Why are DD games so expensive?

D

Dextar

Gawd
Joined
Nov 5, 2010
Messages
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So alright, I understand why retail box games are $50-60 each when new (more on the $60 end) as they have to pay manufacturing/shipping/retail cuts out of it but can someone please explain to me when I buy a game from a digital download place it STILL costs the same $60?

Are the Steam fees that expensive? Are they just pocketing more money and screwing us?

I really enjoy that D2D has 10-20% off sales constantly but I don't want my games spread around the internet, I love having them in one central location like steam but the prices are starting to get to me to the point where I'll end up waiting to buy a game until it's on sale cheap.
 
Dextar said:
So alright, I understand why retail box games are $50-60 each when new (more on the $60 end) as they have to pay manufacturing/shipping/retail cuts out of it but can someone please explain to me when I buy a game from a digital download place it STILL costs the same $60?

Are the Steam fees that expensive? Are they just pocketing more money and screwing us?

I really enjoy that D2D has 10-20% off sales constantly but I don't want my games spread around the internet, I love having them in one central location like steam but the prices are starting to get to me to the point where I'll end up waiting to buy a game until it's on sale cheap.
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They are so expensive because of the conventional retailers acting butthurt, to be blunt.

The retailers argue that if the publishers through DD-platforms undercut them too much, people will not buy their more expensive stock and therefore the retailer will be "forced" to order less copies of a publisher's games, or not order them at all. The publisher doesn't want this because while DD is becoming more popular, there are still too many people who buy their games from the brick-and-mortar store for them to ignore the retailers' theats to reduce the number of copies they order.

The sooner the market shifts to selling and buying games through digitial distribution so that publishers aren't reliant on extortionist retailers for the majority of their sales, the sooner prices for DD-games will come down.
 
Plague_Injected said:
The sooner the market shifts to selling and buying games through digitial distribution so that publishers aren't reliant on extortionist retailers for the majority of their sales, the sooner prices for DD-games will come down.
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Ha! Why would they lower prices when people will continue paying $60 a game?
 
Datacenters, coders, and bandwidth are not free. The exact same costs are not there for digital vs boxed, but there are still costs associated with each, and developers and publishers deserve to make some profit off what is often years of hard work and substantial non-guaranteed investment. I would be willing to bet you could print/burn/distribute a million copies of a boxed game for what Steam and D2D spend monthly on expenses.

Is $60 too high? Not if people pay it.
 
why does everyone think suddenly cause something is digital it needs to be free?

Bandwidth to host the downloads isnt free
Servers to store the downloads on isnt free
Power to run the back ends isnt free
pushing out updates automatically takes resources and employees
Someone to maintain that whole system, I.T staff, help desk et cetera, it takes more to do something via digital then it does print a disk and give it to a store.


So again, why should it be cheaper? ":DD" offers more then a retail box, i am suprised i doesnt cost ALOT more.
 
Oldie said:
Is $60 too high? Not if people pay it.
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Exactly. It's naive to think that lower manufacturing/distribution costs will result in lower prices. That's not how the free market works. The game publishers don't determine how much a game will cost - us, the customers, do. They sell online copies of the game (I hate the term "Digital Distribution" because every computer and video game since the history of gaming has been a digital distribution, whether it was digitally distributed via punch cards, floppy disks, CDs, DVDs, flash drives, or the internet) for $60 because that's how much customers will pay for it. If the games don't sell, the prices will go down until they do sell.
 
Plague_Injected said:
They are so expensive because of the conventional retailers acting butthurt, to be blunt.

The retailers argue that if the publishers through DD-platforms undercut them too much, people will not buy their more expensive stock and therefore the retailer will be "forced" to order less copies of a publisher's games, or not order them at all. The publisher doesn't want this because while DD is becoming more popular, there are still too many people who buy their games from the brick-and-mortar store for them to ignore the retailers' theats to reduce the number of copies they order.

The sooner the market shifts to selling and buying games through digitial distribution so that publishers aren't reliant on extortionist retailers for the majority of their sales, the sooner prices for DD-games will come down.
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I don't agree that the outcome will be necessarily what you predict. As an entertainment luxury good, games will forever be priced to generate the maximum revenue. What will happen in a purely digital world would be that the publishers can keep the games price more fluid. I am sure publishers would love to price games purely on demand, they will set the price high if it is selling, and lower when sales slow. I would actually expect launch prices to further increase, as there are plenty of people who would be willing (a difference between wanting btw) to pay even in excess of $60 for certain games they desire. At the same time game prices would drop faster once the demand settles, since retail would be there to exert pricing pressure.
 
