Yup. But that's the world we live in lol.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.
Yeah tried to get my point across but I guess the numbers didn't help lol. I just put an example of gross profit.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
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 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.
People seem to be missing that this is Euro gamer article therefore about EU & UK prices not the US.
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
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...
Fucked up.
The company wants profit parity across all platforms, I just don't believe the additional cost warrants that big a jump.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?
Isn't rime the only more expensive on switch ? The tittle makes it look like all games are more expensive on the console
If this is indeed a Nintendo written policy I hope EU has a look at it.
Isn't rime the only more expensive on switch ? The tittle makes it look like all games are more expensive on the console
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
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?
Might be due to refund policy in regards to amount of carts ordered.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?
PSN AU for a day of release title
If this is indeed a Nintendo written policy I hope EU has a look at it.
So long as the primary method of delivering gaming hardware and software is through retail, it'll stay this way.This has *always* been the case for download versions of AAA games. They never cost less initially than physical versions. Ever
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
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.
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.
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.
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.
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.
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.
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.
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.
Other way around: there's no digital version of PPT on the PS4. It's the rare retail-exclusive title for that system.
The physical version is the only option for the PS4, actually.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.
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
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...
can we compare it to PS Vita?
as far as i know, Vita's game always cheaper than PS4's ($50 vs $60)
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. 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.
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.
Port cost comes into blame as well.