2K exec critical of UK retail price slashing

by Alexander Sliwinski on Dec 30th 2008 10:30PM

2K Games Global President Christoph Hartmann warns UK games retailers that they're making the same mistakes as music stores did in the region. He feels that retailers slash prices too quickly, many times on month-old software, to make room for new inventory. This is fairly different from the US, where the release price of games can stick (barring bombs or special sales) for a long period of time.

Granted, game prices in the UK start high (around $100) at release, but dropping prices shortly afterward trains the patient customer to get a better deal very soon. In contrast, notice how "used" prices in the US aren't that much better than new, which teaches consumers that the release price is what they should expect for a while.

Hartmann believes that by focusing on the short-term and the latest blockbuster, UK companies are too quickly slashing prices on older games. In the end, Hartmann's words sound like a passive attack on UK used game sales, which would make sense, because no money from those purchases goes into the publishers' pockets.

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Tags: price-cut, price-drop, price-drops, uk

Reader Comments (61)

LOL, this is great for gamers at the moment in the UK, a game launches and its about £40 then a week later the price has dropped to £25,

and also Oh no! 2K will only make 1 billion profit now instead of 2 billion how ever will they live?

Retail doesn't quite work like that. Stores get their stock from suppliers and wholesalers, which is bought in bulk at a lower price per item. Stores then take this stock, mark it up to gain profit and sell it to the consumer. Wholesalers get their stock from publishers and this is where the money gets back to the people who made the game.

2K isn't worried that their profits would fall, well, they are, but it's not an immediate problem as you think. 2K is saying that cutting prices too quickly leads to people not buying games on release, which can make a game look poor on first-week sale figures and then shops have a lower cut of the profit than they would usually.
The lower profit gained from game sales make the prospect of doing business in that area look less inciting to prospective retailers still pondering if they should move into the highly competitive market. 2K would be happier if more retailers did, as it increases the circulation of games, meaning more demand and more units made to meet that demand. More units, each still sold at the same unit price equals more profit for them. It's a very slow, rippling effect...

Is it really $100?

Remember, we have RRP (reccomended retail price) here but unlike America they're not closely followed.

This generation, console games generally are introduced at £40 (which equals just under $60 now, although exchange rates have been going mental recently), although they drop down depending on sales and stock. For instance, I picked up LBP and Motorstorm 2 off amazon for £20 each a couple of days ago.

Also I should point out our used game market is nowhere near as insane as the US's. Our main chain here is GAME, who are owned by your EB Games - while they do used games, they try and sell you new games more often than not.

I was going to say myself....rrp for 360 games seems to be about £45 and £50 for PS3 games, but there's very few stores that sell them for that much. WHSmith has always been a rip off. Last time I went in they had CoD4 for £45 still! Tescos always seems to be dead cheap though.

GAME isn't owned by EB. EB failed in the UK, and GAME bought all their UK stores out a few years back.

Ah ok

Gamestop in the US bought EB Games anyway. They basically have a monopoly on the used game market.

ebgames.com
gamestop.com

I prefer the colors on the first, but they are identical :P

A 360 game's RRP is usually £40-£50 (£50 usually in overpriced non-game specialists), then you can usually find the game for around £30-35 on release, and just for this Autumn/Winter retailers have regularly been slashing prices down to the £20-25 price point. But I'm not complaining, Fable 2 and Fallout 3 for £20 each =)

I see the price drop significantly on games within a few weeks of release here. How is it not that different from the MSRP? I'm savvy enough to use eBay to my advantage. I picked up a new copy of LBP for $40 within two weeks of release and Fable II for $42.50 within a month.

I've learnt to try Asda (or Tesco - though no Tesco in local large town so if I'm in Tesco, it's rarer) for games and if they have the game, get it, as it'll always be at least £5 cheaper for a new game than GAME is, and some GAME preowned games aren't much cheaper than the new games.

Also, Tesco and to some extent ASDA are known for sometimes putting games on shelves before the release date :-)

In speaking of good deals at supermarkets i got Fallout 3 for £25 from Sainsburys on the day of release, was well pleased.

I agree with this wholeheartedly.

All within a month of their releases I have seen Fable 2, Fallout 3 and Prince of Persia all cut to half price. Sounds great but it will be unsustainable. I *was* quite happy to hand over my £35 - £45 quid for these games on release day, but if it becomes common practice to knock them down to half price weeks after their release then I'm certainly not going to be doing that anymore.

If I'm not willing to do it, I imagine there will be a lot of the 'hardcore'/first week sales not willing to do it either. At the end of the day everybody loses out.

Here's a radical proposition: why don't publishers and retailers agree a sensible price from the start. Instead of the ridiculous RRP followed by an equally ridiculous quick price cut find some sort of middle ground perhaps. Most that I know think the RRP is too high, but even lowering it to £30 seems to get it below the appropriate psychological barrier.

Exactly. I play my PS3 quite a bit, but I only buy budget titles for it. Why should I pay £40 for a new game when I could get the same thing on PC for £25?

There are some exceptions to this though - I'll always buy Rock Band games full price.

I got to say, I'm happy I'm an American Gamer.

Why? This article says if you're willing to wait a few weeks, you can get a good deal on games in the UK, while Gamestop will happily bend you over for scratched, second hand tat?

*Waves his sealed copy of "Nuts and Bolts" (which was really good as it turned out) for £15.*

Again, don't use the exchange rate as a guide. The pound is being kept week by the Bank of England to encourage exports. That's their story anyway.

Nuts and Bolts sucks, I couldn't even stand playing the demo for more then ten minutes.

Wow, thanks for your deep insight of a whole ten minutes worth of a rather weak demo.