Eagle156 said:
Ha! Why would they lower prices when people will continue paying $60 a game?
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The evidence for why prices would come down lies in Steam sales - no B&M store can offer the same ridiculous discounts on games like Steam and D2D can. If publishers couldn't afford this or had no inclination to offer such low prices, they simply wouldn't. While it doesn't exactly guarantee that prices would come down in the absence of retailers, it does support the possibility. Games on Steam (other than the CODs) typically come down in price sooner than the B&M copies - Bad Company 2 is US$40 on the Australian Steam, yet still fetches US$90 in stores here.

Retailers are the enemy here with their threats and with their emphasis on flogging second-hand games for prices that are less than 5% cheaper than the "unused" product. I think it's part of the reason why Day One DLC and disc-locked content are starting to become the norm, because publishers and developers make no money on second-hand sales whereas the retailer can essentially sell the same item two or three times, at less cost to them each time. Publishers - EA in particular - are already locking certain parts of games that require Online Passes to access. It comes free with new copies but if you get the game second-hand and the original owner used the pass, you're left with a $10-$20 fee to pay. EA has also said it believes second-hand sales are more damaging to the industry than piracy. I'd argue that part of the reason PC games are now being charged at the same rate as console games, as well as the flood of DLC, is to make up for these perceived lost sales. If the second-hand racket that gamestop and others are running was diminished, the reason for all of this would be less valid and customer anger at the practices would carry more weight.

Note: I'm not against selling your games when you're done with them - I'm against the racket that the game retailers are running, charging $5 less than the full RRP for used, worn and damaged items, and the people stupid enough to buy them. My local EB has more pre-owned games than "unused" games on their shelves.
 
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MrGuvernment said:
why does everyone think suddenly cause something is digital it needs to be free?

Bandwidth to host the downloads isnt free
Servers to store the downloads on isnt free
Power to run the back ends isnt free
pushing out updates automatically takes resources and employees
Someone to maintain that whole system, I.T staff, help desk et cetera, it takes more to do something via digital then it does print a disk and give it to a store.


So again, why should it be cheaper? "DD" offers more then a retail box, i am suprised i doesnt cost ALOT more.
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Nobody expects it to be free but it should cost less. Valve doesn't put up the ads when you open up steam for free, that is advertising cost which they can pocket.

I'm not sure how you think it takes more to do something via digital..
the game goes gold, it goes to the distributor
then needs to make disc copies of the games (The disks have to be created)
then they make all the packaging and then pack it up (The box artwork + anti-theft, think of all the ink needed for those boxes!)
it needs to be sent to DCs for other companies who
then ship the game to the stores who then sell the game.
The price of gas keeps rising and it's expected to reach over $4 a gallon, now mind you this is just US shipping. International shipping + new box art and printing of said box art.. yeah.

If games launched at $40 I could see more people buying games (I'd buy more!) which means in the end more profit.
 
Dextar said:
Nobody expects it to be free but it should cost less. Valve doesn't put up the ads when you open up steam for free, that is advertising cost which they can pocket.

I'm not sure how you think it takes more to do something via digital..
the game goes gold, it goes to the distributor
then needs to make disc copies of the games (The disks have to be created)
then they make all the packaging and then pack it up (The box artwork + anti-theft, think of all the ink needed for those boxes!)
it needs to be sent to DCs for other companies who
then ship the game to the stores who then sell the game.
The price of gas keeps rising and it's expected to reach over $4 a gallon, now mind you this is just US shipping. International shipping + new box art and printing of said box art.. yeah.

If games launched at $40 I could see more people buying games (I'd buy more!) which means in the end more profit.
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DVDs quite literally cost pennies. Packing material is insanely cheap as well. The process of producing a retail disc is very streamlined and quick these days.
 
i seem to remember massive amounts of pc games being purchased by many members here for $5 each.....or was a dreaming? when is the last time you walked into a B&M store and had 50 games to choose from at $5 each? nope....DD still much cheaper, if you gotta have the game NOW, just cant wait, then $60 is the going price

this is about supply and demand and what the market will bear and has nothing to do with distribution method
 
Yes DD has costs but the difference is that they are all directly to the publisher, and so the publisher can to some degree control the costs. Publishers can choose different companies to handle the IT, different server companies, etc. so they have the ability to cut costs when they're able to.

In contrast the packaged version undergoes a list of additional costs that the publishers have no control over which inflate the cost to the customer. Publishers can't control how much retailers pay their staff, pay for store space, what the transport companies pay their employees, etc.
 
