Destructoid Discusses! The digital bargain bin and virtual shelf space

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If you pay attention, you’ll notice that, for better or worse, the games industry is changing right in front of our eyes. While companies are getting bought up, shut down, and merged, publishers are desperately trying to find new ways to make money: which market should we court? Ads in games? Digital distribution?

There seems to be no clear consensus and we’re left with a slew of business models that have met with varying degrees of success. As obstensibly well-informed consumers, it’s getting harder and harder to gauge what’s actually going on in the industry and more difficult to discern what our favorite companies are going to do next.

We touched on it a bit when we Discussed Braid, but I’ll reiterate: digital distribution (WiiWare, PSN, XBLA, Steam, GameTap, et al.) seems to be moving right along, to the point that some analysts are already singing physical media’s swansong. However, we’re not seeing some of the staples of disc retail being translated into the digital sphere.

Where, then, is the digital bargain bin?

Discuss!

Joseph Leray

PSN, XBLA, and the Wii market have now been around for several months (years in Microsoft’s case), yet we have yet to see the digital equivalent of a bargain bin. Why not? Disc-based games get price drops and Greatest Hits editions and all sorts of little tricks to help push sales after the initial release hype has died down, but Geometry Wars is still $10. Steam and GameTap, however, regularly have sales and special deals and whatnot.

Why the difference in business model? With Microsoft making efforts to clear out games that have low attach rates, putting games on sale seems like a logical step. Where did we get the idea that digital content doesn’t depreciate in value like disc-based games do?

Most importantly, why the hell isn’t Boogie Bunnies $5?

Justin Villasenor

They probably want to discourage waiting for a game to drop in price/go on sale, seeing as how so many people are already doing that with retail releases.

Hamza CTZ Aziz

Wow, this is a really good topic that’s never crossed my mind before.

Maybe it’s because digital games don’t get in the way, so to speak. I know at my [videogame] store, when we want to get rid of shit because we need more room, we drop the price and move it to the “bargain” bin. Physical stores have limited space, so putting games on sale helps them move the product faster to free up shelf space. In the case of DLC, the companies have unlimited “shelf space” and really don’t need to drop the price of a game to make more room.

That’s one side to it, anyway. I can’t say for certain if Virtual Console and PSN titles have ever had price drops, but looking around, I found that some XBLA games have had price drops here and there. In the case of Geometry Wars, it probably still sells well. Look at Halo 1, for example. It didn’t become a Platinum Hit until just around the time Halo 2 was released, and we all know damn well that Halo 1 should have had the Platinum Hit treatment within the year of its release. Microsoft wanted to milk every penny out of the game, and if the product is still selling like crazy, then there’s no need to drop the price even years after the initial release.

Topher Cantler

Fuck $5. Microsoft should pay me a fee for every day that Boogie Bunnies remains on the market.

Knee-Row Gonzalez

The answer must lie in economics. Maybe we’ll eventually see a digital bargain bin, but if sales show that they’re still moving Geometry Wars for $10, then they have no reason to move it. Digital games are typically priced lower, so maybe these games are still printing money overall. Like CTZ said, there’s no giant festering pile of games to move — no fire to put out. They can squat on their assets for as long as they want to because Walmart can’t have sale on them and nobody on eBay can offer up the XBLA greatest hits at a bargain. Time is on their side when it comes to digital.

Colette Bennett

Having spent a lot of years in retail before falling into the gaming industry, I can say that Hamza is absolutely right — it’s about the space that physical product takes up. The motivating factor to put things on sale is to move stock to make room for more stock. I can say that altering the price of, ahem, “less popular” titles would probably make an impact and see more copies sold as gamers love a good deal as much as the next guy.

Samit Sarkar

Yep, Hamza hit the nail on the head with the “shelf space” argument. But I know for a fact that Sony has lowered the price on content at the PlayStation Store before. Last year, they had a sale during Thanksgiving weekend, which is how I picked up Everyday Shooter for $4.99 instead of $9.99 (the other games on sale, also for half price at $4.99, were Calling All Cars, flOw, and PixelJunk Racers). Note that the first three games I mentioned have Metacritic ratings above 70, so it’s not like Sony reduced the price on crappy games (or titles that weren’t selling) in order to get people to buy them.

Another reason that Sony, Microsoft, and Nintendo don’t have a reason to drop prices on digitally distributed content is because of its trade-in and rental potential (or complete lack thereof). With disc-based games, if people don’t want to pay full price upon release, they can either (1) rent through Blockbuster, GameFly, etc.; (2) get them secondhand — buy used at GameStop, trade on Goozex, etc.; or (3) wait until the retail price goes down after a certain amount of time. You can’t do any of those things with Bionic Commando: Rearmed — if you want to play it, you have to purchase and download it from the PSN or XBLA — so there’s no real impetus or incentive for a sale, especially if the games are selling well at their original price point.

Tronathan Holmes

All good points, but one thing no one has mentioned yet is that when a game is cheap, people have a tendency to believe it is actually worth less than if it was expensive. That is to say, people are likely to have more confidence in a game that costs $5 than one that costs $1. I’m of the opinion that if some digital distribution games got cheaper, there would be a temporary spike in their sales, and then a huge dip afterwards. A short-term sale might work just to spur curiosity and get some attention, but a long-term price drop would be suicide.

It’s the same thing with bottled water. People would rather pay $3 for water that fills them with with the belief that they are getting “the good stuff” than free tap water. If it’s free (or cheap), then there must be something wrong with it.

Come to think of it, this “cheap is bad” thinking has been a part of gaming for a while. I remember when the GameCube dropped to $99. I expected it to start kicking the Xbox’s ass, and it did…for a few months. After that, most people I knew wanted the console even less than before, because they claimed, “If it’s so cheap, it must suck.”

With the 360’s arcade SKU dropping to below $250, I can’t help but wonder if the same fate will befall it.

Brad Rice

I wonder how releasing more PS2 and Xbox games online will affect competition between stores and digital? Like, if they start offering Arcana Heart for $10 less than in stores, will people start buying it online, forcing GameStop/others to lower their prices in competition?

Tronathan

Well, I know that people are always saying that gaming isn’t like any other entertainment industry (music, movies, etc), but I still think there is something to be said for at least looking at other forms of entertainment and how they sell.

Have CD prices dropped since the advent of iTunes?

And what the fuck is Arcana Heart?

Brad Rice

Arcana Heart review.

Tronathan

Oh yeah, I’ve seen that game around! Looks hot, like a cross between Atelier Iris 3 and Steambot Chronicles.

(Note to self — To gain Brad Rice’s respect, pretend you’ve played every obscure JRPG/relationship sim ever made).

Brad Rice

…..

It’s a 2-D fighter.

…..

FAIL.