Playing the price drop waiting game - Warbuff Blog -
Switch Lights

The lights are on

What's Happening

Playing the price drop waiting game

The value of game software, yet another subjective aspect of the gaming culture that is tough to understand. " the value of any good or service simply being whatever someone would trade for it in the present"; meaning the worth of a game is unique to each individual. Back in January 2010 I was not going to drop $60 on Mass Effect 2. By November that same year I was able to purchase a new copy of ME2 for a third of its original value.

I could hardly believe it at the time. Almost every month since then I've been amazed at how quickly some games are dropping in price. Both Portal 2 and Mortal Kombat surprised gamers when they dropped in price by $20 only 2 weeks after release. Portal 2 remains $40 while MK is $60 at some retailers. Driver San Fransisco, which released Sep 1st in Europe, dropped to $30 for a new copy by Thanksgiving. I suspected poor sales were behind the price drop but on November 8th Ubisoft stated sales were, "above Ubisoft's expectations".

If sales are strong and reviews are positive, why are many games dropping in value so soon after release?

Do game prices drop when sales are strong and publishers can afford to?

With monikers such as Platinum and Greatest Hits being applied to some titles when prices drop, we are led to believe the cream of the crop is available to late adopters at a reduced price. But this isn't always the case. If we investigate the trend further, more often than not the best selling games take the longest to come down in price. The perfect example would be the best selling franchise in history. Its been over 4 years since the first Modern Warfare was released and over 13 millions copies were sold by mid 2009. Today MW1 will set you back $30 new and that doesn't include the multiplayer DLC on disc or as a download code; requiring an extra $10 for the complete experience.

How about when sales are poor?

Most definitely. This is the reason I usually suspect is behind a newer game dropping in price. 5 minutes on any gaming news site will reveal users that openly admit to waiting for a price drop before picking up a particular game; they know it will happen eventually. The sooner a product's price point is dropped, the sooner consumers that are on the fence will pick up a copy. At least this is how Nintendo feels about their hardware.

Do prices drop to assuage piracy and used sales?

While there isn't information available to concretely answer this question, it seems the most plausible to me. Compare new and used prices of games at Game Stop. Generally the price of a used title is between 5 and 10 dollars cheaper than a new copy. If a publisher lowers the price of a new copy, second hand retailers are forced to also lower the price on pre-owned inventory. This may help entice a customer looking for a used copy to buy new instead. There is also the added benefit to publishers in reducing the profit a store like Game Stop will make re-selling their product.

"Good things come to those who wait." That's the message I'm getting from the industry. When we're interested in new software but not enough to spend full retail, we need only wait for the price to go down. Sometimes the wait is longer than others. But its possible the trend of price slashing closer to release could become the norm. While this sounds like it would be a bright future for our wallets I fear that publisher's will find more devious ways to make up the cash they lose from dropping prices.