Why are new games still $59.99?

[Oobgarm]

Portal 2 and Mortal Kombat have been out for a little over 2 weeks now. Both $59.99.

Right now on Amazon, they are $34.99 and $39.99, respectively.

The same thing happens with nearly every single game release anymore. Buying things day 1 is getting to be a huge waste of money unless there's a lucrative pre-order bonus or something. Even then, it's probably not worth $10-$20 for some dlc or stupid trinket that's not even worth a couple bucks.

I guess I'll answer my own question...I know that publishers make more money back on those early adopters, but more and more people are waiting for sales, especially with the prices of gas and other commodities on the rise.

People wait for things to get traded in to buy used, too. How about this to curtail some of those lost profits to Gamestop? Why not just drop the price of new software to $39.99, have high sales for a longer period of time, and then make Gamestop give less in trade and therefore make less profit in the process? Seems like a good idea to me. Better to sell more at less profit, then have a strong initial rush of sale, then have to suffer lowered prices later.

(I'm glad I got my Portal 2 for $49 and Mortal Kombat for $30 at launch, thanks to a luckily-timed trade-in and a coupon, but still...I could have saved money on this sale.)

[NYLatenite]

3 Reasons...

1.) The major game publishers don't make their money when you buy a game - they make it when the place you bought it from buys the game - so when you see a sale like that, it's not affecting the money the game's publisher made off the game in the least - it's that the retailer has a ton of inventory and needs to move it. In short, MS/Sony/Nintendo/EA/Ubisoft etc had made their money long before the sale price ever went into affect. The only place they may lose is on re-orders, which is why when a game that's popular enough to get re-pressed is released, it's often a GOTY edition with new content and a new price.

2.) Let's say the publishers did lower the cost retailers pay for their games - the same thing would still happen - early adopters would snap the game up at the new lower price, and the rest would wait for the inevitable "oh crap, we have how many of that game left?" sale prices. All that's happened now with that is the publisher has made less money. The retailer probably did too, since at the lower cost, the profit margin would probably be a bit smaller too.

3.) That price may not even be due to demand, but rather an understanding that games have a very limited shelf life due to how often new releases come out, and there's only a small window in which the retailer stands to sell their inventory - and when a competitor decides to drop a price to lure customers in to buy their remaining inventory, you better do the same, otherwise you'll be left holding the bag. Smaller profits are better than no profits at all.

One last note here - Amazon had Portal 2 for $34.99 even before the sale (If you want to count their $20 credit deal) - the only time the game was actually $54.99 (Amazon had it $5 off from the start), was in the week or two after it was released.

[j_factor]

I didn't think they should've been $59.99 to begin with, and the fact that they still are is very annoying. On PSX, the standard price for a new game dropped by $10 after the system had been around 2-3 years.

[c0ldb33r]

I remember paying $100+ for Super NES games

Good question though. I think we were spoiled by the prior generation when everything seemed $10 cheaper.

edit: Rather, I remember *my parents* having to pay $100 for SNES games. Explains why I didn't get many Super NES games new.

[Streetball 21]

Yup, and I cant believe back in the day I paid $69.99 for Top Gear Rally and MRC on N64....

[hbkprm]

lucky its not likr the neo geo $100+ per game in the 90s

[Oobgarm]

3 Reasons...

1.) The major game publishers don't make their money when you buy a game - they make it when the place you bought it from buys the game - so when you see a sale like that, it's not affecting the money the game's publisher made off the game in the least - it's that the retailer has a ton of inventory and needs to move it. In short, MS/Sony/Nintendo/EA/Ubisoft etc had made their money long before the sale price ever went into affect. The only place they may lose is on re-orders, which is why when a game that's popular enough to get re-pressed is released, it's often a GOTY edition with new content and a new price.

2.) Let's say the publishers did lower the cost retailers pay for their games - the same thing would still happen - early adopters would snap the game up at the new lower price, and the rest would wait for the inevitable "oh crap, we have how many of that game left?" sale prices. All that's happened now with that is the publisher has made less money. The retailer probably did too, since at the lower cost, the profit margin would probably be a bit smaller too.

3.) That price may not even be due to demand, but rather an understanding that games have a very limited shelf life due to how often new releases come out, and there's only a small window in which the retailer stands to sell their inventory - and when a competitor decides to drop a price to lure customers in to buy their remaining inventory, you better do the same, otherwise you'll be left holding the bag. Smaller profits are better than no profits at all.

