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Comment by jiggy2011 | Hacker News Reader

jiggy2011

He seems to be suggesting that Xbox One games will be cheaper because of the lack of used sales. I don't see what their economic incentive would be to lower the prices (at least to below prices for a similar PS4 game), usually if there is less competition in a market and demand stays constant the price goes up.

In the case of Steam , they have to be cheap because their competition is TPB which is the cheapest game store out there.

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A copy of a game is "inherently" less valuable if it cannot be resold by a consumer (many gamers buy games at $60 only because they know they can resell them once they are done with them). Therefore demand at a given price level would go down under a system where games are locked to a user.

Perhaps, this may be more the case for games with small amounts of content or mediocre reviews. I don't see significantly less people being willing to buy COD or whatever for $60 if they can't resell. Unless they move to PS4 at least.

You're right, but that could just mean that COD is priced too low even under the current system (where games are always $60 max not including DLC etc).

Or the effort spent to resell is valued more than the resale value of the game (whether it is true or not) or it's because COD has a higher resale value.

Although I'd guess that people's gaming budget isn't as simple as X number of games @ $Y max each and so-called blockbuster titles could easily start charging more without losing too much of their fan bases.

They could go for a bigger % cut of gamers disposable income, the same way smartphones have done for the cellphone market.

Videogames are also somewhat addictive, so the supply curve might look more like tobacco or alcohol.

About DLC, those can't be resold, plus they're useless if you don't have the original game any more. So they are kind of a lock-in tool. Which is, by the way, why I abhor them.

Right now, used games capture the low end of the market. If there are no used games, then there's nothing servicing the low end, and that's a lot of wasted money. If game prices come down a bit, you capture more of the low end, which makes up for the lost revenue on the high end. The trick is figuring out the price point that gets you the most revenue.

The typical way this is done is to sell at a high price initially and when sales drop start lowering the price. Or put a game on offer just before the sequal is released to drive sales for the new game.

Used console games typically sell for $5 less than new games. They're not servicing the low end of the market.

In the first week, sure. But as time goes on, used game prices drop much faster than new game prices.

They'll make the same money, if not more, charging $40 for the game downloaded via xbla than they will for charging $60 at retail. Retail stores are incredibly expensive compared to web anything and so they take a huge cut.

MS' long-term plans probably involve cutting the publishing middleman out of their dev relationships.

I don't think digital goods / things that are very cheap on the margin really subscribe to the same laws of supply and demand.

For example, most people would probably agree piracy drives the price of photoshop up for the people that actually pay for it. In the eyes of supply and demand though what should happen is more piracy == less demand for legal copies -> lower prices.

That doesn't have much to do with supply/demand not applying to digital/low variable cost goods; the same phenomenon can be seen in, e.g., clothing. The concept that theft of clothing pushes up prices is pretty much as agreed upon as your example, but has nothing to do with the marginal cost of production.

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