48 Replies. 3 pages. Viewing page 1.
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| 48. |
Re: No subject |
Oct 11, 2006, 10:49 |
Riley Pizt |
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The burden of proof is upon you, bitch. LOL! Yes, and you continue to prove me correct about you with each word you write.
What value do retailers provide that online portals do not? Besides public restrooms... The enormous value retailers provide is that for a number of reasons they sell more games to more consumers by a wide margin than digital distributors. And, even if one day in the distant future, digital distributors became the predominant way that consumers purchased video games, retailers would still have value because they can service those customers who for any number of reasons will not purchase games through digital distributors.
This comment was edited on Oct 11, 10:54. |
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| 47. |
Re: No subject |
Oct 11, 2006, 10:17 |
Riley Pizt |
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No, in fact they are selling using a publisher to sell through both Steam and through retail. And the publisher (and therefore the developer) are receiving more of the gross $$ per unit sale through Steam, end of story. No, it's not the end of the story because not only have you not disclosed the who and how much, you are clearly speculating that the developer is receiving more revenue per sale just because the publisher supposedly is when that may not be the case.
Prices for games are not any higher today than they were 10 years ago. That is a moot point. They are still high in many consumers' eyes which is why so many games fail to sell at $50. And, getting rid of the less expensive alternatives like the used and rental markets is not going to force consumers to pay $50 for these games. They'll just go unsold.
We've been squeezing $50 pints of blood from turnips for years now Oh yes they've been trying, and that is precisely why so many game developers and publishers have gone out of business. The movie industry tried that price point too until it realized that it could make a lot more money selling movies for $20 and less.
Customers are receiving a hell of a lot more value from a $50 videogame investment than a $20 DVD investment First scores of DVD's are available at many price points not just $20. That is one thing which the movie industry does right. They have plenty of product at every impulse buy price point including the $5 and $10 segments. Second, some calculated value of an entertainment product is irrelevant for many if not most consumers. It's the actual purchase price that matters. A video game priced at $100 which is three times the length of the average game may be a good value with regards to price per hour, but most consumers aren't willing to pay that much for a single game. History has shown that even $50 is too much for most games in the eyes of consumers, and that is why relatively so few sell well at that price point, and it is exactly why the rental and used markets exist. Developers can't force consumers to pay more for an entertainment product than they are willing to pay just because developers have an inflated opinion of the value of their work.
That is a completely absurd position. No, it is reality and exactly why the resale market exists. If all consumers were willing and able to pay full price for all games, the resale and rental markets would not exist.
And if it does, fuck 'em, those aren't customers I want anyway. That myopic and ignorant view of business is exactly why so many game developers go out of business.
This comment was edited on Oct 11, 11:01. |
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| 46. |
Re: No subject |
Oct 10, 2006, 22:14 |
Fartacus |
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Well then you should display it on these forums because with your idiotic statements like "retailers provide no value except for shelf space," you show your ignorance.
The burden of proof is upon you, bitch. What value do retailers provide that online portals do not? Besides public restrooms...
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| 45. |
Re: No subject |
Oct 10, 2006, 22:08 |
Fartacus |
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You are no doubt comparing apples to oranges if the developer is selling directly to the customer through Steam and using a publisher to sell through retail.
No, in fact they are selling using a publisher to sell through both Steam and through retail. And the publisher (and therefore the developer) are receiving more of the gross $$ per unit sale through Steam, end of story.
I am not arguing that the production and distribution costs of digital distribution are not lower. The problem is that such cost savings are not passed onto the consumer, and that coupled with the lack of inventory pressures on digital distributors means that the consumer has been and will continue to pay more to purchase games through them than from a physical goods retailer. That is not good for the consumer, and it is also ultimately not good for the developers and publishers because higher prices will lead to fewer sales. Entertainment products are not a necessity, and you cannot squeeze blood from a turnip.
Prices for games are not any higher today than they were 10 years ago. We've been squeezing $50 pints of blood from turnips for years now, and will continue to do so. Customers are receiving a hell of a lot more value from a $50 videogame investment than a $20 DVD investment, and developers are struggling to stay in business.
Ah yes the mythical notion that elimination of the resale market will be the path to riches for developers because everyone will have to buy their games from them. The truth is that elimination of the resale market will reduce new sales because consumers can't recoup some of their investment when they are done with a game. So, they will simply buy fewer games or possibly none at all and turn to rentals or even unauthorized copies. If resale is eliminated the demand for unauthorized copies will definitely explode and the number of new games that are released is going to shrink because fewer people will be buying them. If developers eliminate the resale market, they will cut off their noses to spite their faces.
That is a completely absurd position. Eliminating the resale market will not significantly cause customers to buy fewer copies. And if it does, fuck 'em, those aren't customers I want anyway.
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| 44. |
Re: No subject |
Oct 10, 2006, 19:03 |
trashcan |
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I really dont give a shit about who gets the money, I want the best deal for myself and as a customer i'll never get it through crap like steam. I see steam as anti customer.
