Comment by beloch | Hacker News Reader

Comment by beloch | Hacker News Reader

The engineer bases his argument on an assumption that is usually erroneous:

The price of a product is related to its cost.

This is a logical assumption, but almost always false. It is far more commonly true that the price of a product is dictated by what consumers are willing to pay. If the PS4 version of game X sells for $59.99, it is more than likely that the Xbox1 version will sell for the same price, because people will perceive both versions as having the same value and be willing to pay the same amount for them both.

What Valve does with Steam prices is something different. New releases still cost roughly the same as traditional DVD copies bought in stores. Bargains start to appear on titles once they reach an age where a lot of stores stop stocking them. It is true you can get heavily discounted games on Steam, but this is totally unrelated to the lack of a used-game market. Somebody simply realized that a) A title nobody is selling makes no money and b) gamers will spend money they wouldn't have otherwise if they think they're getting a deal. Put a and b together and you have a recipe for profit. This also eliminates demand for used games. Why buy a skeezy dog-chewed box when you can get a steam-download for the same price or lower?

Don't get me wrong. If MS builds a curated steam-style store for the Xbox it will undoubtedly be a great thing for many (although not all) gamers. However, lower prices on new titles will not be one of the benefits this move brings. This is really just a grab for dollars that currently go to the used market, and it will likely work.

Thing is that here in europe/sweden steam is always the most expensive choice sine must publishers equals 1 usd to 1 eur. So here the only sane reason is to wait until they have sales since then it is just expensive and not overly expensive.

//Anders

That's because 1 USD plus VAT pretty much 3 equals 1 EUR. USA has sales tax which is not added to the price, it only shows up on the receipt.

also, median sales tax in the US is around 9.5% (all-inclusive)

Still more expensive than to pop down to game stop and buy a new one.

"people will perceive both versions as having the same value and be willing to pay the same amount for them both."

If they can resell one game but not the other, they're not necessarily going to perceive them as being of the same value. If they use the money they get from reselling the PS4 game to buy more games, they're not only not going to be willing to pay the same for both, they won't be able (except for the segment of the population that is able to increase its total spending on games).

It's hard to make a comparison with Steam, because there is pretty much no used market for PC games, so necessarily the economics are going to be different.

I wonder if Microsoft's far reaching agreements with publishers are going to see XBox One games come out at $49.99 instead of $59.99. I normally buy 5-10 games a year, so a $10 difference could easily make me tilt slightly more towards the One. Really the only thing that irks me is the phoning home daily thing. My internet has been down for more than a day at least twice in the past year, and I filled my time with console gaming rather than Steam or other services.

Very good points. The ability for publishers to discount games on steam where they otherwise couldn't in physical retail markets is that they have just one place to set that price and distribute it.

MS by eliminating the used game market forces consumers to buy these older games in digital form where publishers can offer these sales. I don't know if that will make them any cheaper than if someone simply bought a used game from ebay. It certainly won't affect the price of new games.

What bothers me is the notion that these digital purchases could go away at the end of the XBox1 generation. Consoles notoriously aren't backwards compatible friendly. I'm fine with buying PC games digitally on steam as I know they'll work as long as whatever Windows version I have is still around. And I would wager Windows 7 will be supported much longer than the XBox1 will be the current generation.

I find it similarly mind boggling that owning the discs for PS2 or PS3 games would not entitle me to the digital version for a PS4 (offering previous gen games as downloads was offered I believe?)

  | the price of a product is dictated by what
  | consumers are willing to pay

The value is dictated by consumers, but anyone can set the price unreasonably high, and sit around wondering why no one is buying.

The value of games on steam is very related to the used game market because there is no used game market on steam, but users still buy old games at used market prices. The difference now is that the money continues to flow to the publisher and not entities with no hand in creating the game.

It's essentially a long running dutch auction that goes on forever.

Reply on news.ycombinator.com