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[DeuceGamer]

I think we all know cartridges are more expensive than discs. But $10 more? I have a hard hard time believing that.

This. We know they are more expensive, and I'm sure some devs/pubs need to pass that difference on to the consumer, but there is no excuse in a $10 price difference when we've seen some games release at the same price as their X1/PS4 counterparts.

 

[LewieP]

Also some Vita games like Uncharted were $50 but I don't think that lasted too long.

Only because Sony stopped making Vita games.

 

[LordRaptor]

Could the blame be put on the publisher?

its very hard to look at the RIME situation and not conclude its the publishers 'fault' (although I think 'mistake' is more accurate).
- its a mistake to openly use price discrimination, because the development and production costs are literally different for every platform, and - swings and roundabouts - its probably not wise to draw attention to that where you are not offering discounts on cheaper to produce versions
- if production costs are such that there is not enough of a margin to justify a physical retail release at standard retail pricing, its a mistake to go ahead with a physical release anyway because of your desire as a publisher to see boxed copies on shelves for whatever reason.
- if competitors are not seemingly making these mistakes, then its a mistake to handwave your particular situation away without providing details to adequately explain why your situation is so different, because consumers don't care about internal developer-publisher politics

 

[10k]

I can't see a cart being more than $3 to print. I think Thraktor said it was closer to $2. I'll be conservative.

While that is much higher than the $0.75 (being conservative) per blu ray disc the difference isn't $10.

What's likely happening is the publisher of Rime doesn't want to eat the costs and lose out on profit margin, so they upped the price $10 because of that.

 

[DeuceGamer]

I can't see a cart being more than $3 to print. I think Thraktor said it was closer to $2. I'll be conservative.

While that is much higher than the $0.75 (being conservative) per blu ray disc the difference isn't $10.

What's likely happening is the publisher of Rime doesn't want to eat the costs and lose out on profit margin, so they upped the price $10 because of that.

We also had others state that the $10 increase for Rime was not related to Cart prices. I think most realize they are more than Blu-Ray, but there is no excuse that they are $10 more US (and $30 more in Australia).

 

[tokkun]

Game cards cost a couple dollars more yes, they don't cost $10 more.

I would guess there are 2 other factors besides incremental manufacturing cost that determine the per-unit cost passed on to consumers:

1. There is likely some fixed costs associated with each game that needs to be amortized across all units sold. Hence it will be higher on games with a smaller number of total units.

2. The companies also need to price in the risk that a unit will not be sold (or the opportunity cost before it is sold since they have to pay upfront).

 

[Seik]

Maybe it's the cost of that thing they put on the cartridges so that we don't eat them that costs so much! :X

 

[geordiemp]

I can't see a cart being more than $3 to print. I think Thraktor said it was closer to $2. I'll be conservative.
.

So if it costs $ 3 to actually make say a 16 gb cart and Nintendo do this as a service and a production run.......

I am interested in what price would you think Nintendo would charge to do a batch run ? I really am, is Nintendo known for small mark ups ?

There is often a difference between cost and price to publisher...its called profit margin

 

[Eolz]

There's no way it costs 10£ more for cartridges, even in small batches and high capacity.
Really weirdly worded "report" from EG there...

 

[JaseC]

He is

Well, I explained that I grew curious and went digging through his post history but found no hard evidence that he's a video game developer, just a comment that may or may not point in that direction, so I'm sure you can understand that "He is" does little to assuage doubt. To be perfectly honest, it seems to me that the impression he's a developer stems primarily (if not exclusively in some cases) from his matter-of-factly demeanour.

 

[boiled goose]

Digital Games being more expensive yet unclear policies regarding what happens to our digital content at generational transitions?

LOL non thanks.

I'll buy physical till I know what I'm actually buying. I can resell it if I don't like it. With digital on Nintendo, I don't even get to keep it attached to a unified account. Everything lost at gen transitions.