MrGuvernment said:
why does everyone think suddenly cause something is digital it needs to be free?

Bandwidth to host the downloads isnt free
Servers to store the downloads on isnt free
Power to run the back ends isnt free
pushing out updates automatically takes resources and employees
Someone to maintain that whole system, I.T staff, help desk et cetera, it takes more to do something via digital then it does print a disk and give it to a store.


So again, why should it be cheaper? ":DD" offers more then a retail box, i am suprised i doesnt cost ALOT more.
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Sir, bandwidth IS cheap . . . . albeit, not free, I heard it costs your ISP 4 cents every time YOU download a GB of data, that's real backbreaking and expensive.

Phone companies charge outrageous sums for text messaging because of all the "strain" it puts on their infrastructure, which is a joke. text messages are often less than a meg and that costs your phone company nothing, yet they charge $29.99 monthly for unlimited text messaging.

So what's all that money? To pay for workers and shit?

No . . . just pure profit.
 
Fail said:
Sir, bandwidth IS cheap . . . . albeit, not free, I heard it costs your ISP 4 cents every time YOU download a GB of data, that's real backbreaking and expensive.

Phone companies charge outrageous sums for text messaging because of all the "strain" it puts on their infrastructure, which is a joke. text messages are often less than a meg and that costs your phone company nothing, yet they charge $29.99 monthly for unlimited text messaging.

So what's all that money? To pay for workers and shit?

No . . . just pure profit.
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Thats a pretty BS number man that really only applies to ISPs at the top of the food chain. Still it doesn't matter since they don't charge data centers four cents a gigabyte.
 
Yes there's a difference between aiming to turn a profit and blatant price-gouging and consumer exploitation.

Of course holding that opinion probably makes me a filthy communist.
 
i remember many years ago when PC games went to the much smaller retail boxes there was talk that the cardboard savings might be passed on to the consumer. They weren't. Then just last year it was announced that, to save on cost, many game publishers would no longer be including paper manuals with retail games. yup, disc-based .pdf only. Even better, prices of AAA games has actually increased ten dollars to $59.99 USD. The fact of the matter is is that cost savings are rarely, if ever, trickled down to the consumer. Capitialism by nature is based on the free-market, and just as much, on greed; anything that cuts cost and increases the profit margin is just more money in someone's pocket. Expecting anything to the contrary is just wishful thinking.
 
Because at this time publishers cannot afford to piss off retailers. Don't believe the BS surveys on the net that "Most people buy through digital download." They don't. Those surveys are unscientific and suffer heavily from selection bias. Ask a publisher and they'll tell you retail is still king. Stardock says they sell about 4 copies retail for every 1 online.

Well, retailers get all kinds of pissed off if there are deals that they aren't in on. You offer one a better price, or sell direct to consumers for less, they'll hiss, spit, and ultimately cut you off and not stock your products. This leads to what you see here.

Happens in other things too. For example my dad used to work for a technical book publisher. They sold their books at retailers of all sorts. However, if you wanted, you could buy straight from them. However if you bought straight from them, the price was full MSRP as listed on the book. go buy at a retailer and it was usually $5 less than that. Well of course it cost them less to sell straight to you, there was more profit. If a book cost $2 to print, they'd sell it to a retailer for $10 who'd then sell it to you for $20. Selling direct to you if they sold it for $11, they'd make more money, but they didn't they sold it for $25 (these are example numbers).

The entire reason was to keep the retailers happy. They didn't care about the direct sales since they were full MSRP and thus actually made the retailers look good.

Same shit here. If digital distribution becomes the One True Way(tm) to buy games, then maybe you see pricing change. However as it stands there is no way they can charge less (outside of sales and promotions). Publishers just won't let them because if it comes down to pissing off Steam or pissing off Walmart, they'll piss off Steam.

Also do remember digital distribution isn't free. It doesn't cost nearly as much to deliver data as some think (less than a cent a gig with an Akamai contract) but you do have to pay something, and hosting, and development and so on. As such, the distributors do charge publishers. Steam isn't free. They take a cut. It is less than retail (which is like a 50% cut) but they take a cut.
 
riggs58 said:
Expecting anything to the contrary is just wishful thinking.
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Well I think part of the problem is that people are too conditioned by computer hardware, and forget about this little thing called "inflation". Money today is worth a bit less than money yesterday. That is how it goes. For the last 60 or so years we have had fairly low, steady, inflation with little to no deflation. That means that it requires a little more money to buy the same amount of stuff each year.