One last note here - Amazon had Portal 2 for $34.99 even before the sale (If you want to count their $20 credit deal) - the only time the game was actually $54.99 (Amazon had it $5 off from the start), was in the week or two after it was released.

These are reasons I can understand, but if the publishers didn't price the games high from the start, wouldn't that generally mean more sell-through that extends for a longer period of time? Retailers could afford to buy more as more copies of the game would be selling.

Of course there will always be retailers luring people in with sale prices, but why even set the bar at $59.99 to begin with when places are launching into sales pretty much from the get-go?

I'd wager that $39.99 is a magic price that would see booming sales of games. I mean, look at how those Amazon sales go.

As far as shelf life goes, I feel that's just BS made up by retailers. They're the ones responsible for basically saying that once a game is released, then it's time to move onto something else. I would have had no idea that Brink is coming out soon if it wasn't for the humongous signs at Gamestop that went up within a week of Mortal Kombat. If a game is good, it will have legs of its own that will keep it popular. Look at CoD.

[drmay]

but more and more people are waiting for sales, especially with the prices of gas and other commodities on the rise.

Actually the problem is more and more people are not waiting for sales. Even with the decline in the economy games sales actually went up from the numbers I saw. That's why they have been calling video games a recession proof industry. Especially in bad times people want escapist entertainment. Nothing is more escapist than video games.
But remember game prices have been pretty stable for about 20 years. I remember Streets of Rage 2 was brand new for $65 dollars.

[maxlords]

I get more games than I ever used to new at release. However, I also make more money than I used to....and I massively take advantage of the trade in deals that stores like EB offer. I'd be willing to bet there's a LOT of people that grab games when they come out through trade credit and trade deals, and the companies' numbers don't really reflect that...they ONLY show how many copies go out. That doesn't mean people actually paid full price....

[heybtbm]

If you're game isn't Call of Duty, Gears of War, Battlefield, or Halo...you better buy it on release date if you want to play online. It seems like no other franchises can support multiplayer communities longer than 3-4 weeks these days.

[The 1 2 P]

If you're game isn't Call of Duty, Gears of War, Battlefield, or Halo...you better buy it on release date if you want to play online. It seems like no other franchises can support multiplayer communities longer than 3-4 weeks these days.

This actually relates to the point I wanted to make. For the last few years I keep reading articles saying that from now on only AAA games(such as Halo, COD, Gears of War, Assassins Creed, etc) will be able to get away with pricing their games at $59.99 while the majority of other games would need to price their's at $49.99 or lower to be able to compete. And yet this doesn't ever happen but it should.

I've played quite a few games this gen(Wanted, Ninja Blade, Star Wars: The Clone Wars: Republic Heroes, Blur, Conan, etc) that should have never been priced at $59.99, although I didn't pay that amount for any of them. Some games are way too short, uninspired, boring or just really bad to justify the $59.99 price point. I think the problem is that none of the publishers want to admit that their games aren't AAA material and thus deserves a lower price point. And so they all keep that $59.99 price point despite only 2 out of every 10 games actually deserving it.

So unfortunately I see no end in sight to the $59.99 MSRP unless people just stop buying all of the garbage games when they first come out. But stuff like Halo and Call of Duty will always get early adopters and they should because they are real AAA titles that deserve that price, although it would be nice if they were lowered as well.

[soloman]

These are reasons I can understand, but if the publishers didn't price the games high from the start, wouldn't that generally mean more sell-through that extends for a longer period of time? Retailers could afford to buy more as more copies of the game would be selling.

Not at all. The average customer has already made up their mind about a particular product regardless of price long before it comes out. The rest of the customers come into a store to impulse buy or see what's "new." They don't care about sales until someone actually informs them a sale is going on.

Of course there will always be retailers luring people in with sale prices, but why even set the bar at $59.99 to begin with when places are launching into sales pretty much from the get-go?

Because millions of people buy a game at $60. That's all it boils down to.

I'd wager that $39.99 is a magic price that would see booming sales of games. I mean, look at how those Amazon sales go.

If 4 million people buy Game X within the first week at $60 then the magic price is $60.

