New EA games for current generation dropping $10?

[fitbabits]

Just noticed on GameStop that a bunch of pre-release Electronic Arts (EA Games, EA Sports, etc.) games have been reduced in price to the wallet-friendly price of $40. Link here (http://www.gamestop.com/product.asp?product%5Fid=210810) for Burnout Revenge on Xbox as an example.

Could this be the start of a new trend by major publishers - dropping prices of current generation games and making up for the 'loss' by pricing next gen games for Xbox 360, PS3 and Revolution at the $60 mark? If so, where does that leave prices for PC games?

[netcraazzy]

Could this be the start of a new trend by major publishers - dropping prices of current generation games and making up for the 'loss' by pricing next gen games for Xbox 360, PS3 and Revolution at the $60 mark? If so, where does that leave prices for PC games?

Given the option to make the extra $10 now or later, when 360 comes out, I'm pretty sure they would rather make it now. Maybe EA is just trying to drum up some sales during the slow summer months?

[Borys]

If so, where does that leave prices for PC games?

PC gaming is dead, didn't you get the memo?

[fitbabits]

PC gaming is dead, didn't you get the memo?

Damn, must have been gone that day.

[Klade]

Console games keep their value much longer then PC games. Halo 2 is still selling for 50$ while Half-life 2 is selling for 30$

Methinks that EA is just applying the formula. When game sales drop below a certain point you lower your prices to increase sales.

[*Legion*]

The talk about $60 games is premature. Once again, we see release titles priced above $50 all the freakin' time. When the consoles get going, don't be surprised to see the prices creep back down.

[Kamalot]

The talk about $60 games is premature. Once again, we see release titles priced above $50 all the freakin' time. When the consoles get going, don't be surprised to see the prices creep back down.
Once the publishers realize that people will buy far fewer $60 than they will $50 games.

[XxSATANxX]

Gurus of games I have a question:

How much mark up does Gamestop/EB games make on a game?

What about stuff like hardware?

Anybody know 4 sure??

Thanks!

[51|RandoM]

You wouldn't make up the loss on the next gen games, obviously. Look at the install base. You're going to sell far more copies of a good ps2 title than you will of a good ps3 title for a good long while. Same for any other console.

Game prices will go up at some point, just like every thing else in life.

[bapenguin]

Gurus of games I have a question:

How much mark up does Gamestop/EB games make on a game?

What about stuff like hardware?

Anybody know 4 sure??

Thanks!

It varies per title. I worked at EB a few years back. Usually EB will buy a new release for 40-45 bucks and sell it for 50. This is for a major title. Less popular stuff may actually have more of a mark up.

Hardware there is 0 profit on. It's simply a sell through.

[frederec]

Gurus of games I have a question:
How much mark up does Gamestop/EB games make on a game?
What about stuff like hardware?
Anybody know 4 sure??
Thanks!

I know you ask for someone who knows for sure, but in lieu of that I'll tell you what I've heard. It's my understanding that the profit margin on new merchandise (hardware and software both) is very slim. Supposedly they make most of their money on used merch, which is why they're always pushing people to trade in games. This is also why I'm told you don't see a whole lot of other people in the game selling business. It's hard to make money.

Of course, this is stuff I've heard from employees/managers of these stores, and could be screwed up in the retelling. I will gladly yield to a more knowledgeable source.

[automaton]

I recall Nintendo saying in a conference call just before launch, that the Gamecube was wholesaling for $192 (it retailed for $199). 4% mark up is pretty pitiful.

[agentgray]

It varies per title. I worked at EB a few years back. Usually EB will buy a new release for 40-45 bucks and sell it for 50. This is for a major title. Less popular stuff may actually have more of a mark up.

Hardware there is 0 profit on. It's simply a sell through.
This was not the case at a major retailer. Maybe because they could buy in larger quantities?