Well, apply that to games. So take a $50 game in 2000. That same $50 is $61 in today's dollars. So to give someone an equal amount of money in terms of purchasing power, you'd have to give them $61 today for the same thing as $50 in 2000. How about 1990? Now it is $81. 1980? $128.

So really, games have gone slower than inflation. Now it makes some sense that they would, I'm not saying they should cost more, but I am saying the whole "They are so greedy," thing doesn't really hold water. The cost of more or less everything slowly creeps up because of continual low level inflation. Thus you can't say "But this has always been $50, why should it be more!"
 
Data isn't cheap in the UK that's for sure, but it's getting better all the time.

The majority of the UK is hooked up through BT's network or networks which resell BT's bandwidth, BT's wholesale costs are publically available and it works out very expensive. Buying in bulk is still the best way.

Still steam is subsidised kind of like broadband is for users, it's all 1 large shared pipe which you get a tiny slice of at any one time, some users download over and over again with very large games and cause a lot of data transfer, some users are the opposite and cause very little, it all balances out in the end.

I think games are too expensive through digital distribution, steam don't need to have that markup for the UK and it's obvious they have no interest in fighting for equal pricing across countries, the $ != € group has existed for a long time.

The only way to fight the prices is to stop buying games on release day at the overblown prices and simply buy them later, unless a game is highly anticipated I don't buy on release day anymore. The only game I'll be preordering is BF3, everything else, even things im looking forward to, I will simply buy after 3-6 months when they go on deal for 50% off on steam.
 
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Derangel said:
DVDs quite literally cost pennies. Packing material is insanely cheap as well. The process of producing a retail disc is very streamlined and quick these days.
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But a game isn't just a DVD, it's all sorts of packaging + distribution, and not least: the 20-25% profit the retailer adds on top, plus grease-money to 'get the good spot'. No way that physical retailing doesn't add at least 20% to the price.

If you want to consider the true cost of digitally distributing a copy, consider a torrent site. If DD was insanely expensive, they couldn't exist.
 
eloj said:
But a game isn't just a DVD, it's all sorts of packaging + distribution, and not least: the 20-25% profit the retailer adds on top, plus grease-money to 'get the good spot'. No way that physical retailing doesn't add at least 20% to the price.

If you want to consider the true cost of digitally distributing a copy, consider a torrent site. If DD was insanely expensive, they couldn't exist.
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And you think Valve doesn't take a nice cut of every sale?

Torrents are peer-to-peer the only bandwidth a torrent site deals with is the minimal amount from visitors and the few kilobyte torrent files. All other bandwidth is used by users between each other all of which is covered by their monthly internet bill.
 
I'm actually liking buying my games on Steam.
I wait for them till they drop in price.
I have a wishlist of 9 games on steam and waiting for some to be around $5 and some to be $19.
I don't mind the wait since I have little time to play and still have 4 or 5 games to finish still.

But prices of games or movies are high because consumers still pay that price so why would retailers change the price?
 
Unless steam or D2D are having a sale, generally it is cheaper for me to import physical copies from overseas.
 
Derangel said:
And you think Valve doesn't take a nice cut of every sale?
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Typically around 30% from what I remember hearing. Also, the developers don't get much at all selling a retail copy. Not only does the publisher take a cut (which may even be the biggest cut) software distributors are yet another middleman, who of course then sell & ship to the retail stores. And they mark it up another 20% (I used to work at a big-chain computer retailer.)
 
It's pretty simple actually, companies don't want to piss off brick and mortar stores. Granted, in a week or two Steam will have the game for $5 or something. The price has nothing to do with packaging or whatever, that's fairly negligible.
 
Oldie said:
Datacenters, coders, and bandwidth are not free. The exact same costs are not there for digital vs boxed, but there are still costs associated with each, and developers and publishers deserve to make some profit off what is often years of hard work and substantial non-guaranteed investment. I would be willing to bet you could print/burn/distribute a million copies of a boxed game for what Steam and D2D spend monthly on expenses.

