Okay, yeah...That sucks!

I pay $40-45 dollars for most PC games now and I remember a time when it was $60.

Anyway, the first thing that web sites did, web sites that I visit at least, was to dis the movement, call it illogical and full of holes. I almost didn't read the actual site because of the remarkable text-form peer pressure.

And the point of the Fairplay website, is very very simple. Too simple for some maybe. And the point is this:
 

If game prices were to drop in half, people would 
buy twice as many games.

As far as I'm concerned, this logic is infallible given some conditions.
 

1. Game prices change instantly, within a day. People that were going to spend $40-50 USD on games will most likely still be resigned to spend $40-50 on games, so they would buy two games to fulfill that self-impigned obligation.

2. Game companies don't mind if other games get bought, besides their own.

Ah, and there is the rub, and it illustrates the reason why game companies might not want to adopt a half-price/double sales policy. Let me illustrate this point clearly to you.

If Blizzard sold 1 million games at $40 wholesale each, will they really sell 2 million games at $20. What happens if 1 million people buy 1 million OTHER $20 games? Blizzard makes half as much then. 

How many millions of new people will be jumping into the game-buying habit just because of low prices?

I can imagine Blizzard/Vivendi people poo-pooing this Fairplay idea with much gusto and acid words.

However, if Blizzard rewarded customers for "brand-loyalty", with a buy one-get-one-free Blizzard deal, then they'd get all $40. With that, sales numbers for their games go up, hopefully, and popularity and word of mouth spread, and surely, an additional percentage of game sales come rolling in, because people who save money can't stop talking about the great value...

...

The #1 fault with the Fairplay campaign is that publishers don't think of themselves as a family, as a single-bodied industry. For companies like Blizzard or EA, one that brings in top-sales numbers already... halving the price is not likely to produce a double-demand for their product.

The #1 benefit of the Fairplay campaign is that some small publishers, which don't sell enough copies of their game to earn back expenses and make a profit, should have a better chance at increasing sales. That chance still isn't large enough to insure success, but if double the amount of games were sold... well, some portion of that number might include their games.

People are going to buy from many different publishers and ultimately thin the profits for individual publishers as more publishers increase their sales.

The problem with the Fairplay campaign is that it only loosely targets greedy companies -- publishers and retailers alike. While the Fairplay call-to-action asks that you don't buy any games for a week starting December 1st, doing so will not only harm greedy high-priced companies, but also the few sensibly-priced companies that already sell their games at half-price. (If Britain has no so-called budget-priced games, then my pity goes out to all who suffer high prices)

I say go ahead and buy the $20 USD games, and the low-priced GBA games, and the used games for consoles that are around $20-25. Send THAT message to the greedy publishers, a message that says, "I don't want to pay for your inneffective budgetting, your superstar lifestyle and/or your high licensing fees." Also, send the same message to Sony, Microsoft and Nintendo... that you want lower license fees on games so 3rd party publishers can lower their prices too!

Then again, greed is a subjective thing. "Greedy" may be wanting more money than it took to create the game and distribute it. "Greedy" may be more than a certain attractive dollar amount to someone else. Unfortuneatly for consumers, some game publishers like having millions of dollars of profit. After that, what the company does with that money can be percieved as good or bad. Either they can keep it for themselves or they can use it to fund game makers in their next project. If that project does well, then the investment has paid off - in the creation of a successful franchise perhaps.

Right now, with certain publishers, the ones that fund promising game ventures, cutting the cost of games would be bad for developers who can't put their own money into game development.

Videogame publishers already lower their prices over time and even offer combo packs of games at deep discount prices. They offer these deals when they see the game losing profitability at the current price, when the shelf-life of the game has all but ended.

"The SIMS" has only just recently been offered in a combo pack because EA is very, very happy with the success of the game and how people don't stop buying it for $40 retail and the expansion packs for $30 retail. EA has never needed to lower the price to stimulate sales, until now that is. (I think it slowed a percent or two...) "The SIMS" has definitly pulled in more money that it took to develop the game and the expansion packs, many times over. Is this greed, and ripping off the consumer now?

Is it greed if EA is putting that 240-300 million profit to proper use? Are we going to see 24 "million-dollar-budget" games being developed in the next few years? 23 games? 10 games at a million a piece? Will EA mind if they lose money on games that are great, but flop for some reason?

If you want a consumer-driven price market, then you need to get consumers to buy games based on price, and not on content, even if the content deserves the high price.

Epic and Digital Extremes deserve $30 wholesale dollars right now for Unreal: Tournament 2003. During UT's highly successful life, Epic and DE released patch after patch, not just for fixing and tweaking the game, but adding excellent content for many months after that. UT saw a dozen+ new maps and several official character types and skins, along with enhancements to the game engine. Not only are you paying for the game as it is now, but you are paying for the better game that it will become.

Still, not all games work like that. Epic and Digital Extremes are the exception. Failed games and bargain bin pricing are the rule with other developers and publishers. With these, it's hard to say that price alone was the cause of death.

Well, if they want to stop retailers and publishers from ripping them off for $30 USD over what we pay in the states, then by all means, boycott game salers for that week. Boycott those greedy people who add stupid amounts to the cost just because they feel like it.

All I know is that years ago, I paid $40-45 for any NES game, a game that likely had a development budget of several hundred thousand. These days, I can buy a $40 game and know it cost several million to make. The games I choose to buy now have more appeal and replay than games 10 years ago. Already I'm saving money - "percieved value per dollar" and "dollar value per hour of my enjoyment." Both are very high now.