 

[Bazry]

We haven't even mentioned the AUS version of Rime in here yet that came up in the other thread

$49.95 on PC
$59.95 on XB1/PS4
$79.95 on Switch

 

[ramparter]

We haven't even mentioned the AUS version of Rime in here yet that came up in the other thread

$49.95 on PC
$59.95 on XB1/PS4
$79.95 on Switch

Damn

 

[LordRaptor]

There is often a difference between cost and price to publisher...its called profit margin

Console manufacturers have built in profit margins on literally every copy produced via licence fees, and costs of SDKs and certification, which amount to significantly more than nickel and diming on prices of physical media.

 

[RampagingSoul]

We haven't even mentioned the AUS version of Rime in here yet that came up in the other thread

$49.95 on PC
$59.95 on XB1/PS4
$79.95 on Switch

Wow...

 

[Tonyx]

It's probably true that cartridges cost more to make, but I think the higher price is also connected to the Switch being pretty new, for two reasons:

1) Nobody really knows how successful it will be, so they can't order millions of cartridges (which would probably lower the cost).

2) There are very few games out there now. It's the best time to sell an overpriced game as all the Switch owners are hungry for more.

 

[Okami Haundo]

its very hard to look at the RIME situation and not conclude its the publishers 'fault' (although I think 'mistake' is more accurate).
- its a mistake to openly use price discrimination, because the development and production costs are literally different for every platform, and - swings and roundabouts - its probably not wise to draw attention to that where you are not offering discounts on cheaper to produce versions
- if production costs are such that there is not enough of a margin to justify a physical retail release at standard retail pricing, its a mistake to go ahead with a physical release anyway because of your desire as a publisher to see boxed copies on shelves for whatever reason.
- if competitors are not seemingly making these mistakes, then its a mistake to handwave your particular situation away without providing details to adequately explain why your situation is so different, because consumers don't care about internal developer-publisher politics

You perfectly summed up my thoughts on the whole RIME situation! I don't see their example being a major cause for concern in regards to Switch.

 

[FinaruDensetsu]

Weird that vita cart games are generally $10 less than ps4 ports but switch carts are $10 more or even.

 

[Thraktor]

The article makes the mistake in assuming that consumer prices for software (even physically distributed software) has anything at all to do with the cost of the media itself. It doesn't. Profit-maximising software prices are purely determined by customers willingness to pay, and the publishers of Rime are clearly of the belief, rightly or wrongly, that Switch owners will be willing to pay more for the game than players on other platforms (which isn't an uncommon practice at all for new platforms).

Edit:

Digital Games being more expensive yet unclear policies regarding what happens to our digital content at generational transitions?

LOL non thanks.

I'll buy physical till I know what I'm actually buying. I can resell it if I don't like it. With digital on Nintendo, I don't even get to keep it attached to a unified account. Everything lost at gen transitions.

It's strange to single out Nintendo on this, a grand total of zero of my PS3 games were playable on PS4. (Switch games are attached to a unified account now, too).

 

[Champion]

N64 all over again.

 

[TheMagician]

Don't remember the cost of a cartridge being an issue with the DS, 3DS or Vita.

 

[Shizuka]

Is that why we got an entire generation of $60 games on the Vita and 3DS? Please, don't up the ante and blame the cards.

 

[nelsonroyale]

UK prices are a joke when it comes to digital as they charge full RRP which shops other than Game don't

PS4 luckily i don't mind as they have tons of sales quite early on for digital games

Yeah, this is a disgusting practice. I would prefer to go digital, but the prices are prohibitive...

 

[10k]

We also had others state that the $10 increase for Rime was not related to Cart prices. I think most realize they are more than Blu-Ray, but there is no excuse that they are $10 more US (and $30 more in Australia).

Right.

There's much more to it than that.

The following is all rough math with no actual manufacturing costs of each company:


If you take my example numbers, it would cost $3 a cart. Let's say they do a production run of 100,000 carts for Switch. That's $300,000 in manufacturing right there.

To print the same quantity for PS4/XB1 it's about $75,000. ($0.75 a disc)

That's a $225,000 difference right there.

