Why do games cost more to direct download on a console than to buy a disc? Surely direct download saves the manufacturer costs on transport, shipping, actual materials for disks and packaging, setting up deals with retailers etc…
In: Technology
20 year game industry vet here. It’s mostly because publishers and retail stores have mutual agreements with each other not to undercut.
Publishers need retail stores to sell their product. Retail stores need publishers to give them product to sell. Both of them share a cut of the profits, but both can’t afford to piss the other one off, or screw each other out of their profit per unit in pursuit of more customers.
So publishers agree not to undercut retail stores on their digital price. In exchange, retail stores agree not to undercut retail prices below a certain level. And this arrangement is why AAA game prices have stayed static at $50-70 for 30+ years even after inflation.
This is actually a huge problem for the industry. For comparison, in today’s money, Super Mario Bros would cost $153 retail. The post-inflation sale price of games has decreased by 60-70% at the same time the cost of making them has increased 100x.
Latest Answers