
7,228
Got it, that's the kind of answer I was looking for. Do we know that publishers were threatening to withhold the games?
From the selection of games that were inexplicably unavailable to preorder until the day Amazon changed its policy, we can assume it was Sony (Spider-Man, others) and Take Two (Red Dead 2). Might've been others who were unhappy behind the scenes as well.