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| 43. |
Re: No subject |
Oct 10, 2006, 15:15 |
Riley Pizt |
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I know developers distributing their games through both the traditional retail route and through Steam, to be specific, and the publishers and developers see more money for each unit sold. You are no doubt comparing apples to oranges if the developer is selling directly to the customer through Steam and using a publisher to sell through retail.
In addition, the switch to digital distribution shortens the value chain which gets developers closer to the customer It doesn't get most developers closer to consumers because they still must use publishers to finance and market their titles. So developer -> publisher -> retailer versus developer -> publisher -> digital distributor is the same from that standpoint.
COGS is lower because typically there is no need for CDs, boxes, print manuals, etc. I am not arguing that the production and distribution costs of digital distribution are not lower. The problem is that such cost savings are not passed onto the consumer, and that coupled with the lack of inventory pressures on digital distributors means that the consumer has been and will continue to pay more to purchase games through them than from a physical goods retailer. That is not good for the consumer, and it is also ultimately not good for the developers and publishers because higher prices will lead to fewer sales. Entertainment products are not a necessity, and you cannot squeeze blood from a turnip.
And most importantly, resale is eliminated. Ah yes the mythical notion that elimination of the resale market will be the path to riches for developers because everyone will have to buy their games from them. The truth is that elimination of the resale market will reduce new sales because consumers can't recoup some of their investment when they are done with a game. So, they will simply buy fewer games or possibly none at all and turn to rentals or even unauthorized copies. If resale is eliminated the demand for unauthorized copies will definitely explode and the number of new games that are released is going to shrink because fewer people will be buying them. If developers eliminate the resale market, they will cut off their noses to spite their faces.
This comment was edited on Oct 10, 20:43. |
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| 42. |
Re: No subject |
Oct 10, 2006, 14:55 |
Riley Pizt |
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Actually, I'm not. Well then you should display it on these forums because with your idiotic statements like "retailers provide no value except for shelf space," you show your ignorance.
I'm talking about software here, and it's inevitable. It's not a matter of if, but when. So am I, and it won't happen in my lifetime so that is as good as never to me. The myth that it would ranks up there with other false predictions of the past such as computerization would lead to the elimination of paper.
This comment was edited on Oct 10, 15:56. |
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| 41. |
Re: No subject |
Oct 10, 2006, 12:31 |
Fartacus |
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First, that 20% cited is still higher than typical reality in the U.S. The average markup is not $10 on a $50 PC game especially when the game is not actually being sold for the official retail price. Second, digital distribution isn't cutting out the retail layer for most developers. It is simply trading the digital distributor for the retailer, and the digital distributor is getting as much or more than the retailer would especially because it is providing DRM services in addition to processing sales transactions and delivering the product.
I'm not discussing theory here. I know developers distributing their games through both the traditional retail route and through Steam, to be specific, and the publishers and developers see more money for each unit sold.
In addition, the switch to digital distribution shortens the value chain which gets developers closer to the customer, and COGS is lower because typically there is no need for CDs, boxes, print manuals, etc. And most importantly, resale is eliminated.
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| 40. |
Re: No subject |
Oct 10, 2006, 12:22 |
Fartacus |
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You are ignorant of retailing and really economics in general in the extreme.
Actually, I'm not.
You might as well be waiting for godot.
I'm talking about software here, and it's inevitable. It's not a matter of if, but when.
Now get back to work, you have a customer at register 2.
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| 39. |
Re: No subject |
Oct 10, 2006, 12:14 |
Riley Pizt |
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Again, the retail markup is pretty high, especially considering retailers provide no value except for shelf space. You are ignorant of retailing and really economics in general in the extreme.
I can't wait until traditional retailers are all driven out of business by digital distribution. You might as well be waiting for Godot.
This comment was edited on Oct 10, 12:20. |
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| 38. |
Re: No subject |
Oct 10, 2006, 12:09 |
Riley Pizt |
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Like I said, the markup is pretty high. Most developers would kill to see even half of that from the games they've developed. First, that 20% cited is still higher than typical reality in the U.S. The average markup is not $10 on a $50 PC game especially when the game is not actually being sold for the official retail price. Second, digital distribution isn't cutting out the retail layer for most developers. It is simply trading the digital distributor for the retailer, and the digital distributor is getting as much or more than the retailer would especially because it is providing DRM services in addition to processing sales transactions and delivering the product.
This comment was edited on Oct 10, 12:16. |
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| 37. |
Re: No subject |
Oct 10, 2006, 12:01 |
Riley Pizt |
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What makes you think so? I used to work for a game store (OK in Europe but I'd expect it to not be too different to the US) Yes, you are pretty much in the right ballpark for U.S. retailers too although your figures on markup are a little high.
This comment was edited on Oct 10, 12:15. |
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| 36. |
Re: No subject |
Oct 10, 2006, 11:58 |
Riley Pizt |
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FYI, if "the game in question" is still Dark Messiah No, that is not the game.
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| 35. |
Re: No subject |
Oct 10, 2006, 11:28 |
MyRealName |
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We need to get Enahs to modify the War-On bot to spew Assley-isms...
