Are we paying more for less?

[Leif_-]

DragonFire11 said:
I think major publishers make a mistake discounting their titles. I seldom purchase a new title because I know if I just wait a few months I'll get a steep reduction. I assume that the publishers are pressured into this due to the fight for shelf space at retail.

Well, there's several reasons for them to do this, I suppose. Partly, of course, it's not the publishers that discounts the titles, but the actual stores, who don't have the same interest in keeping prices high (as they have to bear the brunt of the inventory costs.)

Next, there's a question of time-limited marketing campaigns. Once the main marketing thrust around launch is over, I suspect most games see their sales taper off very sharply. To take some numbers out of thin air, if they sell 85% of the copies during the initial marketing blitz, it doesn't really make much of a difference to the bottom line if the remaining 15% sell for 100% of the original price or 50%.

Third, the large game developers share a product model with Hollywood, in that most of their products do not make a profit, but the cost is offset by the rare golden birds that make huge profits. They chase the blockbusters, and the fate of the other games, once it's clear they're not going to be a blockbuster, isn't really important to the bottom line.

There's probably a lot more factors involved. I'm not really that familiar with the economics of the industry or, for that matter, with economics in general.