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
Because they can, and it’s good business sense to do so. The monetary value of anything is what people are prepared to pay you for it – not what it costs you provide it.
People often have the naïve idea that companies are in business to serve their customers. They’re not; they’re in business to do what’s best for their shareholders. The two sets of interest may coincide – but often they don’t.
Basically – if a significant proportion of your customers will pay a premium for an immediate download, you likely charge one. If it’s cheaper to do that as well, that’s even better; more profit to cover your costs, reinvest or pass on as dividends. What you’re not in business to do is to pass that saving on to your customers, unless it’s as a consequence of some hard-nosed business decision that it will likely bring a return. OK, so some people won’t like it, and will walk away. Others will be prepared to wait and buy the physical media. You factor all of that into your calculations and relative pricing.
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