
But UK retail says it will continue to drop prices on software in the lead up to Christmas
Following a spate of aggressive promotions from the likes of Morrisons, Woolworths and Asda, leading industry figures have urged retail to hold fire on further cuts to new release pricing.
With fears over the economy at an all time high, ultra-crowded release schedules and retailers fighting for supremacy, many are concerned that new release prices could plummet.
And now publishers have pleaded with the trade to keep its nerve as the festive pressure mounts. “Price cuts in an industry which shines above the gloom can only be the strategy of those concerned that their mode of delivery to the consumer is facing threats, and they are doing their best to accelerate their own demise,” Codemasters CEO Rod Cousens warned.
Sega’s UK MD Alan Pritchard agreed: “We have seen the loss-leading activities that Morrisons ran before, and it is not something that Sega would encourage.
“Development costs are not getting cheaper so it is important for retailers to sustain full SRP points.”
And Activision’s UK MD Andrew Brown feels other ideas should be explored instead of just slashing prices.
“We recognise the short-term pressure on retail, especially if we are on the edge of a recession,” he said. “But I believe retailers should drive growth by developing improved in-store solutions, rather than forcing the prices down.
“The overall strategy needs to be sustainable.”
Despite the warnings, several retailers have told MCV that there are more cuts to come. “We feel we’re offering great value for our customers,” explained Asda’s software buyer Andy McFie.
“More promotions are inevitable as it is a competitive market, and we have got a very strong offer for Q4.”
A GAME spokesperson added: “The UK games market is very competitive and has been for years. We remain focused on our offer and are confident in our proposition.”
Woolworths, who recently cut all chart DVDs to under £10, have also stated that it is looking at price cuts:
“We are always looking to cut prices on our games,” said a Woolies spokesperson
Price Battle: The story so far
* Woolworths cut £20 off Wii hardware bundles for a limited period
* Morrisons slashed 50 per cent off new releases like Mercenaries 2 for £24.99
* Amazon.co.uk is offering Resistance 2 on PS3 for just 29.99 if you pre-order
* Gamestation has sold new titles Infinite Undiscovery for £19.99 and LEGO Indiana Jones for £24.99
* GAME, Zavvi, Gameplay and HMV have reduced Too Human on 360 to under £20
* Star Wars: The Force Unleashed offered for just £30 from Asda – and Tesco followed suit
* De Blob on sale at Play for half price – just £17.99 on Wii
* Asda is set to offer Sonic Unleashed for £29.93 on PlayStation 3 and Xbox 360
* GAME has slashed big-name movie tie-in Wall-E to just £12.99 on Wii
Comments
Price Cuts
For those of us who were in and remember the 80's Video game boom this is becoming very familiar - Tread Carefully!!!
Re: Price Cuts
i wish someone would do something as there is room for all to make a profit and sell good quantities, there is no real need to slash prices so low, ive cut back my fifa 09 order as i know woolworths always attack this title with an aggressive price cut, it will sell anyway, no need to do this, customers do NOT buy other items as a result of the price cut they just buy this game, or they do if they have any sence,ive spoken to alot of indies and they all buy from other retails now for their stock and its a real shame, and seems to me to be a sad thing.
all devalued
to me these prices above all look like no one has any faith in the releases, im sure they are not weak releases but this is what it communicates to me, also as this trend continues me and other consumers will expect every new title to be slashed in price, i know its the credit crunch but i think this is very bad all round for everyone, good short term for customers, but who will want to invest in large studios when the return wont be there, as games a dropped in price on week 1 of release, i can understand it if you hav 100 copies still after 5-6 weeks after release but do they have to be slashed so early on??
Re: all devalued
Hmm maybe they should only supply the independents if not happy with what the chains are doing. oh know wait they dont like indies much only the big chains who are going to **** them over like they have done with everything else.
Re: Re: all devalued
@4 - Excellent suggestion, then we can watch the Competition Commission rip any publisher doing that a nice new orifice. Do not pass go.
Re: Re: Re: all devalued
Surely these prices are similar to what the rest of the world pays for Games (with the exception of our Austrailian cousins)?