By "thanks" I mean "shut the fuck up with your worthless posts and go back to playing Halo"

Stop failing Poisoned Al.

Nah, I think you're in the red this time Wiinterfang. As I posted above, a new console game here costs £40, which equals out at $57, and as the article says they get reduced to like £20 or £15, so thats $28 or $21 respectively.

In other words he's not a happy American gamer, unless he only buys the utmost latest releases?

Don't waste your time Haggard. I have a feeling our friend Wiinterfang here gets all his "information" from Fox News.

TBH, I'm glad you are as well Wiinterfang :D

This kind of thinking is why I don't like publishers but still have to except them as a necessary evil.

Hey Christoph, check it out! I'm playing the world's smallest violin!

If you want to have your games keep their price, make it so people want to hold onto them. DLC if always a winner and so is good online play.

The price of "beat in a week" titles will always drop like stones when they all get traded in.

Hurry up and drop ur prices, Valkyria Chronicles and Tales of Vesperia!

Both £20 in Game.

holy moly, Valkyria Chronicles is cheap at Game.co.uk. Thanks for the tip! Does anyone know if PAL PS3 games play fine on NTSC PS3s??? I know it plays Japanese games fine but not sure about UK games.

I forgot to say that I would be playing in 720p on HDTV. Is 720p NTSC the same as 720p PAL??

PAL and NTSC don't work together.

720p is the same everywhere, europe has a different standard for broadcast tv but that doesn't matter.

So if I get a PS3 UK game, will it be fine on my US PS3 if I play it in 720p?

I'm not sure, but Sony have a habit of being dicks when it comes to region locking, so I wouldn't bet on it.

Games aren't region locked on PS3, only blu-ray, so if you felt the need to get it over here, go right ahead, should work fine :S

Just don't get DLC for your imported games. My US LBP doesn't like UK or Japan downloaded costumes

Sony. Giving with one hand, taking with another.

Why can't they just make 1 device that works 100% region free. Oh. It's called the DS (NOT DSi, bastards).

The biggest reason that the stores have to cut prices so quickly is because of the competition. Retail is being flanked on all sides by various cheap internet firms who can offer a better deal quite quickly. Retail has to compete, so it slashes prices similarly in order to try and keep business going.

Basically, what he wants is price fixing. Which is illegal.

I'm all for a good deal on an unused game. I'm not an expert on the retail biz but I'm pretty sure 2k gets paid up front. So, if a store slashes the price on a new game, doesn't the the store bite the bullet? When I lived in Germany I would buy the region free versions of games if they were cheap.

Haven't they been doing this with computer games for years now? Why should console games be different?

This holiday season has been particularly insane.
In the past two weeks i've picked up Fallout 3 (collectors tin edition), Farcry, Prince of Persia, Motorstorm 2, Tomb Raider Underworld and Valkyria Chronicles............... all for £20 each!!!

Absolutely crazy, i don't know how anyone can make money doing this, and i've never seen it before, even in the PS2 generation.

I think he's just a little peeved by the rows and rows of GTA4 that hit the preowned shelf just weeks after the game was released. That's the inevitable consequence of scaling back what made the game fun in the previous iterations. Compelling games don't get sold back in droves. A trickle, maybe.

Is Brawl online fixed, really? Do you still play Kart online at all? I still throw it in once in a blue moon...

If Brawl online is fixed, I'll get online and ruin you :)

Yeah, I mostly play Mario Kart on Sundays. So you can catch me then. I'm, like, the best in the world now. Trust me.

As for Brawl, well that's still broken. I can only get a good connection with people in London or Paris, but not somewhere like Birmingham? And forget about that random matchmaking. I'll give you my Brawl code anyway when I find the time to do so.

Happy New Year, pretty people.

How about a fair starting price for a change? And this applies for all the euro region.

Oh please piss off 2K exec. When I'm in England or Scotland I hold off any game purchases until I'm in cheaper waters. I can't imagine always paying this much for games.

So thats it really. STFU 2K. Stop trying to get extra moneys from elsewhere just because they're not the US. Cuz the priceys are also monstrous in Aussie but we all know that.

I always check out GameStation first, nowadays even before eBay. The other day I saw GoW2 being sold for cheaper brand new than pre-owned.

That's besides the point though.

We over hither already pay more for the same thing than the U.S. so why is it a huge deal if we wait until we can pay something more inline with what you're paying?

Dude, you need to play me at Brawl.

I couldn't have possibly said it better.

+1

I don't know if I've been living under a rock for the last six months but I've only seen these price drops in the last month or 2. I work in a cex store directly opposite a gamestation and it was only end of november at the earliest that we noticed fable and fallout posters for 25 squids and trade ins of said games rising exponentially :-/

I'm putting it down to xmas rush, the huge price drops have slowed even now so I doubt many new games will be in this situation come mid 2009...

The deals are fantastic at the moment. Except of course on Steam where some prices are literally double what you find on the high street. I bought Fallout 3 for half of what Steam would have me pay. The service has turned from being a competitive to an expensive load of crap. Even Valve's own Left 4 Dead is cheaper in stores. They should sort their prices out.

Wait... Steam is charging you double for Fallout 3. So that means shops are selling Fallout 3 for............................. £11?

And to break it to you roughly L4D was the same price in stores as Steam - £26. No giving no taking, except a few stores who want to charge £30+. And even now its only £20. It's not £20 in any store right now. Even during the store sales it hasn't dropped.

It's like you don't even go on Steam.
Case in point. I just bought 5 new AAA titles on Steam for £55 and in town this morning it would have cost £87.

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2K exec critical of UK retail price slashing

Reader Comments (61)

Posted: Dec 30th 2008 10:42PM (Unverified) said

Posted: Dec 31st 2008 8:36AM SSUK said

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