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[zoukka]

Fucked up.

 

[10k]

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.

Yup. But that's the world we live in lol.

 

[10k]

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

Yeah tried to get my point across but I guess the numbers didn't help lol. I just put an example of gross profit.

 

[SinCityAssassin]

I don't see carts warranting the cost to be that much higher than other prices. I'll continue seeing this as a cvash grab for a new system launch.

 

[Zombie James]

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...

Yup. I hope it doesn't get that bad again, though. I wonder what this will mean for bigger AAA 32GB+ releases in the future. I'd image they'd be more willing to absorb costs than an indie but when we're talking about multi-million copy releases... I don't know.

I don't see carts warranting the cost to be that much higher than other prices. I'll continue seeing this as a cvash grab for a new system launch.

You do acknowledge that carts are more expensive than optical, right? Whether it's $5, $10, or whatever, who do you expect to pay these extra costs?

 

[TangoAlphaLima]

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

But there are price disparities in the U.S. as well.

 

[jonno394]

I don't see carts warranting the cost to be that much higher than other prices. I'll continue seeing this as a cvash grab for a new system launch.

As 10K points out, seeing as retail and Nintendo take out like 50% of the rrp, to recoup the additional cost the cart adds to the game production ($4), the game would need to retail at an additional $8 on the rrp.

if $30 is what the game costs on disc ($15 to pub/dev) then the game selling on card at $30 would only bring $11 to the pub/dev ($30-50%-$4). To get to that $15 mark again the game would need to sell at $38, and because no-ne retails at such a stupid number, they up it to $40

 

[LordRaptor]

As 10K points out, seeing as retail and Nintendo take out like 50% of the rrp, to recoup the additional cost the cart adds to the game production ($4), the game would need to retail at an additional $8 on the rrp.

if $30 is what the game costs on disc ($15 to pub/dev) then the game selling on card at $30 would only bring $11 to the pub/dev ($30-50%-$4). To get to that $15 mark again the game would need to sell at $38, and because no-ne retails at such a stupid number, they up it to $40

In theory.
In practice a number of people greater than zero will say "Why is that more expensive to me than to someone else? I am not buying that now."

And now setting your price to equalise marginal revenue on one platform results in lower total revenue than not doing so.

 

[thematic]

can we compare it to PS Vita?
as far as i know, Vita's game always cheaper than PS4's ($50 vs $60)

 

[DeuceGamer]

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...

The cost is definitely being passed to the consumers. Some believe it's the Publisher/Developer and some believe it's Nintendo.

I'm sure the carts do cost more, but I don't believe the price difference is anywhere near $10, regardless of print runs or cart size. If the price of the carts is not $10 more over blu-rays, then why are they charging Switch owners $10 more for a late port?

 

[rokero]

Isn't rime the only more expensive on switch ? The tittle makes it look like all games are more expensive on the console

 

[somecrazymember]

Fucked up.

 

[SinCityAssassin]

You do acknowledge that carts are more expensive than optical, right? Whether it's $5, $10, or whatever, who do you expect to pay these extra costs?

The company wants profit parity across all platforms, I just don't believe the additional cost warrants that big a jump.

 

[Nostremitus]

Shouldn't be much different than 3DS carts.

Nintendo owns the manufacturing equipment.

 

[TangoAlphaLima]

Isn't rime the only more expensive on switch ? The tittle makes it look like all games are more expensive on the console

Puyo Puyo Tetris is $10 more for the physical version on Switch (there is no PS4 physical), but it does come with a couple of keychains packed in.

 

[Screamapillar]

This has *always* been the case for download versions of AAA games. They never cost less initially than physical versions. Ever

 

[The_Lump]

If this is indeed a Nintendo written policy I hope EU has a look at it.

Indeed.

I've never heard of it being written into policy before (would be surprised if it is tbh) but it seems to be industry wide in practise either way, which is even more concerning.

There is no valid, justifiable reason that a digitally delivered game should ever be the same price (or more, as is on most digital stores) as retail. Being artificially inflated is the only explanation.

 

[Serenitynow]

Isn't rime the only more expensive on switch ? The tittle makes it look like all games are more expensive on the console

Even though you can't compare them to other consoles, theorectically this explains why Bomberman and Street Fighter are over-priced to some people.

 

[guybrushfreeman]

This has *always* been the case for download versions of AAA games. They never cost less initially than physical versions. Ever

This is provably false. I always buy wherever is cheapest and at times I ended up buying on PSN because it was actually cheaper. It has never been true on a Nintendo platform though as far as I know

 

[Mzo]

The market will bear it out. I'm not paying more than I need to for a game, I'll wait for the price drop as they languish on the shelves. I damn sure aren't going to buy a digital license rental without a significant discount.