Bah, never a contribution, and instead always just the same personal insults. The whole 'assley' comment is actually pretty pitiful at this point. I mean, it doesn't even flow or rhyme or make sense or... well, anything. Of course, now you can come up with an equally stupid one for me too, and solidify the point. How about MyRealNuisance? Nah, that would almost make sense.
Beyond the insults, the points remain and people are starting to speak out more about it. Steam needs reform. Digital distribution does work. The DRM and control tactics don't. On top of it all, customers are not getting the monetary kickbacks they should be. Instead, they get no hard copy of the software they paid for, no box or manual, and a need to authenticate every time they play. It needs reform.
Edit: added quote.. damn threading
This comment was edited on Oct 10, 11:29. |
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| 34. |
Re: No subject |
Oct 10, 2006, 11:17 |
Fartacus |
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Again, the retail markup is pretty high, especially considering retailers provide no value except for shelf space. I can't wait until traditional retailers are all driven out of business by digital distribution.
You act as if developers don't have expenses. Publishers fund titles, sure, but the don't fund developers. Developers need to profit on a title just to stay in business, unless they lay off most of the team after each title that ships, which is not the way to attract and retain good development talent.
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| 33. |
Re: No subject |
Oct 10, 2006, 09:55 |
CJ_Parker |
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Like I said, the markup is pretty high. Most developers would kill to see even half of that from the games they've developed.
That's why I'm looking forward to the end of brick & mortar game retailers. With digital distribution, developers are one step closer to the customer, game resales can be prevented.
Yeah but the developer basically has zero expenses since the whole development is funded by the publisher. Of course, it depends on the individual contract but even if a developer gets only $5 per copy as you said, well, it's almost PURE profit (before only taxes). That's not too shabby compared to the retailers who -of their $10- get to keep maybe $2 or $3 per copy (if that much) after all the expenses are factored in and then they still need to pay taxes for that low profit.
Additionally, every copy that is returned to the store is a big, fat loss (depending on country, you can't just outright refuse to accept returns).
Again, the retail markup is not "pretty high". Period. Basta  .
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*** Born to troll *** |
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| 32. |
Re: No subject |
Oct 10, 2006, 09:24 |
Fartacus |
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I'd like to know how much you think Valve's markup on Steam is because the markup on PC games even at the huge discount retailers in the U.S. is pretty damn low.
Sorry, can't help you, I'm under NDA.
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| 31. |
Re: No subject |
Oct 10, 2006, 09:23 |
Fartacus |
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That's not a lot. It's a joke. It's $10 for a $50 game. And we're talking gross margin before taxes or any of the expenses you mentioned.
Like I said, the markup is pretty high. Most developers would kill to see even half of that from the games they've developed.
That's why I'm looking forward to the end of brick & mortar game retailers. With digital distribution, developers are one step closer to the customer, game resales can be prevented.
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| 30. |
Re: No subject |
Oct 10, 2006, 09:14 |
nin |
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Okay, Riley, and your point is? Why don't you address my point rather that obfuscate the subject?
Do you honestly think he's going to spew anything more than his regular bullshit?
We need to get Enahs to modify the War-On bot to spew Assley-isms...
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GW: Nilaar Madalla, lvl 20 R/Mo / Tolyl Nor, lvl 20 E/Mo / Xylos Gath, lvl 16 W/Mo
http://www.richardcheese.com/ http://www.myspace.com/richardcheese |
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RollinThundr Apr 17, 2013, 12:25: Eh really tossing stuff like that in there only to get your panties all bunched up. If you really want to call that trolling sure.
Mr. Tact Apr 17, 2013, 12:33: Pretty sure that's the definition of trolling... |
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| 29. |
Re: No subject |
Oct 10, 2006, 09:09 |
CJ_Parker |
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The retail markup on games is pretty damn high, the margins are low because of the costs associated (rent/shelf space, employees, etc.).
What makes you think so? I used to work for a game store (OK in Europe but I'd expect it to not be too different to the US) and the markup was max 25% if we sold a game at the full RRP. That was only the case for very popular AAA titles though where people were happy to find a copy in a store at all. It was rare.
The usual markup was more like 15%-20% and dropping VERY fast from one week to the next if the copies didn't move ASAP. We bought the games from a distributor who made their own 3%-6% per copy BTW. So on average you could say that retail gets about 20%-25% of whatever the sales price is.
That's not a lot. It's a joke. It's $10 for a $50 game. And we're talking gross margin before taxes or any of the expenses you mentioned.
As a games retailer you have to move tons of copies to turn a profit. And guess who gets to deal with disgruntled customers and return policies and all that crap? Right. The retailer.
It's definitely wrong to say that "retail markup on games is pretty damn high". You're right that the profit margins are extremely low though. As I said, I don't think you can make any money from selling games unless you move tons of copies. The only other alternative would be to work solo from home (eBay Shop or something like that) and to have a no return policy. Otherwise you won't be making money in games retail.
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*** Born to troll *** |
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48 Replies. 3 pages. Viewing page 1.
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