Is $60 too high? Not if people pay it.
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This. It may not be physical, but you still have AS much cost. If not more: with a physical game, you stamp the CD, done. With a DD game, you have to ALWAYS have the data centers running in case the person DLs the game again.

castun said:
Typically around 30% from what I remember hearing. Also, the developers don't get much at all selling a retail copy. Not only does the publisher take a cut (which may even be the biggest cut) software distributors are yet another middleman, who of course then sell & ship to the retail stores. And they mark it up another 20% (I used to work at a big-chain computer retailer.)
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The developers get their salary. This isn't hollywood, the engineers don't sign a contract to get a cut of the profits.
 
its extra money for the distributor and the studio. Another reason is that pricing a game significantly lower in one place means they have to lower the MSRP in all the places that product is sold. Some times a studio like codemasters will release pc versions cheaper than console games but these are being sold as a product separate from the others.
Studio's cant give steam the go ahead to sell a 60 dollar game at 30 dollars with out giving wallmart and the others the same deal. Wallmart and the others would stop carrying the product and that would mean an absolutely monstrous cut in over all sales.
 
as many have said; games cost as much as people are willing to pay! Personally I rarely pay >$20, sometimes $30 for a game, but enough other people do. I blame all the silly people here that must have the game day 1 and fork over $60 without flinching. Learn some restrain and games will get cheper! :p
 
Sycraft said:
Steam isn't free. They take a cut. It is less than retail (which is like a 50% cut) but they take a cut.
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Which is then used to pay for all of their steam development and support personell, hr, property taxes, hardware, bandwidth, electricty, etc....THEN what they have left is profit. People hear things like 30-50% markup and think they're being gouged even if the retailer is only taking home 2-3% of it.
 
The thing is that we wait ages for games now a days, for example I'm looking forward to Portal 2 but after years of waiting what does an extra few months for a 50% deal mean? It's release price is just grossly too high and despite earning a decent wage I've refused to buy it on release day and I'm going to stick to that.

It's not as if the quality of games released today is so much better than 5 years ago, due to the modern consoles, PC gaming has been in a slump anyway, if there was all this neat new technology to play with then I might be buying on release day, but Portal 2 isn't going to bring anything significant to the table over something released 5 years ago so I just don't feel the need to rush out and get it one day 1, it will still be here in 3-6 months only at a price point that's far more reasonable.

Release a brand new source engine revamped HL3 and I'll have my pre order in faster than you can say "give me all your money" but the console slump has got to me now, I don't feel compelled to play games like I did before, certainly nothing pushing me for a day 1 release. BF3 is the only thing on my radar right now, taking game play relevant destruction and expanding on that, plus the return to 64 player warfare is going to be worth a day one purchase for sure.
 
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I pre-ordered it. :D

Oldie loves him some Portal. :p

Seriously though, I think ethical (non-insane drm) digital distribution, like a lot of steam titles, is a killer boon for PC gaming, especially when it comes to smaller devs. Steam allows the smaller devs to offset a lot of their distribution costs until after the game is available for purchase, instead of having to front the whole publication and distribution costs up front. That way a big chunk of their costs are a direct variation based on sales instead of a static figure they have to hope they recoup. It allows for a larger amount of risk, giving us more innovative titles.

I really don't know where PC gaming would be today without quality digital distribution. I'm 100% certain it even cuts down on piracy quite a bit, because many pirates don't mind buying it now that it's distributed in a friendlier method.
 
rampantandroid said:
This. It may not be physical, but you still have AS much cost. If not more: with a physical game, you stamp the CD, done.
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I hear this said a lot and I've NEVER heard anyone actually state any figures on it. Have you got any proof that it costs as much to produce and distribute a game digitally than a physical retail copy??

From the EB wiki page, EB games alone has 2,280 stores and over 33000 employees. I'm sure some of those are part time, but if you think every store probably has the equivalant of 2-4 full time employees and each store has costs for renting the shop front (which can be anywhere from a few grand up to a hundred grand a year per store) and that's just EB. Then you have people packaging the games and paying for shipping.

How many employees does Valve has servicing and maintaining Steam? How many servers do they have and how much does it cost them?

I hear a lot about how digital downloads cost money to but no actual figures to show how it compares to the retail games industry.
 
Well to be frank, is it any of our business to know how much it costs them? Our only legit concern is whether or not we feel the price they are charging for what we want, is what we're willing to pay. There are obviously costs, whether they're higher or lower I honestly couldn't tell you. I don't think they're raking in a vastly significant more than boxed distributions would at similar sale levels, but again, who cares?

These are video games not food/gas/medicine. If they're able to sell something for 10x what it costs to make them, well that's pretty awesome for them. I'm getting products that I feel are a value, so it's pretty awesome for me too.

Making money is not evil...I'm pretty sure we all want to be paid as much as possible for what we do as well. I'm willing to bet that if your boss walked up and said "Hey, we're overcharging customers so we're going to cut your paycheck a bit to give them a bigger discount" you would be pissed as hell.
 
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