Re: Re: Re: all devalued
Go the Digital Download route (and cut the bloat/FMV) and bypass ALL retailers.
It's going that way anyway - supermarket short-termism will simply accelerate that trend.
Re: Re: Re: Re: all devalued
@ Noob,
Sort of, but the thing you have to bear in mind is, with US consumers in particular, their average pay is around half ours (I'm not sure exactly, but the last time I checked about a year ago, their minimum wage was around $5 while ours was £5 ($10).
As such, their cost of living is a lot lower to compensate.
The other major thing is that they don't pay VAT at the time of purchase. They're mean to declare it in April I think. So take 17.5 per cent off of your next purchase and compare it to the price US consumers pay.
For example, let's take EA's Dead Space... In the US, it is $59.99 (£32.67) while in the UK, it is retailing at £39.99 ($74.43). Add on say 5 per cent sales tax, and the price US customers pay increases to $62.99 (£34.30).
Now bear in mind that if we take the difference in minimum wage (in dollars) US $5 and UK $10, and use that as a base to say that their cost of living is half ours, then we're getting a bloody good deal.
Re: Re: Re: Re: Re: all devalued
@5 on what grounds would they do that
competition will still be provided by the various indies that are around (plus the online indies)
the whole point is not publishers loosing money. its the value of the games. we are always treading carefully with brand new games as we know the big ones will probably beat us hands dowm.
customers will expect the indies to match those prices. (which is not possible)
Re: Re: Re: Re: Re: Re: all devalued
Videogames prices HAVE to go down.
It's a ripoff in Europe.
games are over priced
maybe if there was a lower RRP people would stick to it,
no sorry of course they wouldnt, supermarkets and chains are the worst for this, i would love to sell new games at 49.99 but if i did i would stock 1 copy of each new game and be closed within 2 months, we make £1 per new game, we only make a fair profit on used games, to cover, rent, wages, electric, business rates, water rates, and people still think we are rip offs, but we only sell games, not 2 million other items that we can make profit on, its been crap for a while and its only getting worse
Re: Re: Re: Re: Re: Re: Re: all devalued
@10
I suggest you read Brett's comment again and you will find that Europe is not as badly priced as you think. Also, go back in time to the N64 when the prices of those games were rediculous with development costs being a lot cheaper you soon realise that the games are priced pretty well.
Personally, I would love to see the publishers boycott sales to these companies, the same as they do with any brand like Levi etc. If that's what the big boys think of their stock price wise (and also quality to justify that) then they shouldn't get them and place their loyalty back into indies. It won't happen but a nice pipe dream.
Re: Re: Re: Re: Re: Re: Re: Re: all devalued
It is the shelf life that worries me. It wasn't that long ago that Too Human and Soul Calibur came out. But now it's all about Brothers in Arms, Star Wars and Spore.
There are a lot of big games coming out this year, which is great. We get a lot of people in store buying lots of games. October looks fantastic, and November 14th is going to be insane. But only a few of these games are going to sustain the full RRP. I can't expect Fallout to sell at full price all the way to Christmas. It won't. It'll do well for a week... maybe two. And then I'll have to cut the price
My picks of the games that will still sell at full price until January are FIFA, Call of Duty, Wii Music, Animal Crossing, Guitar Hero, PES and maybe LittleBigPlanet. But I can guarantee that these are the exact same titles that Play, Woolworths, Asda and Tesco are going to reduce.
These days we're either undercut by the supermarkets or the new titles only have a week or two shelf life.
Too many games.
Re: Re: Re: Re: Re: Re: Re: Re: all devalued
clearly the biggest perpetrators of price cutting are the supermarkets.
The publishers EA etc need to take a stand, and either only supply to specialists i.e Game, Gamestation & Indies or charge the supermarkets what us indies have to pay.
I doubt even the supermarkets would sell Fifa 09 for £25 if it cost £38, but as it stands they will be.
Specialists aren't the cause of Price cutting as they're actually in the business of trying to make profit from games. Supermarkets are just trying to put everyone else out of business.