Keep in mind, console makers get a 30% cut and retailers usually get %20. So for the $29.99 retail price, the publisher gets $14.99 (50%).

If they only anticipate 100,000 copies sold for each platform, you're looking at revenue's of 1.5m for PS4 and XB1 copies minus the $75k each it took to print those discs (so a profit of 19.99% so let's round up to 20%).

If the switch version also sells all of the 100,000 copies at the same price of $29.99 minus the manufacturing of carts ($300k) you're looking at a profit of 1.5m - 300k = 1.2m. The profit margin of that is 4%.

Notice how the profit margin for retail PS4 and XB1 games is 20% vs the 4% of the Switch retail units? That isn't a big enough return on investment.


So in order to make up for that cost, they either need to sell many more switch copies or charge more for their game. They likely have a target sales number and market research that suggests it won't sell enough at retail to warrant the extra costs, therefore, they charge more.

So what happens when they charge $39.99? They get their 50% cut of each which is now $19.99. If they sell all 100k they manufactured at that price the profit margin becomes (4m revenue - 300k manufacturing = 3.6m) $3.7m/300k = 12.33% profit margin.

So basically, it's not just as simple as saying "carts don't cost $10 more to make so why is the game $10 more?" there's more to it than that.

Add in the risk of unsold copies and they need to add a little cushion. The publisher would probably need to sell it for $45 to get a profit margin on par with the disc based games.

 

[SomedayTheFire]

Right.

There's much more to it than that.

The following is all rough math with no actual manufacturing costs of each company:


If you take my example numbers, it would cost $3 a cart. Let's say they do a production run of 100,000 carts for Switch. That's $300,000 in manufacturing right there.

To print the same quantity for PS4/XB1 it's about $75,000. ($0.75 a disc)

That's a $225,000 difference right there.

Keep in mind, console makers get a 30% cut and retailers usually get %20. So for the $29.99 retail price, the publisher gets $14.99 (50%).

If they only anticipate 100,000 copies sold for each platform, you're looking at revenue's of 1.5m for PS4 and XB1 copies minus the $75k each it took to print those discs (so a profit of 19.99% so let's round up to 20%).

If the switch version also sells all of the 100,000 copies at the same price of $29.99 minus the manufacturing of carts ($300k) you're looking at a profit of 1.5m - 300k = 1.2m. The profit margin of that is 4%.

Notice how the profit margin for retail PS4 and XB1 games is 20% vs the 4% of the Switch retail units? That isn't a big enough return on investment.


So in order to make up for that cost, they either need to sell many more switch copies or charge more for their game. They likely have a target sales number and market research that suggests it won't sell enough at retail to warrant the extra costs, therefore, they charge more.

So what happens when they charge $39.99? They get their 50% cut of each which is now $19.99. If they sell all 100k they manufactured at that price the profit margin becomes (4m revenue - 300k manufacturing = 3.6m) $3.7m/300k = 12.33% profit margin.

So basically, it's not just as simple as saying "carts don't cost $10 more to make so why is the game $10 more?" there's more to it than that.

Add in the risk of unsold copies and they need to add a little cushion. The publisher would probably need to sell it for $45 to get a profit margin on par with the disc based games.

regardless of your tag which will no doubt be quoted. this is a fairly simple explanation that covers a fair bit of the topic

 

[10k]

regardless of your tag which will no doubt be quoted. this is a fairly simple explanation that covers a fair bit of the topic

Thanks. Typed it all on my phone lol.

People will ignore it because of my tag though. Which was promised to be removed when Switch launched

 

[jmizzal]

Rime Switch is listed as 29.99 on gamestop, do they honor preorder prices?

 

[Shiggy]

It's strange to single out Nintendo on this, a grand total of zero of my PS3 games were playable on PS4. (Switch games are attached to a unified account now, too).

Aren't games such as Shovel Knight cross-buy? If you own it on 3DS and want to play it on Switch or Wii U, you need to pay full price again. If you own it on PS3, you can play it for free on Vita and PS4.

