Why are Video Game Prices stuck at $ 60 for the average gamer? Many publishers set the price at such a low price because it assures them a big cut is going to be big enough to cover them for any additional profits, with more being created from special collector’s editions, downloadable content, and microtransactions. While the profits are low, the prices aren’t.
What Has Led To Price Increases?
Video Game Prices has spiralled out of control because the costs have increased so much, especially for new releases. New video games, as you probably know are not cheap. New consoles need to be launched with significant costs behind them. Publishers need to make a profit somehow, and if they cannot do that on the back of expensive video games, then they lose their financial stability. The costs are so great that some publishers are closing up shop.
With new games costing tens of thousands of dollars, why is the Video Game Prices so high? Developers want a huge audience for their title, but because the audience is not large enough, they cannot charge that kind of money. Video game companies need a price point but cannot give it to their audience because the audience is simply too large. They end up making deals with retailers that offer package deals so everyone buys a certain amount of video games. Retailers like these because they get all the profits, even though the companies paying them cannot do so much for themselves in the way of new games and accessories.
One way for video game prices to decrease is to offer deals only to retailers who buy in bulk. Buy in bulk means buying a large quantity of a game. The cost per unit goes down, the profit increases, and retailers can pass on the savings to customers. This type of arrangement can only be made with large online retailers, but it is possible that smaller shops could try this strategy to improve their bottom line.
The other way new titles are priced is based on demand. As more people buy a title, its sales increase. The supply does not catch up, so the price per unit goes down. The supply/demand principle is at work in offline stores, where sales are slow and customers have little choice. Online games can have sales twice a day, daily, or even multiple times during the day, so there are many opportunities for deals to be found. New titles coming out often cause spikes in sales as gamers search for deals and beat the crowd to the best video game deals.
Last Point To Note
The final way video game prices are determined is by competition between publishers. Video game companies are competing with one another for sales. They offer discounts to retailers for bringing in a crowd, and they give discounts to individual titles for the most sales. There are benefits to retailers for working with these companies because the competition can be fierce and the benefits can make the profits worthwhile. The indie games crowd is hungry for a deal on any given title, so publishers are often willing to meet these needs and give a gamer great deals on the games they want.