Re: Re: Re: Re: Re: Re: Re: Re: Re: all devalued
I'm in total agreement that the price wars, (mostly instigated by the chains-GAME, Gamestation- and supermarkets-Tesco's, Asda etc..), will eventually lead to the decline of the retail sector altogether. The only person who is winning is the customer, not the industry and certainly not retail. Remember the crash of '83? Scoff all you like, but it will happen again if this constant price slashing and de-valuing of video games and hardware isn't stamped out.
Re: “Price Cuts”
@ Gazza well said and with the likes of the wii and the rapid closures of UK game studios its look very much like the 80's games crash but this time the hardware will pull it though even if the games stop coming
Re: Re: “Price Cuts”
Agreed but too many sku's very similar gameplay and strting to have some lack of inertia in the hardware market - And everyone sees games as a messia for profits - It will end in tears mark my words!!
Re: Re: Re: “Price Cuts”
@ Gazza
It already has ended in tears.
Software Store. Eplay. R.I.P
Re: Re: Re: Re: “Price Cuts”
@ 11 and they want to stop the selling of preowned too as they say they are losing sales. I said this is how it would happen in other threads. The supermarkets will continue to drive the price down, Indies will hardly be able to keep up and stock very little new games. The supermarkets are going to **** them over and a little while back there was someone on here banging on about how if it wasnt for him indies would die, he is god blah blah. Well mate best get a nice soft cushion cos you are going to be well and truley *******
Re: Re: Re: Re: Re: “Price Cuts”
From a publishers point of view all this is doing is accelerating digital downloads as a more viable route to market. Until this happens, with a looming recession, these lazy retailers will try and gain short-term share, which will inevitably lead to sub-standard products.
The bad news is that when the supermarkets start a price war the specialists and some general retailers have to react. Don’t get me wrong, I think the occasional price promotion is good for business as it keeps everybody on the their toes but it is now inevitable that Fifa 09, PES 09, COD5, Smackdown, GOW2 to name but a few will be slashed.
If supermarkets invested in the people at store level and stopped hiding behind distribution as well as look at how they can build a range then there might not be a need to slash prices?
Re: Re: Re: Re: Re: Re: “Price Cuts”
quite simply there is only one solution do not sell your products to those retailers who are de-valueing your hard work. There are still enough Indies out there who can sell collectively the same amount as supermarkets and the High Street. Grow some BALLS !!! and say No to discounting
very true
suppliers and publishers take note !!! i dont care about all the bs and hype surrounding a game, the simple answer to why im not stocking 50 copies of fifa 09 , pro evo 09 etc is everyone else will slash the price to below our cost price, its very simple, if this was stamped out we could all make some money and the industry would grow and feel more stable, it doesnt matter to supermarkets as they move onto new products to stock and price cut, like insurances, TVs, dvds etc etc, the publishers really need to look at the source problem here- supermarkets, as itch says everyone has to react to price cuts, even if they dont match it or you will be stuck with stock, there is no need to sell new titles so low, its now getting embarasing when reps call me as my numbers are so low for triple A game titles, truth is i may as well get it cheaper and clear out my local competition, is this really how suppliers and publishers want us do business ?maybe they dont care, this will speed up the download market, and kill boxed product.
Re: very true
And therin lies the problem. The publishers are whinging about supermarkets etc devaluing their product but won't take any steps, like not supplying them with the product unless they argree to a price point, to counter the situation. Again it's a case of the publishers wanting their cake and eat it.
Message to publishers: Either take steps, or belt up.
Re: Re: very true
it would be great if someone actually stood up to the supermarkets, if a price point could be agreed and even if they were not allowed to go below this price for say 3 weeks it would make a huge difference to us all, if supermarkets said no we will pull our orders which they wouldnt, other specialist stores would order more as they would be the only place to get the games from, if the publishers are moaning they should do something positive about it, as this has been going on for a few years now
Re: Re: Re: very true
I think what a lot of you are missing is that the supermarkets pay wholesale rates on the games. If I remember right, a publisher makes between £16-20 per title. The reason why they can sell cheaper than specialists and – most importantly – distributors, is because often, the supermarkets buy at least the same amount of titles as the distributors themselves, meaning they get the same discount, or higher, cutting out the middle man in the process; in other words, what the indies could sell them at if the disties weren't there to take their cut.
