What Your $60 Really Buys


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Seven dollars of a $60 video game purchase covers expenses for games never even sold. That's according to a breakdown of retail game cost by an on-demand games service.

OnLive, of Palo Alto, Calif., says that $7 covers, on average, "returns." That's the cost associated with returning unsold inventory - essentially, sales that don't meet expectations. By this analysis it is equivalent to the royalty paid to the platform holder - Nintendo, Microsoft or Sony.

By far the largest portion is to the publisher, nearly half of it. As it should be. But 25 percent of a game's cost is the profit to the seller. That is a very nice margin, and it - plus the fudge factor on the returns, hint at how discounts on some new games can be justified even at release.

Source: http://kotaku.com/54...-60-really-buys

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Am I the only one that finds it a bit disgusting that we're being pre-charged for returns? I haven't sold a game in probably 10 years, so I feel a bit ripped off having to pay that.

I find the cost of games in general disugsting, which is why i am ONLY buying ones that will have alot of replayability and so on...Most titles just arent worth more than 20-30 imo...specially single player games.

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I find the cost of games in general disugsting, which is why i am ONLY buying ones that will have alot of replayability and so on...Most titles just arent worth more than 20-30 imo...specially single player games.

I have no problem spending up to 50 dollars canadian for a game, but all new releases nowadays are 70, which is horrible. I've been very choosy about what I buy as well because of it. It's interesting because surely the publishers are making less money from all the lost sales. I just don't see how the added income per sale justifies the decrease in volume.

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Honestly, I don't mind the price that much for one very simple reason; it keeps you from buying every single release. You enjoy a game SO much more when

you have that one title and you know, in your mind that you paid premium price for it, so you keep pushing through the game to get your "money's worth". I mean, I know when I've got a heap of games 'for free' you tend to dismiss them very quickly and not give them the same chance as you would otherwise.

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Honestly, I don't mind the price that much for one very simple reason; it keeps you from buying every single release. You enjoy a game SO much more when

you have that one title and you know, in your mind that you paid premium price for it, so you keep pushing through the game to get your "money's worth". I mean, I know when I've got a heap of games 'for free' you tend to dismiss them very quickly and not give them the same chance as you would otherwise.

Indeed, i've picked up countless titles for ?5-?10 on budget before, but I barely play them. If I spend ?40+ on a game then I'll be sure to at least spend a couple of days digging into it. The only exception I have is my copy of Operation Flashpoint 2 was a prize, and I played it through because I actually enjoyed the game.

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Am I the only one that finds it a bit disgusting that we're being pre-charged for returns? I haven't sold a game in probably 10 years, so I feel a bit ripped off having to pay that.

Not really. As the article has said the "returns" margin is where they eat into to pass on savings. Only a fool pays RRP :p

If they didn't do that though then yeah I would agree with you.

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I'm not sure I agree with that logic. If I spend very little on a game and don't get enjoyment out of playing it, then there's very little lost. If I spend a lot on a game and don't enjoy playing it, I've lost a lot. I will not go an play through a game I don't like playing simply because I spent money on it, that's stupid. I would rather be able to "shotgun" a selection of games and find ones out of that that I really enjoy. Not only does this mean I buy more games (supporting the publishers) but I EXPERIENCE more games. It doesn't matter if I like it or not, I've at least given it a shot and formed my own opinion.

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The last game I bought at RRP was GTA4. But being members of a tech site's forum, we're going to be a bit better at finding good deals on games and avoiding RRP.

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If you like single player games, which I do then spending Fifty bucks for a game with 20 hours of play value is not a good investment.

For the entertainment industry, that's pretty cheap.

DVD: $15 for about 1.5 - 2 hours of value.

Amusement Park - $50 for about 7 - 8 hours of value.

Hooker - $100 - $500 for about 1 - 2 hours of value.

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Have a look at the prices charged in Australia. Right after doing that. Stop whinging about your prices.

How many game studios are based in Australia? How many game consoles are made by companies based there? I get so tired of hearing complaints about prices on game systems from people in countries (Australia and countries in Europe) that don't actually produce any. You pay more for them because you import ALL of them. How about getting one of your country's companies to enter the market, then maybe you can have lower prices on things like that too.

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Am I the only one that finds it a bit disgusting that we're being pre-charged for returns? I haven't sold a game in probably 10 years, so I feel a bit ripped off having to pay that.

It happens with everything. Think of all the unsold food/wasteage at supermarkets or a normal business who would have to factor in customer returns.

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This is one reason I subscribe to gamefly

The thing is, I have a feeling that when digital distribution becomes the norm, its not going to lower the price of games.

On the other hand, NES games were 49.99 in the 80s. If inflation is added to that, then that's about $100 per NES game. So I guess we should feel lucky?

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How many game studios are based in Australia? How many game consoles are made by companies based there? I get so tired of hearing complaints about prices on game systems from people in countries (Australia and countries in Europe) that don't actually produce any. You pay more for them because you import ALL of them. How about getting one of your country's companies to enter the market, then maybe you can have lower prices on things like that too.

I'm sure most of the game discs are produced locally, or in China. Take Microsoft, they have a plant in Ireland.

Also Rockstar North, the developers behind GTA are British :P

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This is an interesting breakdown, now, are the developer teams paid on % or on a flat rate?

I guess the developers get their pay from the publishers, with a rate they agreed upon, or something alike.

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I'm sure most of the game discs are produced locally, or in China. Take Microsoft, they have a plant in Ireland.

Also Rockstar North, the developers behind GTA are British :p

No, they are Scottish :p Get it right ;)

Same goes for Realtime Worlds (also founded by David Jones)

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Am I the only one that finds it a bit disgusting that we're being pre-charged for returns? I haven't sold a game in probably 10 years, so I feel a bit ripped off having to pay that.

They're not talking about your personal returns. They're talking about returns from retailers to the manufacturers/publishers. Obviously a company is never going to underproduce a title. However much extra they have left over after the game stops selling is going to depend on the particular game's sales and whether they do better or worse than expected and that averages out to $7 per title, apparently. It's a bit understandable given that there really aren't any good indicators of how well a new title will do unless its a sequel to something else. Can't really expect them to eat that cost.

-Spenser

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