Are Gaming Companies Giving Us the Finger?

Nov 29
02:00

2008

Jerome Robinson

Jerome Robinson

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Are Gaming Companies Giving Us the Finger? Or are games these days actually underpriced?

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The average video games these days set you back £40 or $60USD depending on your currency. Not to mention the cost of the consoles and for playing online. For a lot of us this is prohibitive enough for us to buy roughly 8 games a year. Usually we limit our purchases to games we already know - Pro Evolution Soccer,Are Gaming Companies Giving Us the Finger? Articles FIFA, Madden - or to those blockbusters  that blow reviewers away like Fallout 3.

Really  this is no different to the film industry. We stick to what we know, but at $60 a game are the games companies sneaking up behind us and slipping their hand in our pockets? And do we know or care?

Are they they playing on our gaming addiction by making gaming too expensive?

Through my business with HomebreWare, the makers of software that allows you to play copied games on your Nintendo Wii, I know that most people do not know why games are so expensive. I come clean that until I tried my hand at selling games on the internet - about eight years ago and with no success -I had no idea either.

The games were distributed from a wholesaler who was equipped to deal with ‘small fry’. My orders were for a few games at a time, just enough to get around  the delivery charge! They even gave me the goods on credit amounting to several thousand. Aah, those were the giddy days of carefree and effortless  credit. Try getting one now; they’ll want to know everything save for how often you clip your nails.

So where did my wholesaler get their games from?

The manufacturer of course.  The price I paid from the wholesaler was set in stone so they made sure they made their profit. As a retailer all I cared about was making a profit - which ultimately I didn’t.

As a rule a game back then for the PS2 or Xbox cost me, as a retailer, about £15 or $25USD. This was around the time big online websites were selling games for £20-£25/ $40USD. I decided to be a maverick and undercut them, selling games for £20/$30USD. £5 profit per game you think? Think again buster! There were the postal costs as well as the overheads of the business. Ok, I was running it from my bedroom but there was the cost of pizza, fried chicken and cola. And don’t forget that back in those days the turtle's pace, non-cable internet access from AOHell was way overpriced.

The highest costs were advertising. I had no business savvy and was as carefree as the credit companies. Carefree enough to indulge in pay per click ads with Google and to register with a shopping comparison site that was also pay per click. The result was $5,000 of clicks and about 10 sales. Anyone smell a rat here?  I couldn’t afford to pay.

So don’t blame your average online or offline retailer for the cost of games. They have to make money too otherwise they may as well become homeless shelters. They aren’t like supermarkets, putting the squeeze on suppliers to cut costs; it just doesn’t work like that.

That brings me back to the original question; why are video games too expensive? To answer that I’ll look into what happens before the game is shipped off by stork to millions of proud owners around the world.

That’s in the next article; “Are Gaming Companies Holding a Gun to Your Head?” (A rough working title!) Where I pinpoint who exactly is to blame for the excessive costs of gaming. You’ll be surprised.