As far as shelf life goes, I feel that's just BS made up by retailers. They're the ones responsible for basically saying that once a game is released, then it's time to move onto something else. I would have had no idea that Brink is coming out soon if it wasn't for the humongous signs at Gamestop that went up within a week of Mortal Kombat. If a game is good, it will have legs of its own that will keep it popular. Look at CoD.

Call of Duty is one-in-a-million and shouldn't be used when talking about the average product. The console market moves so fast that it's physically impossible for all but the largest stores to keep a title at the top of the shelf for any period of time. It's especially worse in the spring and fall when you're seeing dozens of titles released per month. Call of Duty and Mario will always have top shelf privileges but any game that's not a million seller is usually tossed into a bin to make room for next month's releases.

The way the console market is moving now, approximately 60% of a game's units will be moved in the first two months. After that, sales practically grind to a halt which is why you never see new prints of titles that aren't already million sellers. Only a scant few companies like Activision and EA have demand enough to make new print runs. I've never seen Atlus or Koei reprint a game after its initial run because there's zero demand for it.

[WCP]

The major game publishers don't make their money when you buy a game - they make it when the place you bought it from buys the game - so when you see a sale like that, it's not affecting the money the game's publisher made off the game in the least - it's that the retailer has a ton of inventory and needs to move it.

Actually, for the biggest retailers, this isn't exactly true if your not named Call of Duty, Halo or God of War, etc, etc. When Wal-Mart and Target and Best Buy place an order on a game like Portal 2, they have a contingency plan built into the deal where they have an "out" so to speak, if the game doesn't sell well.

Basically, it works something like this:

The Wal-Mart buyer will tell Electronic Arts (I'm assuming they published Portal 2, but not sure) that they're willing to purchase say 1 million copies of Portal 2, with a stipulation, that if the game isn't moving off their shelves according to schedule, that they can get a discount proportionate to the discount they are now having to give to get the units to move at a pace they are willing to deal with. This discount, would then equate to credit that the buyer could use on future purchases of EA published games. It's a bit more complicated than that, but that's kindof a basic breakdown of it.

Having said all of that, a small retailer might not get those same kind of terms, and might really be taking full risk if a game doesn't move off shelves. The bigger the retailer, the better the terms. The less hype on a game, the better the terms. The smaller the retailer, the worse the terms, the more hype on a game, the less the terms, etc, etc.

[Graham Mitchell]

Actually, for the biggest retailers, this isn't exactly true if your not named Call of Duty, Halo or God of War, etc, etc. When Wal-Mart and Target and Best Buy place an order on a game like Portal 2, they have a contingency plan built into the deal where they have an "out" so to speak, if the game doesn't sell well.

Basically, it works something like this:

The Wal-Mart buyer will tell Electronic Arts (I'm assuming they published Portal 2, but not sure) that they're willing to purchase say 1 million copies of Portal 2, with a stipulation, that if the game isn't moving off their shelves according to schedule, that they can get a discount proportionate to the discount they are now having to give to get the units to move at a pace they are willing to deal with. This discount, would then equate to credit that the buyer could use on future purchases of EA published games. It's a bit more complicated than that, but that's kindof a basic breakdown of it.

Having said all of that, a small retailer might not get those same kind of terms, and might really be taking full risk if a game doesn't move off shelves. The bigger the retailer, the better the terms. The less hype on a game, the better the terms. The smaller the retailer, the worse the terms, the more hype on a game, the less the terms, etc, etc.

This is similar to how record manufacturers killed lps to make way for the compact disc. Traditionally the publisher would offer a"buy-back"program. Basically if the record didn't sell, the publisher would purchase them back from the retailer.

When cds came out, record companies wanted to force consumers to upgrade. As such, they continued the buy back program with cds, but refused to buy back unsold lps any longer. In order to avoid being saddled with piles of unsellable records, retailers just stopped ordering them. This in effect made lps essentially unavailable to consumers, and forced them to upgrade.

I wouldn't be surprised if video game publishers did something similar when they want consumers to buy a new console.

[WCP]

Part of the thing is the cost of printing a CD and the case, manual etc... It's so cheap, that publishers can afford to print a ton of them, and if they don't sell, then just take them back and have them destroyed for tax purposes. In the cartridge days, nobody could afford to do that. Some companies got killed on unsold N64 cartridges.

[Kid Ice]

Because people will pay that much.

Seriously.