Sony cuts PS2 game prices to $39.99, others follow...

[unit003]

I kinda figured this would happen just to edge out nintendo and M$. In fact, I'm kinda wondering how nintendo is feeling now that they may -have- to sell their games at a "competetive level"?

I wouldn't worry about the development costs, they will sell more games because of this to make up for losses rather then taking up shelf space, not to mention, the $50 tag that was on would still settle for helping to build back profits ahead of time on the system sales.

[JefmcC]

Great news for gamers. I don't think this is going to hurt developers one bit. There is such a HUGH markup on software it's not even funny.

I would imagine retailers making a slightly smaller profit. But that will be made up for in volume. I would also imagine used games costing less now.

[TobalRox]

I remember when Sega lowered their prices for Saturn games from $59.99 to $49.99, so I used to pay a LOT more for games than I do now, so I had no complaints, but I won't complain for cheaper games either

[Prince Planet]

Originally posted by JefmcC
Great news for gamers. I don't think this is going to hurt developers one bit. There is such a HUGH markup on software it's not even funny.

I would imagine retailers making a slightly smaller profit. But that will be made up for in volume. I would also imagine used games costing less now.

How big a markup do you think retailers have? Presently in the U.S., your average A title that is retailing new for $50 costs the retailer about $40 at wholesale. That's a 20% profit for the retailer.

Cutting the retail price to $40 can't make retailers happy since they are losing their margin. Even accounting for some subsequent changes in the pricing structure from distributors to retailers, I would expect retailers to take it in the shorts (and I'm sure they see it that way).

Make it up on volume? I doubt that a price drop in software would result in retailers miraculously selling about 10x their present volume.

Bottom line: I'm not complaining about cheaper software since I'm a consumer, but retailers must be going into collective fits of apoplexy right about now.

[JefmcC]

Originally posted by Prince Planet


How big a markup do you think retailers have? Presently in the U.S., your average A title that is retailing new for $50 costs the retailer about $40 at wholesale. That's a 20% profit for the retailer.

My mistake. I meant to say that I think the game companies jack up the price, and not retailers. I think retailers will still make about 20% on each game sold. They will just sell more of them. So even though they will net less money, the profit margin is still the same. 20%. Again, just what I think.

It's funny how across the video game industry, prices have remained the same for so long. Sure there was a small spike towards the end of 16 bit, but by and large, video games have always cost about $50 a piece.

Cutting the retail price to $40 can't make retailers happy since they are losing their margin. Even accounting for some subsequent changes in the pricing structure from distributors to retailers, I would expect retailers to take it in the shorts (and I'm sure they see it that way).

Make it up on volume? I doubt that a price drop in software would result in retailers miraculously selling about 10x their present volume.

Bottom line: I'm not complaining about cheaper software since I'm a consumer, but retailers must be going into collective fits of apoplexy right about now.

Maybe they are going into fits. But like you said, it's us consumers that are going to win here.

[Mr_B]

Yeah but that can completely change my buying habits.

Now instead of being able to afford only 1.5 game every 2 weeks I will now have money for 4 games a month.

So in large, retailers are not going to be hurt at all.

You get a 15% cut of $160
OR
You get a 20% cut of $100

[wEEman33]

I was used to paying $59.99 for N64 games for along time during its era so $49.99 for this generation's games wasn't any big deal to me. Plus most games can be had for cheaper due to all the sales that go on these days. Cheaper games means more games I can buy so Im all for it.