And before you try and correct me, I know Tesco use Handleman and Asda and co use EUK, but they aren't being distributors in the traditional sense; they're simply facilitating the deals between the publishers and the supermarkets.
The simple fact is that calls by publishers to 'stop the price wars' are nothing more than a PR exercise by the themselves to avoid irritating the specialist chains.
Do the publishers really need you? Think about it? How many towns have their own DVD or music store (with the exception of HMV and Virgin), be it an indie or specialist chain?
Exactly. This price war won't kill off games; it'll just kill the indies and specialists.
Re: Re: Re: very true
Things will only change when Publishers see a decline in sales of the products and Supermarkets dictating to them what price they pay & what price they sell it for
Find a lawyer
@ 5,12,14,21, etc
It is "unlawful for a supplier on grounds other than permitted grounds ... to agree or to threaten to withhold, supplies of any specified goods from any dealer who requests supply of those goods"
That's why Nintendo got fined E149m.
That's why suppliers cannot do anything, regardless of whether they want to or not.
Read a book or something.
Re: Find a lawyer
@27
It is indeed the case that it is 'unlawful' but in many peoples opinion it is the sensible opition.
Looking for a similar situation in a different industry, look at football shirts - ever see them for £25 in a supermarket.
Read the web or something.
Re: Re: Find a lawyer
bobs right, there are ways round it but Publishers are looking at short term and not long term.
Said before that we advised a large chain when they went direct to a manufacturer for their products. In the end the manufacturer had no-one else they would sell too and thats when they got shafted, the price went through the floor as basically the chain ended up calling the shots.
Yeah go download route, think people will be happy paying 16 quid or whatever to download a game to sit on hard drive. What you expect them to pay for a disc too to make a backup copy or wont you allow that? Wonder where the customer will go........Usenet, Torrent?
Greed by some is going to cause the problems, you are cutting out the wrong people but you are to stupid to see it.
Re: Re: Re: Find a lawyer
While you're correct, Ken, it's a piece of legislation that needs to readressed as these constant price wars is doing nothing to help the industry, quite the opposite. You're snide remark 'read a book or something' only serves to highlight you're own ignorance of the situation and it's obvious conclusion.
Re: Re: Re: Re: Find a lawyer
R.I.P. Indie stores.
Re: Re: Re: Re: Re: Find a lawyer
Best thing Indies can do is buy the stock up from the Supermarkets, play them at their own game, grab as much as possible and resell. Wont that hurt publishers more? Kind of like the selling of preowned games.
Re: Re: Re: Re: Re: Re: Find a lawyer
http://www.mcvuk.c...ptcha
i think its about time some of you indies dissapeared it can only be good for the consumer that the prices are coming down and the supermaekets have got in on the games act!
the discounted releases are only for a short time only and people are sick of being overcharged for sechond hand games too, sme being 1 or 2 pounds less than new sometimes more than new
good riddannce to the rip off merchants making a living off kids
bring on the price wars......
@ 33
you obviously know nothing about business here, indies dont want to rip people off at all, they want to make an honest living thats it,
i dont mind selling the games at a low price, so long as we can make some profit, your missing the point, we dont rip off kids, supermarkets are selling at our cost price you idiot, they have 2 million other items to rip YOU off with, we only have games as we are specialists, we sell used games at alot lower than game,gamestation and we sell new games lower than these, last week they are still selling cod 4 49.99 new and 45 used !! we dont sell anywhere near this price, they sell used consoles for £5 less than new !! this is a rip off, but dont just pigeon hole everyone, thats very ignorant, there is room for all to make a fair profit, but selling at cost is stopping us doing this, we can not match this without going out of business, so we are forced to buy stock from supermarkets and add 4quid on to the price, its just survial for us now, we dont enjoy trading like this but we have no choice at all, supermarkets are actually selling cheaper than we buy from dist , can you not understand that?