Seems to apply to indie games only though.

 

[antibolo]

The real elephant in the room remains the stupid fact that digital stores always charge the same price as retail, even though the profit margins are significantly greater.

That's bullshit on all consoles, not just the Switch.

 

[SomedayTheFire]

The real elephant in the room remains the stupid fact that digital stores always charge the same price as retail, even though the profit margins are significantly greater.

That's stupid on all consoles, not just the Switch.

uh it's in the article.

 

[antibolo]

uh it's in the article.

Yeah but my point is that this isn't just a Switch thing.

 

[LordRaptor]

So basically, it's not just as simple as saying "carts don't cost $10 more to make so why is the game $10 more?" there's more to it than that.

Add in the risk of unsold copies and they need to add a little cushion. The publisher would probably need to sell it for $45 to get a profit margin on par with the disc based games.

But then the question looms as to why the Pc version - which has no platform owner fees, and is likely not even on a disk but just a steam code on a slip of paper in the physical release - is being priced at the same as the X1 and PS4 versions is, when it is inherently more profitable per unit.

Which is why it is a really bad idea to start price discriminating at all.
It is also likely that MS and Sony do not have identical fee-structures, and one of those platforms is being overpriced similarly (albeit not by as much)

 

[CDX]

Don't remember the cost of a cartridge being an issue with the DS, 3DS or Vita.

For Resident Evil Revelations, Capcom tried to make it a problem early in the 3DS's life by trying to charge $10 more than the average 3DS game.

Consumer backlash got Capcom to drop the price before release.


Hopefully a similar thing happens on the Switch and publishers stop trying to charge more for Switch cartridges.

 

[Diablohead]

I always find the price thing funny when retail is easily £15 cheaper nearly every time a new game comes out at full price. Digital prices here are a crime

 

[tebunker]

Thanks. Typed it all on my phone lol.

People will ignore it because of my tag though. Which was promised to be removed when Switch launched

Not sure you calcs are right. You didn't show all your work. Your relative point is right but I'm not sure of your math.

The key is that it potentially costs an extra 2-3x to make a physical run on switch versus PS4. Which would account for a price discrepancy

 

[th4tguy]

Such a policy seems impossible to enforce in Europe where there is no suggested retail price. I call bullshit, especially since we know 3rd parties are free to do their own sales, which suggests they're free to set the pricing as they want.

I'm sure they have that policy internally, but I seriously doubt they have such a rule with 3rd parties.


Weight and dimensions? Both the cards and boxes are smaller (and probably lighter?) than blu ray discs and their cases, this (the dimensions) is something that saves money on distribution, not the other way around.

I think an individual cart is heavier than a disk. With packaging it could even out or even come out ahead, but that all depends on where they are doing packaging. Is it the same factory or are they shipping completed carts to a separate location to be packaged? There are lots of ways for this whole process to become more expensive than just the act of producing the carts.

 

[UnemployedVillain]

Anyone finding a number of recent Eurogamer articles have been fairly reactionary? Like we'll be discussing something on GAF and the next day they'll have an article on it

 

[Iorv3th]

I can't see a cart being more than $3 to print. I think Thraktor said it was closer to $2. I'll be conservative.

While that is much higher than the $0.75 (being conservative) per blu ray disc the difference isn't $10.

What's likely happening is the publisher of Rime doesn't want to eat the costs and lose out on profit margin, so they upped the price $10 because of that.

Don't they have different sized carts though, so could a larger cart cost more?

 

[Dariuas]

What I see, in the case of RIME, is a publisher trying to off load some of their development cost for how long that game was in development for the PS4 and trying to gouge Switch customers because the number of games is currently so low and likely will still be low by the time the game is released.

As I have mentioned a couple of times, the decision made was not in an attempt to price gouge or take advantage of a situation. We considered various factors when making this decision.

 

[10k]

But then the question looms as to why the Pc version - which has no platform owner fees, and is likely not even on a disk but just a steam code on a slip of paper in the physical release - is being priced at the same as the X1 and PS4 versions is, when it is inherently more profitable per unit.

