Digital Distress

September 4, 2017

Not a Humble Bundle of Joy

                                                  

At time of writing, FIFA 16 is available for £29.99 for digital download on the PlayStation Store. I’ll point out that FIFA 17 has been and gone, and FIFA 18 is due to drop any time soon. So already this appears to be overpriced for an annualised sports game which now has out of date rosters. But the real shock comes when you compare this to the fact that the game is available in CEX as a physical copy for £3.50!

 

Putting aside the moral argument that purchasing pre-owned games provides no money to the gaming industry, we have to be realistic that in the days of people tightening their belts financially, it is hard to justify this gap between pre-owned physical sales and their online partners.

 

Whilst I understand there will be overheads for digital sales such as servers, bandwidth, site maintenance etc I find it hard to believe that these costs are higher than running a store’s rent, staff wages, warehousing, logistics, delivery and, if we are talking about buying games new from retailers, then the actual production costs of the disc (materials, printing, etc).

 

This does not only affect games that have been out some time or just annualised sports games (which have a much faster and significant drop-off in pre-owned price due to becoming obsolete faster). Shadow of War, due to be released 10th Oct 17 is currently available for pre-order on the PS Store for £54.99 and Amazon for the much cheaper price of £44.

 

By this logic either Amazon lose £10 on every sale of this game if they have decided to discount in order to bring in other purchases. Or more realistically this is a price which allows the dev, the publisher and the retailer profit and PS are just looking for a £10 “fee” on top. It’s hard to argue this is not just greed.

 

Personally I find owning a physical copy of a game much easier. I have pretty decent fibre optic broadband and yet I shy away from digitally purchasing games due to the time it takes to download a full length game, the space it takes up on the PS hard drive, the inability to resell and quite frankly just because I like a library of games on my shelf.  

 

Fergal Gara (Head of PSUK till 2015) interviewed by EuroGamer in 2013 said:-

 

“We want to support a healthy retail channel, so it's not in our interest to go and seriously undermine retail. Let's not forget the UK is probably the most competitive retail space there is in the world. So when it comes to any recommended retail prices they will frequently choose to price significantly below them…Amazon as an example. Amazon control their own pricing. We don't set the pricing. So if they decide on some crazy low prices they'd like to charge their customers, that doesn't mean it's appropriate for the PlayStation Store to match or follow that price. These are effectively all independent retailers...But I would expect under normal circumstances that digital pricing for first-party titles will be in and around the street price you would expect to pay for the disc.”

 

(It’s interesting to note that after this he left PS in 2015 to go and work for Amazon!)

 

What can be taken from the above statement is that Sony are happy to push any blame for the price difference onto the retailers undercutting prices. It can also be argued that Amazon work in a unique way in the market in that they can afford to not make profits on certain sales because of the revenue through prime subscriptions, through charging people to sell through it’s service and advertising etc. So let’s leave amazon for a while.

 

Back to Shadow of War. PS Store £54.99, Amazon £44, surely GAME, one of the UKs best recognised high street brick and mortar gaming retailers can’t compete with Amazon’s online model? You’re right it can’t. Shadow of War is a whopping…. £44.99. Still £10 cheaper than the PS store. In fact most titles appear to be the same. Five randomly picked modern games as per below.

 

Whilst I can believe Sony’s view that amazon are in a position to cut costs dramatically I would argue that GAME (especially given their previous financial woes) would not be able to so regularly retail games at a loss and still stay in business.

 

DaveDogg2k5 on reddit gives another popular theory

 

“Digital sales on console are always at RRP recommended retail price. the publishers at this point sell far more copies through retail than digital and if started selling copies digitally cheaper than retail then that causes problems with getting copies into retailers. they can't ignore retailers and just go digital either because console manufactures need retailers to sell boxes so bottom line while there are retailers digital copies will always be dearer”

I can understand why developers would want to keep their retailers sweet considering this is still, for the moment, the method of choice for most gamers and I believe will continue to be until download speeds are universally much faster and reliable, but, given the obvious benefits for the publishers themselves it seems crazy that games are not released at least on an even keel.

 

If the industry wants us to give up our physical copies and fight the preowned market (of which the industry gets no profit from the sales of) then they have to make the offering more attractive financially.

 

Speaking of the pre-owned market the rate in which games drop their cost must be much faster in order to convince people not to walk into retailers such as CEX to purchase games. After all once the initial surge of sales is completed (other than stand out games such as GTAV which continues to sell well years on) then how many people will continue to pay nearly new prices for outdated games? In terms of percentages the disparity between digital downloads and the preowned market is much more significant than the above for new games.

 

I am all for supporting developers and publishers alike by paying for these games as downloads from the source, but the reality is that I will never pay four times the amount for The Division considering I then have to go through the rigmarole of downloading the entire game and I don’t get a shiny blue box for my shelf. The only game which has retained any value at CEX appears to be Overwatch and this will be down to the fact it’s still a popular online play franchise (Sorry overwatch, I love you, but your figures aren’t comparable).

 

In conclusion, I’m sure there is a lot of business sense behind the premiums being charged for these aged games but unfortunately I can’t see past the common sense that surely shifting 10 copies of a game at people willing to give a game a go for £10 would be better than selling one at a full price £40. Like many of my friends I would prefer to pay my monies to the people who made or at least published the games but I do not see how that is an attractive offer for the consumer currently and so until this is addressed the profits from my purchases will be going to CEX and Amazon.

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