i gave up long ago
its a waste of time posting here, publishers are arrogant, they dont care for indies, this is why for the past 4 years ive been selling import titles months before release, its the only way i can stay open,sellin games that the supermarkets and chains dont have, then they get traded in and sell for cheaper than the new price when they release in the UK ,you cant expect publishers to do a thing about supermarkets, the govenment wont even act against them, they are too big now,and sell so many items
Re: i gave up long ago
Frankly, if your maths is a bad as your english I'm surprised you've lasted this long.
Re: Re: i gave up long ago
what a pointless post, i type fast as im passionate about the subject, replys like this are a waste of space, if this is all you can say to engadge me, why bother at all,
2 points to make here
1)Making a profit is not ripping someone else. Why is making a fair profit now deemed to be ripping someone off?
2)Supermarkets might be the cheap place to go for now, but they are bad for the long term health of the industry. They are going to 'pump and dump' with video games. As soon as something else comes along they'll move on leaving you with most of the publishers out of business cos they never actually made any profit
Re: 2 points to make here
@33 - I don't think that indies rip people off...believe me i used to work in the industry and most of the new releases you were lucky to make 50p.
I think that something should be done to stop the supermarkets price cutting this much as I support local/independent stores and i think it would be a shame to see them go...can you imagine walking up a high street and seeing only TESCO? Because that's the way it's going...
Important Pricing
What supermarkets are doing now is catering for families. Not everyone wants to pay £39.99 for a game, if a supermarket wants to charge £29.71 for a game thats worth £39.99 everywhere else - then thats their choice!
I mean, not only do supermarkets want you to stay in store and never go to any other shop - they don't want you to go online either. And with large warehouses and bulk prices - a supermarket is an ideal place to make a price change.
The rest of the gamers go to the indie stores, and they go to game and gamestation. Why do they go there? its because of service.
A shop will define itself through customer service, how many staff do you ask in a supermarket if this product is worth buying? The differences to the market now is that people will pay more for more. Games with special edition tins and things like that - people genuinely do want to pay a bit more to get a bit more.
With indie stores, game and gamestation - most of the time you talk to staff there about games - which is what customers rarely do in supermarkets. Whereas a customer in a supermarket feels they are getting a good price- a customer going to an indie or big game store will feel they are getting good service.
I know from personal experience that customers do buy games from you because of the shopping experience more than just the price. So probably to combat the price-wars, I suppose the way forwards isn't a fire with fire approach trying to sell things for the cheapest price. But trying to make the customer feel that their money (however expensive or cheap) was well spent.
Re: Important Pricing
@35, which supplier do you use for imports, as iv struggled to find anyone in the UK?
My only option so far has been buying single units from US/JAP based websites
Re: Re: Important Pricing
Europe games prices are already rediculously more expensive than the rest of the world, so i'm all for price cuts. Why can america buy new games for $45 when i have to pay nearly double that for mine? surely if publishers sold to ALL retailers at the same price then they don't lose money? (don't do buisness or anything) But surely if i sell my games to stores for £20, no matter what to all stores then whatever money they cut from it, they lose as profit, not me? Or am i missing something?
In any case i'm fed up of being over charged for the games i buy when others are getting them abroad for dirt cheap. I've had to import games before because it was rediculously cheaper, or the game wasn't out in england. I also never go to GAME or anything because i actually know info about games, when i go into a store or shop online i already know what i want, i don't care about GAME's opinions on games, i know what i want, hence all that matters is the price. Which i buy all online anyway.
Re: Re: Re: Important Pricing
@ james, ebay is usually your best bet. They usually mark is as 'gift' so you don't pay tax too. And withpaypal its all nice and secure.
Re: Re: Re: Re: Important Pricing
@ Bretty Stocks
minimum wage there is around $7, so your math sucks. and £1 =/= $2
55p to a dollar now or something, haven't worked it out but your numbers will be way out.
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