When I was at Wal-Mart, they would purchase a title for $20-$30 and sell it for $50-60. The markup was pretty high. They were ALWAYS the biggest profit making item in the department. Granted this was ten years ago.

Hardware was a sell-through then as well.

[EGO]

All games should be FREE!

That way, the developers / publishers can go broke, then all of the chaff can get weeded out and the games industry can return to being a garage hobby, where only pimp-faced nerds make little bleep-bleep games for themselves and a handful of friends, selling them out of zip-lock bags with paper manuals, printed on dot matrix printers!

[netcraazzy]

Gurus of games I have a question:

How much mark up does Gamestop/EB games make on a game?

What about stuff like hardware?

Anybody know 4 sure??

Thanks!

I worked at Best Buy a few years ago, most of their games they make like $5-$10 profit but the hardware is pretty much no profit. Now accessories like cables, the profit margins on those can reach astronomical proportions.

[Spigot]

I've always daydreamed about opening up my own local videogame store but I've heard too many tales about how the profit margins are so slim as to be almost not worth it. It's kind of a shame. On the one hand the game designers need to make money, hence the cost that they charge the retailers. Unfortunately the game retailer can't mark them up too high because when you're talking about a thing that sells for $60-70 (canadian) that's already pretty pricey for the average person. If you tried to make it cost more, you eat into the amount you'd sell.

Granted, there are always suckers like me who seem to find some way to scrounge up the needed cash for many a game, but I think that I'm in the minority. From seeing my brothers' and my friends' collections, most of them have about 5-6 games total as opposed to my 200 or more (and that's not counting all the ones I traded in/sold).

Sigh...

I hate expensive hobbies/addictions.

[dr_qwandry]

Sounds about right for EA
all they do is rehash games anyway.

[Demize99]

There's a reason bestbuy wants to "accessorize" you when you grab new hardware. I worked in Circuit City for a while, we'd make more commission off the printer cables than the printers, the mouse vs the pc, and the 2nd controler vs the console.

[ianagain]

I know you ask for someone who knows for sure, but in lieu of that I'll tell you what I've heard. It's my understanding that the profit margin on new merchandise (hardware and software both) is very slim. Supposedly they make most of their money on used merch, which is why they're always pushing people to trade in games. This is also why I'm told you don't see a whole lot of other people in the game selling business. It's hard to make money.

Of course, this is stuff I've heard from employees/managers of these stores, and could be screwed up in the retelling. I will gladly yield to a more knowledgeable source.

This is basically true, the mark-up on games is insignificant and does not manage to cover even the overhead of a retail gaming store. This is why you are berated by employees at both major chains with special offers. A strategy guide has a ridiculous mark-up. Recently released used games have up to 100% mark-up. Your trade-ins are even better then cash, because they will be sold at a mark-up that will offset the money they lost on the new game you bought. Systems are often a loss-leader-- when the Xbox first dropped to 149.99 it cost Gamestop about $152 for each system after shipping. If you buy an XBox without buying any accessories, Used games, or a membership card to guarantee your return to the store, you have made the store lose money.

This is why both chains try to push cards that make Used sales easier, trade-ins towards upcoming titles, and advertising revenue for their respecitive magazines. Gamestop is the leader in this market, they were the first to push Used sales, and EB was almost bankrupt before they caught on. Gamestop's VIP program is also brilliant, giving you extra store credit as long as you trade-in games for upcoming titles intead of spending cash on those titles. The customer never really loses with these deals, besides the five minutes wasted when they're pitched with each visit, and its the only thing keeping seperate retail chains alive in the face of competition that can buy in much larger bulks and rely on other sales (ie Walmart, Best Buy.)

[mister_slim]

Console games keep their value much longer then PC games. Halo 2 is still selling for 50$ while Half-life 2 is selling for 30$
Actually, I've seen the H2 collector's edition being dropped to $30 at several stores.

I remember that the wholesale on the $20 retail ESPN games was $17, and I expect the margin to be about the same all the way up to $50.