 

[LordRaptor]

This is provably false. I always buy wherever is cheapest and at times I ended up buying on PSN because it was actually cheaper. It has never been true on a Nintendo platform though as far as I know

PSN at the UK pricing for a new AAA title, PSN at sale pricing a few months post release, or PSN in another countries VAT free pricing?

 

[guybrushfreeman]

PSN at the UK pricing for a new AAA title, PSN at sale pricing a few months post release, or PSN in another countries VAT free pricing?

PSN AU for a day of release title

 

[haimon]

The cost is definitely being passed to the consumers. Some believe it's the Publisher/Developer and some believe it's Nintendo.

I'm sure the carts do cost more, but I don't believe the price difference is anywhere near $10, regardless of print runs or cart size. If the price of the carts is not $10 more over blu-rays, then why are they charging Switch owners $10 more for a late port?

Might be due to refund policy in regards to amount of carts ordered.

If Nintendo continue their policy of not accepting returns on carts manufactured (and I see no reason to believe they have), then the pub will pass along that risk to the consumer.

 

[LordRaptor]

PSN AU for a day of release title

Well this is about UK pricing, and UK PSN is not price competitive with UK retail pricing, because UK retail is extremely cut throat on margins (and the UK has famously been described insultingly as a nation of shop keepers)

 

[jonno394]

If this is indeed a Nintendo written policy I hope EU has a look at it.

You make a very valid point, this is the sort of thing the EU does not allow, and actually makes me think it may be incorrect as Nintendo have got in trouble for this thing before with the EU so they should know they won't stand for it.

 

[10k]

This has *always* been the case for download versions of AAA games. They never cost less initially than physical versions. Ever

So long as the primary method of delivering gaming hardware and software is through retail, it'll stay this way.

 

[guybrushfreeman]

Well this is about UK pricing, and UK PSN is not price competitive with UK retail pricing, because UK retail is extremely cut throat on margins (and the UK has famously been described insultingly as a nation of shop keepers)

It is proof there's no PSN EU restriction in place however preventing it

 

[LordRaptor]

It is proof there's no PSN EU restriction in place however preventing it

PSN AU pricing has literally nothing to do with PSN EU pricing, let alone provide any proof
For literally years EU purchasers have bought UK retail rather than PSN EU or EU retail due to the UKs cut-throat retail environment.

 

[inpHilltr8r]

efficient price discovery is hard

 

[DeuceGamer]

Puyo Puyo Tetris is $10 more for the physical version on Switch (there is no PS4 physical), but it does come with a couple of keychains packed in.

If Rime done this I think the entire situation would have been avoided.

Edit: and in this case I would have chose to go with the Switch version.

 

[guybrushfreeman]

PSN AU pricing has literally nothing to do with PSN EU pricing, let alone provide any proof
For literally years EU purchasers have bought UK retail rather than PSN EU or EU retail due to the UKs cut-throat retail environment.

I'm not sure what you mean. I'm referring to Sony Europe who manage the AUS UK and EU stores. There is no policy in place that software must not be cheaper digitally from that company. If the UK store is never cheaper that's up to them but other regions from the same company show it is possible

 

[TangoAlphaLima]

If Rime done this I think the entire situation would have been avoided.

Yup, that would have been the smart move. Throw in some stupid tchotchke they can mass produce for $1 each, and they'd avoid at least some of the controversy.

 

[DeuceGamer]

Yup, that would have been the smart move. Throw in some stupid tchotchke they can mass produce for $1 each, and they'd avoid at least some of the controversy.

Yep...I hope other Pubs are paying attention.

 

[jackal27]

Digital copies should be able to be priced lower than physical. That's ridiculous.

 

[Bazry]

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.

What happens to their profit margins after they've pissed off their target audience for both physical and digital, plus those on other platforms that were kind of interested in picking the game up but now won't bother because they believe this practice to be wrong?

If everything you've said there is true, then the decision to release a physical version makes absolutely no sense. If you want a physical presence to bring attention to your game, then you eat the cost of it and don't bring such negativity that could make your game a flop before its even released

 

[Zombie James]

Yup, that would have been the smart move. Throw in some stupid tchotchke they can mass produce for $1 each, and they'd avoid at least some of the controversy.

Yep...I hope other Pubs are paying attention.

This is all it would take for you guys to be happy with a $10 price increase on a regular copy of a game? A cheap trinket? I hope publishers aren't paying attention.

 

[The Cartographer]

Get fucking ready for SMT Switch.

Atlus US taxes + Switch taxes.

 

[Ridley327]

Puyo Puyo Tetris is $10 more for the physical version on Switch (there is no PS4 physical), but it does come with a couple of keychains packed in.

Other way around: there's no digital version of PPT on the PS4. It's the rare retail-exclusive title for that system.

 

[DeuceGamer]

This is all it would take for you guys to be happy with a $10 price increase on a regular copy of a game? A cheap trinket? I hope publishers aren't paying attention.

