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?