Which is why it is a really bad idea to start price discriminating at all.
It is also likely that MS and Sony do not have identical fee-structures, and one of those platforms is being overpriced similarly (albeit not by as much)

Could be for a multitude of reasons:

1) They don't want to undercut the platform holder prices because they anticipate that's where the majority of their sales will be and also so there's no conflict for future releases (don't burn bridges)

2) They have a target forecast for PC and want to leave room for a price cut if it doesn't sell or they want more money from inevitable steam sales

3) The game started as a Sony funded product and may contain some kind of anti-competitive clause where if they decided to finish the game and have someone else publish it, it can't be priced cheaper than the PS4 version if the game is released before a specified date.

 

[Sword Of Doom]

I don't remember this being the case with cross platform physical PS4/Vita games. Or does Nintendo charge much higher than Sony for their cartridges?

Maybe proprietary tech plus large size of games

 

[dcx4610]

Passing the manufacturing costs onto consumers is nothing new. The bigger the ROM size, the more expensive the game. If a Switch game costs $3 to manufacture for the publisher, that's a loss of $150,000 if they sell 500k units. It's just bottom line business.

I still remember these days...

 

[Agent Gibbs]

The digital physical argument is a strange one to me since almost every game on the PSN is higher than in bricks and mortar stores when it first comes out and there after unless its in a sale!

That isn't a Nintendo problem, that's an industry pandering to ailing bricks and mortar stores whom if they fear digital so much, should alter their business practices accordingly aka Game not charging 20% more than every other retailer for physical copies

 

[Dariuas]

We haven't even mentioned the AUS version of Rime in here yet that came up in the other thread

$49.95 on PC
$59.95 on XB1/PS4
$79.95 on Switch

I mentioned in the other thread that I am looking into this price variance. I just got back into the office and will update everyone when I have more information to share.

 

[LordRaptor]

Could be for a multitude of reasons:

1) They don't want to undercut the platform holder prices because they anticipate that's where the majority of their sales will be and also so there's no conflict for future releases (don't burn bridges)

2) They have a target forecast for PC and want to leave room for a price cut if it doesn't sell or they want more money from inevitable steam sales

3) The game started as a Sony funded product and may contain some kind of anti-competitive clause where if they decided to finish the game and have someone else publish it, it can't be priced cheaper than the PS4 version if the game is released before a specified date.

Those are literally all good reasons why its a good idea to not price discriminate at all though, and just present the product as being of a single cost (or a single value) because the marginal gains on one platform offset the lower marginal gains on another.

 

[Mafro]

Captive audience. When your system only has 4 physical games and about as many unique digital ones, and very little coming out on the physical front for months, people will pay more to get anything new to play, and developers know this.

Not me. Didn't buy Bomberman because of the ridiculous price and certainly won't be buying RIME if it's a tenner dearer than other formats because ??? Same goes for Street Fighter II.

 

[jonno394]

SNIP.

I understand what you are doing here, but these numbers etc are a bit of a false representation seeing as profit margin is a case of gross profit divided by total revenue. We don't know the gross profit as we don't know the costs of development etc, how much more expensive/less expensive development is on the switch, and these things will impact the profit margin.

Your point is valid though, just not the figures

 

[Timeaisis]

Rime devs are trying to recoup porting costs to Switch. If they were really concerned about cost of manufacturing cartridges, they would've gone all digital on Switch. This seems like a fake justification for the price hike: "oh, well, cartridges and digital price parity". Uh huh.

 

[Sword Of Doom]

We also had others state that the $10 increase for Rime was not related to Cart prices. I think most realize they are more than Blu-Ray, but there is no excuse that they are $10 more US (and $30 more in Australia).

We don't know if the company can absorb the extra cost. Saying "there is no excuse" is quite a statement and we really don't know anything

I mean it's a bad look, will agree with you there

 

[bennibop]

People seem to be missing that this is Euro gamer article therefore about EU & UK prices not the US.