The Value of a GAME


Yesterday, the Game Group - owner of GAME and Gamestation stores - filed for administration. For those of you outside the UK/Europe, GAME and Gamestation are our equivalent of Gamestop and if they disappear entirely, then the UK will be left without a nationwide, video game retailer. The chain has been made redundant by the competition, hampered by a business model that stresses second hand sales and had duplicate stores on the same street. They failed to adapt in an ever evolving industry and uncompetitive pricing made it surplus to requirements for most gamers.

GAME is notorious for sticking to its high prices, with new games sometimes twice as expensive as the competition (Binary Domain was £39.99 in GAME last week, but around £23 at a number of online retailers). When I went to my (three!) local stores two weeks back to check their clear-out sales I found very little that I couldn't get cheaper elsewhere. The first game I spotted in-store was Uncharted: Golden Abyss for a ludicrous £44.99 ($71) - even more expensive than the jack-of-all-trades entertainment shop HMV, located just a few doors down.

Price is a big issue with video games. Console titles are often cited as being too expensive, but at the same time few other entertainment products are discounted as drastically or as quickly. The suggested retail price for a full, PS3 or 360 title is usually between £39.99 ($63.50) and £49.99 ($79.30), but they are often subjected to a significant price cut even before release. Online retailers and supermarkets, the two biggest outlets for video games in the UK, will give most games a 20% discount right out of the gate, allowing for pre-orders and first week purchases of around £35-40.

The battle was on for the last copy of 50 Cent: Blood on the Sand (£2.99)

While games from a select few high profile franchises will retain their value, such as Call of Duty, most will plummet in price within a month to six weeks of release. Take Final Fantasy XIII-2 for example; a heavily advertised and relatively well received entry in a high profile series that, in the space of only four weeks, saw a wide-spread, online discount of 65%. When Final Fantasy can’t hold its value for even thirty days, then surely it’s time to question a pricing model that appears out of touch with what people are willing to pay, one that encourages consumers to wait only a few weeks for a significant discount and eats into retailer and publisher margins.

The increased popularity of mobile games and the success of the freemium model have cheapened the value of the gaming experience in the eyes of many. Clearly, Uncharted: GA has far higher production values than Angry Birds, for example, but I'm not sure that a casual gamer would make such distinctions, seeing instead two portable time wasters, one forty times the price of the other. Companies that are charging console prices for re-packaged iOS games, such as Ubisoft with Dungeon Alliance, are making things even worse.

I am not a typical consumer of video games, though I don't feel I’m unique among core gamers. I own every major console and handheld of the last ten years and tend to buy on average 2-3 games per month, usually one relatively new title and the rest slightly older and more heavily discounted. I do not trade-in games nor do I buy used; I'll always choose physical over digital and I do all my gaming on game dedicated devices. I buy everything online and am always careful to take advantage of the discounts that I know are coming. With this in mind, I will only pre-order a couple of games a year, preferring to wait the three or four weeks for the inevitable reduction in price. I love games and I like to think that I'm part of the core that keeps the industry ticking, but even still I do not think that a game is worth £40 and will not spend that much on one - Skyrim has been the only exception in the last two years and it was reduced by almost 50% less than a week after my full-price purchase, which was nice. It would seem that most consumers agree, if retailer’s swift reductions and constant sales are anything to go by.

What are your thoughts on video game pricing and retailers?

Comments

  1. I think the industry is finally losing its grip on the ridiculous 500%+ profit they've made standard since the first CD game systems arrived. Outside of restaurants in airports, no one maintains those kinds of margins. It's insane. They'd probably make less money if they just printed money. And it's always worked, because video games have always existed in such an isolated little bubble. Whatever they said a game cost, we agreed to, and paid. The group selling them to us was a relatively small, unified, contingent. Keeping us locked into their math was easy. Hell, every time they've ever made video games cheaper to produce, they've raised our prices. They just did it to us again with the Vita. Forgo instruction manuals altogether. Raise prices $10.

    But now we've got all these factors turning the market on itself - publishers vs retail and their used games, cell phones and tablets vs dedicated platforms, digital vs retail, piracy vs payment, etc, so that bubble has begun collapsing. There is no lie agreed upon during a civil war, and we're in the midst of several. So now, finally, video game prices are subject to consumer gravity, just like everything else on the planet.

    That thing with two stores on the same block is a perfect example of the unreality bubble. Gamestop does that constantly too. It's from when they take over a competitor, and leave the second (or third, or fourth, in some places) location open to discourage anyone else from opening another shop. Who the fuck does that? That is the move of an organization that is past financial concerns and into the empire consolidation phase. Now everyone on the wrong side of the used game war is being pushed out of the bubble, and, boom, half of all the Gamestop-alikes on the planet will be gone in five years. I wouldn't be surprised if half the industry as we know it followed them, either into the abyss or into the land of phone games. There are so many people playing out of their depth, now that depth exists again.

    ReplyDelete
    Replies
    1. There is a divide between the "haves" and "have nots" of the industry. A Call of Duty can succeed at the old, high price points, whereas a lesser series will not. But that doesn't stop publishers/retailers setting the same price for both types of game, at least here in the UK. This lack of fleixibility, even as everything else is changing, speaks to the mess we are in. I can't help but laugh when i see a relatively new game selling for £9.99, still displaying its original RRP of £49.99 as a badge of shame. It's all rather ridiculous.

      The industry as a whole is certainly changing, and the old system of having three GAMEs on one street is over. Not sure what its like over there, but I don't think we are far from having Supermarkets as the only major highstreet video game retailer in the UK. That will be bad for the industry and the consumer.

      Cheers

      Delete
  2. I think GAME was bound to go eventually -its been on a steady slope downwards for a good while now. The problem is that by focusing on the 2nd hand games the shop must have lost so much money on actual retail releases - which are/were always pushed against a wall or hidden at foot level. So you can't blame the big publishers cancelling their contracts with the shop, seeing as they were hardly even selling their products.

    In terms of game price its the old problem of games increasingly costing loads of money to make - downloadable games help to keep costs down, but i love having physical copies. Personally though i rarely buy a game at full retail value (im not morally opposed to paying £40 for a game, but often i can wait and if it saves me £20 ill do it) and even sometimes get tempted by 2nd hand games every so often (especially, that is, with PS2 and DS games which generally only exist in independent 2nd hand shops now). I tend to stay away from the exchange shop CEX because I dislike how they base their entire business on shifting new 2nd hand games for prices only slightly under the retail value of full releases.

    ReplyDelete
    Replies
    1. There was just no good reason for me to go into a GAME store. Only time I'd only ever go in there was if I was burning time. Their website is marginally better though & will have the odd, decent deal. I can understand why publishers were not that fond of GAME, but at the same time its definitely in their interest for it to survive, or some version of it.

      I too avoid CEX. I'm surprised that there's a market for used, recent games for just a couple of quid cheaper than a new copy. Hard times.
      Cheers

      Delete
  3. Daydream Drooler24 March 2012 at 04:46

    I know people complain in the US but when you break it down games today are cheaper than what they once were. however it sounds quite the opposite over in the UK. honestly if I was you I would gather as many as I can and fight it. that's some BS they charge you that much for Uncharted GA, that's a whole $30 on our end and only $10 than a full console game which is BS.

    ReplyDelete
    Replies
    1. They are definitely cheaper here than they used to be, as long as you are prepared to wait a month. The initial price is as high, if not higher than in the past, but the quick discounts mean your money can go a lot further than it used to. Cheers

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