Ka-CHING!
Did you hear that? I think ... yes it was! That was the sound of money.
What makes the world go around? No, silly, not the earth's core! I'm talking about currency.
It all started years ago when mankind invented trade. One would trade one item with another of equal value. Sometimes this meant that you have to give more of your item to receive the other item. Sooner or later, people gold and other materials to pay for their articles. But, seeing as these were too heavy to carry around if you have it in large numbers, banks were invented. You went to the bank and deposited your gold. In return you received notes on which were written how much that note was worth in gold. You could turn in this note at another bank and get back your currency.
THIS, is what makes the world go around. These notes became the standard currency combined with coins. For working a set time you received a certain amount of money. That money could be spent on articles, thus giving the companies money that give the money back to you so you can purchase their products.
The industry has always followed a similar line in the sense of buying and selling.
The woodchoppers chop their wood and sell it to the factory.
The factory process the wood and make a product out of it. They sell that product at: The same price + Cost + profit.
The bulk supplier bought the product and sells it again at: The same price + Cost + Profit.
The warehouse supplier bought the product and sells it to the stores at: The same price + Cost + Profit.
And this is just the simplified version. Because there's also taxes and whatnot involved. Everyone needs to make money and everything you do costs money. Thus raising the price exponentially.
In the end, the price for a simple disc with a program on it could cost 60 bucks. But it shouldn't. Wanna know why not? Okay, listen up: Stores are not allowed to sell a product at loss. Which means they can not lose money selling a product. Now, let's take the last gen games. Most of them cost 60 bucks when they were released. Yet, the stores are selling them for 5 - 15 bucks at the moment and getting away with it. Which means they aren't selling them at a loss because the only time allowed is in the sales period.
So, the price for games is just insane. What the hell is costing this much? If the stores buy the games at such a low price, then why the fuck do they cost that much? I know that the starting price is always high. Just look at the playstation 3 and the PSP GO. They had a high starting price because of all the work put in to them and the quality of the machine. But now, years later, the PS3 is still insanely expensive. Luckily there's talk of a 100 bucks pricedrop. BUT STILL.
On the flipside of the equasion you have the fact that if games didn't cost this much, the gaming industry would look a lot different. Why? Because if the prices were low then people would buy them more easily. If people would buy them more easily then the gaming industry would look a lot more like the movie industry where the good movie bad movie ration is 1 to a thousand whilst in the gaming industry, you have to work to get the money's worth. Of course, there's still developers that only make a game to make a quick buck, see movie based games or trend based games or games for girls.
Meh, this has been my two cents on the matter. Final word: Lower the prices faster and have a lower starting price of about 45 bucks.
Peace out!
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I know wal-mart pays around 48-56$ on a new title when they come in on the truck. (i used to work there, don't judge me). Sometimes they buy a massive shipment of something that will sell well, and get it for about 1/2 of retail price. But they are still paying a chunk of change.
As for Last Gen games selling for 5-15$, it's easier to take a loss on something that wouldn't sell if you didn't drop the price, and replace it with a new 60$ title that will sell.
Stores are not obligated to make a profit, but why else would they be in business. They are not allowed to sell below MSRP with the exception of storewide sales. However, this doesn't apply to clearances and liquidations. Stores are going to eventually do their best to liquidate a product that doesn't sell, such as Last Gen games for 5-15$ and other games that have been sitting on the shelf for more than 8 months.
Also, when the Wii Launched, I have a friend who works at wal-mart as a sales manager or whatever they call them, and he brought the sales sheets with him.
Wal-Mart makes absolutely nothing on Console Sales, which absolutely blew my mind. Their price was 249.98$...sales price was 249.99$.
I'm just talking about wal-mart as an example...
I do agree though, prices on games are too high, but, developers gotta eat.
Also sorry for the double post..I got ahead of myself. =(
Americans have it easy. Here in Australia a game undeer $90 is considered LOWERED already. Not to mention big name titles will sell for over $100
Margins are fucking insane when you get in and look at how LITTLE retail is making off some sales. It blows my mind, like Woodbutcher said. Target has been doing a lot of electronic clearanceing in the past year: you should definitely check a few stores out if you want some cheap games (L4D 360 under $20 new, POP $30 new).
fuck australia. you little pussys can't even stand up for yourself and vote better game standards. you ain't got no freedom. independence day bitch. fuck yo couch. we got it easy because we're the best goddam country on this earth you fucking pussy.
Look at the developer costs... making a video game nowadays is akin to producing a movie and can even be more expensive. The publisher/distributor of the game then also takes a cut of profits and the console maker also takes their cut (and does testing/inspection to ensure the game doesn't have problems with the system). Sony and Microsoft make much more off of games than they do from consoles which is why they can afford to take a small loss on the consoles early in the console release cycle.
Regarding console profits... they generally sell at a loss, but over time it becomes cheaper to produce the initial parts and they can gradually make a very small profit on the consoles, though again the competition factor often pushes the price of the console down again to a point where they are either making a minimal profit or none at all.
... and at $60.00 a game, they still have to sell a LOT of games for the dev to recover costs before ever seeing a profit. Often they don't which is why you see devs being bought out or going under.
It's a tough business!
I do agree that games should be relevant to their costs though, but.... Killzone 2 had a lot of money that went into creating the game, whereas games such as movie rip offs often have much lower costs... however, if the low-cost games were sold at a lower price... then competition might see fewer people buying the quality games. Like movies, they are all priced pretty much the same on release to provide a fair market for those that spend the money to build a "blockbuster". Of course, down the road you usually see the cheaper games get cheaper prices, so if people want to pay less for a crappy game... they can just wait awhile after release and do so.
Eh... it's a system that seems fair considering the risks involved.