Didn't say it's what I wanted but look at Atlus. They routinely got by with $50 3DS games by releasing First Print editions. If Publishers want to avoid this then yes, I hope they are paying attention.

Edit: it also depends on what was included for me personally. I'm fond of soundtracks and a real Physical full color manual like Shovel Knight. If they are going to increase the cost anyway at lease include something extra.

 

[TangoAlphaLima]

This is all it would take for you guys to be happy with a $10 price increase on a regular copy of a game? A cheap trinket? I hope publishers aren't paying attention.

For me? Hell no. I'm talking for the population in general. You know, the kind that happily pays full retail price for games, or even double that to get some stupid trinkets in a "Collector's" Edition.

There is no outrage about the increased price fro the physical version of Puyo Puyo Tetris, and that's probably in large part due to the inclusion of keychains that were mass produced for about $1.

Other way around: there's no digital version of PPT on the PS4. It's the rare retail-exclusive title for that system.

Dammit, I keep screwing that up. I knew it wasn't on one or the other for PS4.

 

[PreyingShark]

Puyo Puyo Tetris is $10 more for the physical version on Switch (there is no PS4 physical), but it does come with a couple of keychains packed in.

The physical version is the only option for the PS4, actually.

I blame Ubisoft. EDIT: looooool so slow.

 

[Stanng243]

What happens to their profit margins after they've pissed off their target audience for both physical and digital, plus those on other platforms that were kind of interested in picking the game up but now won't bother because they believe this practice to be wrong?

If everything you've said there is true, then the decision to release a physical version makes absolutely no sense. If you want a physical presence to bring attention to your game, then you eat the cost of it and don't bring such negativity that could make your game a flop before its even released

Do you really think the mainstream cares about this? If it reviews well, the masses won't care.

 

[bishopcruz]

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...

I assume those are Canadian prices? SNES was expensive but Earthbound was never 90 in the US. If this continues, though I think the n64 would be a better example. No one wants to pay more for the same game on a different platform.

 

[Broken Hope]

can we compare it to PS Vita?
as far as i know, Vita's game always cheaper than PS4's ($50 vs $60)

Yeah cause development of a game for the Vita is the same as the PS4 right?

The reason they can sell Vita games cheaper despite the media being more expensive is that developing a Vita game is cheaper.

The same goes for 3DS.

If you want your Switch games to look and play like 3DS titles I'm sure they could sell them for cheaper.

 

[dcx4610]

The cost is definitely being passed to the consumers. Some believe it's the Publisher/Developer and some believe it's Nintendo.

I'm sure the carts do cost more, but I don't believe the price difference is anywhere near $10, regardless of print runs or cart size. If the price of the carts is not $10 more over blu-rays, then why are they charging Switch owners $10 more for a late port?

Port cost comes into blame as well. I was disappointed Nintendo went with ARM because that means companies have to devote entire teams into porting games to their system. It might be "easy" to port but it still costs time, money and requires teams. PS4/XB1/PC are all x86 now and the Switch will suffer being the lone system with a different architecture.

Rime's $10 Nintendo tax is certainly due to ARM and the cartridge format.

 

[LordRaptor]

Port cost comes into blame as well. I was disappointed Nintendo went with ARM because that means companies have to devote entire teams into porting games to their system. It might be "easy" to port but it still costs time, money and requires teams. PS4/XB1/PC are all x86 now and the Switch will suffer being the lone system with a different architecture. I think they should have went Android since companies are invested in that platform.

Rime's $10 Nintendo tax is certainly due to ARM and the cartridge format.

... what do you believe is the most common architecture that Android is being run on?

 

[Vena]

Port cost comes into blame as well. I was disappointed Nintendo went with ARM because that means companies have to devote entire teams into porting games to their system. It might be "easy" to port but it still costs time, money and requires teams. PS4/XB1/PC are all x86 now and the Switch will suffer being the lone system with a different architecture. I think they should have went Android since companies are invested in that platform.

Rime's $10 Nintendo tax is certainly due to ARM and the cartridge format.

I.... What?

Should not have gone ARM but go Droid (which is an OS not an architecture)... which is generally to universally run on ARM?

And x86 requires less porting between systems because... why?

Your post is nonsense.

 

[MadMod]

Makes sense. But surely they should raise it by like £5 not £10?! Or even like £2/3/4. But apparently people only do prices in tens. I think that's the only way I see Nintendo multiplatform games being competitive with Multi-platform games on other systems.

 

[TangoAlphaLima]

Port cost comes into blame as well.

Has the cost of porting ever been put on the consumer before? It seems like publishers won't port if the profit won't be there to justify the porting cost, but I don't recall a game being priced higher simply because it cost the publisher money to port it.

 

[dcx4610]

Yeah, I goofed. Ignore me. Still, it still costs money effort to port to ARM and instead of one team working on x86 platform ports for 3 systems, they would need a team just for ARM/Switch and I'm not sure many devs are willing to take the risk.