Latest Ubisoft DRM measure - all SP saves stored on a cloud server - by EvaUnit02
SubJeff on 26/2/2010 at 01:30
I totally understand the frustration at no getting a cut of second hand sales but this cloud save crap is a nonsense of oh shi I just became a pirate because I can't stand this bs proportions.
Fafhrd on 26/2/2010 at 03:53
Quote Posted by Phatose
If for example, you price a game at $60, sell 100k copies, drop it to $20 for a sale and sell a million, you've made more money then if you sold all 1.1million at $20
The increase percentages are in gross income, not unit sales, though. The numbers for 75% off show nearly fifteen times as much money coming in. Why? Because that drops it to impulse buy range.
Look at DVD sales. Movies cost hundreds of millions of dollars to produce, and DVDs sell for around $20. But the vast majority of the money that a movie makes is in DVD sales. Movies that were considered box office failures have gotten sequels based on their DVD sales. And the reason so much money comes in from DVDs is because they're price is in an impulse buy range. And the advent of DVD kind of did kill a huge chunk of the rental sector, because people mostly rented VHS movies.
As for why the video game industry hasn't taken this approach? There have been accusations of price fixing in the past ((
http://www.gamespot.com/news/6191312.html) Nintendo actually got hit with a big fine for this a couple of years ago). And it would either have to happen all at once across the industry, or a major publisher like Activision or EA would have to do it, and until they decide that their current pricing model isn't working, they won't.
Chade on 26/2/2010 at 04:16
Quote Posted by Fafhrd
The increase percentages are in gross income, not unit sales, though.
That's not what he's arguing. The increase percentages are gross income over the duration of the sale. It's quite possible that the increase in income would not be sustained if those prices were standard.
Many people like sales. This doesn't prove there would be drastically improved demand for games if prices were lower. The extra income could occur due to demand shifting from normal prices to bargain prices, extra demand generated by
relatively low prices, or marketing/word-of-mouth.
I do agree that a prisoners dilemma style mechanic might be at work here, and a price reduction might result in increased income if everyone lowered at once (and then had the discipline to keep prices low). That is the essence of my third suggestion above. But I don't think it's as likely as the bargain hunter explanations.
EDIT: Also, DVD's are more expensive then box-office tickets, so I don't think your analogy holds.
Phatose on 26/2/2010 at 04:39
Quote Posted by Fafhrd
The increase percentages are in gross income, not unit sales, though. The numbers for 75% off show nearly fifteen times as much money coming in. Why? Because that drops it to impulse buy range.
Look at DVD sales. Movies cost hundreds of millions of dollars to produce, and DVDs sell for around $20. But the vast majority of the money that a movie makes is in DVD sales. Movies that were considered box office failures have gotten sequels based on their DVD sales. And the reason so much money comes in from DVDs is because they're price is in an impulse buy range. And the advent of DVD kind of did kill a huge chunk of the rental sector, because people mostly rented VHS movies.
As for why the video game industry hasn't taken this approach? There have been accusations of price fixing in the past ((
http://www.gamespot.com/news/6191312.html) Nintendo actually got hit with a big fine for this a couple of years ago). And it would either have to happen all at once across the industry, or a major publisher like Activision or EA would have to do it, and until they decide that their current pricing model isn't working, they won't.
I'm fairly certain you're not understanding what I'm arguing.
Lower prices should create larger demand. I'll even go as far as saying it increases actual net profits to offer games at a lower price.
However, that price created demand spike does not have to be immediately upon release. The steam sales actually demonstrate this quite clearly - demand reacts to pricing whether it's early or later on.
Thus, a wise business will start high, then steadily lower til the point net profits are zero.
That way, you'll sell to the group of people willing to pay $60 for $60, the larger group of people willing to pay $40 will pay $40, $20, and so on.
A traditional pricing with reductions over time maximizes your profit. Those people who won't pay more then $20 will eventually buy it at $20, but the people willing to pay $60 will pay $60 instead.
Both pricing methods eventually get the larger group of people who'll pay $20. The traditional system, however, makes $60 off people willing to pay more for it immediate, while your system only makes $20 off them.
Bakerman on 26/2/2010 at 06:33
Quote Posted by Phatose
That way, you'll sell to the group of people willing to pay $60 for $60, the larger group of people willing to pay $40 will pay $40, $20, and so on.
Glad someone thought of this - basic economics, you just follow the demand curve down. It begs the argument - why aren't games
more expensive? :P I'm sure there are people out there willing to pay $100 for their favourite new release on day one.
lost_soul on 26/2/2010 at 07:26
Quote Posted by Phatose
I'm fairly certain you're not understanding what I'm arguing.
Thus, a wise business will start high, then steadily lower til the point net profits are zero.
That way, you'll sell to the group of people willing to pay $60 for $60, the larger group of people willing to pay $40 will pay $40, $20, and so on.
This is a pretty good plan. Unfortunately it rarely comes to this though. The game will go from $49.99 to ($29.99 or $19.99), and then simply disappear from the market. The exception to this is the occasional deal you can find at a place like Best Buy. Sometimes they will sell games for $9.99, which is an impulse buy for me. Why would I waste my time researching for a cheaper price online? Why would I wait for the game to be delivered? It is $9.99, and it is a sale.
Fafhrd on 26/2/2010 at 07:49
Yeah, the problem becomes titles that most people are willing to pay the $20 price point for, but only a very small percentage are willing to pay $50 or $60. Then it's the retailer that marks it down to clear out their stock, but they don't re-order (since they just took a loss on it), and then nobody can get it. This is less a problem for digital distribution like Steam, but then there's also less impetus for regular, gradual, markdowns (which is why the Weekend Sales are such a big deal).
Following the demand curve obviously works and is sustainable, but it's not necessarily the best thing for the industry, because it favours front loaded sales and 'blockbuster' titles.
And I think we're actually going to start seeing a shift to lower pricing for retail titles with a much larger reliance on DLC over the next couple of years.
Harvester on 26/2/2010 at 15:53
Quote Posted by Fafhrd
No it's not. A Certified used car benefits the manufacturer, a used car sold from a licensed dealership benefits the manufacturer, and used cars that are bought directly from the owner or from an independent dealer still require maintenance, in which case you're buying parts from the manufacturer, or from manufacturers licensed by the original manufacturer to make parts for their cars.
Alright, I'll give you that, cars might be a bad example. So let's take something else, like a piece of furniture, a second-hand wooden dining table for example. My point is that no one is saying that you should only buy new dining tables to support the table manufacturers, and that buying a second-hand table is no better than stealing a table, like Nameless Voice said about games.
Now I believe in supporting companies that make games so I'll buy games new if they're available (and if I can't afford a brand new game at full price I'll buy an older game at a lower price), but I don't think buying second-hand games is any more morally wrong than buying a second-hand dining table or any other second-hand product is.
Nameless Voice on 26/2/2010 at 16:59
Software is... different, though.
If you steal a table, someone no longer has that table. If you steal a piece of software, no direct harm or loss comes to the owner of that software.
The only reason stealing software is considered immoral is because the developers are not paid for their work, as they would be if you bought the software from them. The same is true for buying the game second-hand.
Jason Moyer on 26/2/2010 at 17:06
Comparing something whose value is derived from its physical existence to the value of intellectual property is one of my favorite things ever. Please continue.
