Prices of PC-Games, discussion.

[SLAVE|Mietz]

Ok, so there was this discussion exploding on irc if games should cost 50€/$ or less, and if its morally OK to do so.

Lava was so excited he wouldn't stop talking and let me explain my point of view, so I make a forum post out of it.

Lava's idea is to meassure the price of a game by price divided by "hours of fun".

So if a game costs 50€ and you have 100h of fun, you just pay 0,50cent / hour.

Ok, so thats his point of view, now mine:

I measure the price and if it is "apropriate" by doing a marketing quickcheck (simple mathematics as Lava told me )

Doom3 sold 1 million copies on retail (and they didnt stop selling till today)

(from: http://www.shacknews.com/finger/?fid=toddh@idsoftware.com)

Doom3 was about 10 million $ in development (like any "average" game today)

Lets put another 5 million $ into marketing and adds

Then lets add some money for production:

http://www.idnonline.de/site2005/leistungen/dvdpressung.html

you can get 1000 DVDs printed for 1373,44€, so you get 1373440 € for 1 million copies (lets simplyfy 1€=1$)

So in the end we have a summ of 16,3744 million USD

Selling a copy for 50€ at retail is a revenue of 50 million USD

so substracting you get 33.625.600 USD

Ok, lets say you would have to pay all the workers in all the cities distributing this game (shipping, advertisment, hiring students to put those boxes into the shelves), so lets substract another 5 millions from that.

this gives us: 28.625.600 USD what the company had as pure gain after retail!

Ok, in marketing we have something called "marge" it indicates a value in % how much you get in the end.
Its calculated by dividing the prod.-costs by the revenue you get.

so we divide 21.374.400 by 50.000.000 and get 0,427488

That tells us the company has 42,74% gain on EVERY copy they sold on retail.

To provide you an example, a company that sells sausages has a gain of 10%

My dad (Senior Project Engineer at Schneider Electrics) told me that his company has a gain of 15% and in average 20% are considered very high.

so tell me how does 42% marge sound to you, for me it sounds like a SHITLOAD of money!

And my point is that we are getting company-raped by this prices.

Discuss!

[Lava Croft]

The price of a product does not depend on the profits made, but on the production value of the product. In essence, what you say sounds nice, but is nonsense. Maybe in a Utopian world it would work like this, but then again, in a Utopian world games would be free. You know what I mean when I say I'll leave it at that ;-)

[Neo]

The main problem is the price hike that occurs at the retail level. This is evidenced by online retailers who can sell a game at £17.99, as it will sell well and they still make money.

Considering the average retail price is £29.99-£34.99, that is a huge amount the retailer adds on per copy.