The arrival of summer has again brought with it a period of furious price cutting – with Amazon.co.uk offering a range of chart titles at huge reductions, some as low as £3.96.
In the same week that the new Coldplay album, X&Y, was being offered by supermarkets at a heavily discounted price, non-specialists were also threatening the games sector.
With temperatures rising, Amazon’s latest initiative has been met with alarm by publishers and rival retailers alike. As part of its ‘Hot PC & Video Games’ listing, big-name titles are being offered at a fraction of their RRP (see box).
And many, still holding a £39.99 RRP, plunged to under £10, with Sony’s Killzone on PS2 retailing for £7.96, while Sega’s Headhunter: Redemption plummeted to £3.96.
A spokesperson for Amazon told MCV: “We are committed to lowering prices for our customers across all our categories. The two key strategies for our business are the dramatic expansion in the range of products we sell and our relentless focus on lowering prices for customers.”
However, rattled specialists, unable to compete, moved to cast doubt on the sense behind such a move. “I think retailers like Amazon are just preaching to the converted, talking to customers they talk to all the time,” offered HMV’s Gennaro Castaldo.
“Specialists like ourselves always put price as just one element in the overall offer and we seek to add value in many differeny ways.”
In light of the parallel discounting of the Coldplay album, some are concerned that non-specialists are tarring games with the same strategic brush. “If you think you can treat games the same as DVDs and music you’ve got another thing coming,” blasted one UK publisher boss. “The reality is, games cost too much to make.”
But a deeper fear relates to consumer expectations. “It sends out negative messages about the value of a game and whether customers feel they’ve had good value in the past,” asserts Castaldo. “It’s very dangerous.”
Industry analyst Nick Parker, of Parker Consulting, agreed. “It’s quite alarming as it destabilises the market. It sets a cut-price basement trend which consumers will start to expect. If that then filters through into the High Street, then it will impact on publishers’ margins.”