If the cost of games in Britain and other countries are prohibitive to gaining new videogame customers, then go ahead with this campaign if you live there... tell them the costs are prohibitive, but make sure you buy the low-cost games... make sure you send a more powerful message to the industry, to the retailers... that only low-cost, low-budget games at reasonable prices will sell. Don't buy nothing at all, or you'll kill the good guys too.

People that buy games at full price at release, why do they not feel gipped when they see the game at $10-15 lower a few months later? Maybe if they are me, they do feel gipped. Maybe if they are me, they learned to wait a few months to get the game, when it becomes discounted by the publisher or it is on sale by the retailer, or I buy it used.

Even though I'm saving money, if others are like me and do the same thing, publishers are going to think their game is tanking. The lowering of price is often an act of desperation, just to get the already-manufactured discs and boxes sold and out of the warehouse.

This type of thinking by me and others like me cuts down on initial sales, and because the newer, better game is always out there on the next month's horizon, game sales are not likely to recover once the publisher is forced to lower the price. It's last month's game versus next month's game.

What we need is a system to reward early-purchasers, another way to say "Thanks for buying our game and giving us good sales numbers up front."

We need an honest publisher who says "We should only make this much money from this game. After that, we will give back to early adopters and lower the price to entice more purchasers, to expand the market size".

What will be given to the late-buyers is a lower price and what is given to the early-buyers is something I call "Gamestock".

Gamestock is very simple. It's just a coupon that goes along with your receipt. The receipt shows the date the game was purchased. This is important. The Gamestock certificate has the name of the game on it, and maybe an encrypted auth code or something nice.

Lets say you buy a PS2 or GC or Xbox game for $50 retail ($40 of that is the wholesale price and goes to the publisher, to cover manufacturing, shipping, advertising and to fund new games productions and to pay back dividends to investors).

Lets also say that the publisher has said, "We want to make 24 million from this game, to cover the 4 million production cost, the 2 million ad campaign, 1 million in shipping and to make an ungodly 16 million taxable profit. 

To make this much money, at $40 wholesale for each copy, they need to sell 600,000 copies. This is the amount of copies that a first party would need to sell. A third party must usually pay a $5-12 licensing fee to Microsoft, Sony or Nintendo (depending on who's console you are on), so if you still want to make 16 million in pure profit, you need to sell between 685,000-800,000 copies, depending on the console.

A large number of games sell little under 200,000 copies. Most games sell less than 100,000. Too many games sell less than 50,000.

Because of these low numbers, the publishers that don't top the sales charts regularly don't plan on selling enough games to earn 16 million. They just hope they sell enough to cover the costs of development, so that they have some money to make another game... or even enough money to pay their creditors!

Grim numbers aside, lets say a publisher does meet their estimate of profit. Let us say that the company got 3 times the cost of a game's development in gross revenue (4 million dollar game earns 12 million in the store - meaning it sold 300,000-400,000 games - a successful amount).

It's time to figure out how to give something back to the early-buyer and when to do it. Just lower the cost of the game by $5 increments and see how many copies you need to sell to still reach the 12 million mark:
 
 

3rd party game - $12 million honesty goal Wholesale price (minus licensing)  Required copies sold Retail price $30 ($10 license) 400,000 copies $50 $25 480,000 copies $45 $20 600,000  $40 $15 800,000 $35 $10 1.2 million $30 $5 2.4 million $25 $?.??  cost of manufacturing and  distribution of single copy ? million $15-20  minimum price

With this chart in mind, a publisher will always drop the price down to the next row when the sales are reached on the row with the current price. Why do they do this? Because the 12 million revenue mark has been reached, and it's time to leverage the game's popularity by dropping the price. No need to be greedy -- better image would come from dropping the price and "inviting" more gamers to play.

Also, for anybody who bought the game at full price, a Gamestock coupon that comes with the game can be redeemed in the store for savings on new games from the same publisher.

If Jimmy Tomsohn buys the PS2 game, "Legends of Evil" from Combo Productions for $50 ($30 profit to publisher, per copy), and the price later drops to $30 ($10 profit per copy - 1.2 million sold) his Combo Gamestock coupon, along with the receipt is good for $20 off the purchase of any other Combo Productions game. He could buy the new Combo "Evil Legend" game for $30 instead of $50, all because Combo is not greedy and agrees that they should not earn more money than they deserve.

Combo keeps track of sales numbers, and tells stores when to lower the prices. Hopefully, more people are enticed to buy games, instead of the same amount of people just buying more games - not much growth oppurtunity from that.

Assuming that both games sell the same amount, profit for the company remains high. That $20 that Jimmy thought he got back actually goes straight back to Combo, but that $20 promise is what keeps Jimmy buying Combo games along with the other "no-brainer-purchase" Blizzard and the EA games.

The only other rule here is that games should never be given away for free. Retailers should still get their markup and manufacturing costs must always be paid per copy, by the consumer. Thereforce, a game's price should never go lower than x dollars per unit... whatever number retailers have trouble with. $5 games are possible... lower than that, and you're not going to see that happen on the retail end, not if people are going to still be clerking the stores!

Probably not. People think they are entitled to as much money as they can get or something, long after it has made them enough money back. Then there are people who simply don't know what enough is, because they don't pay attention to numbers (reckless publishers do exist).

If the idea of Gamestock did exist, I can say that two things would happen.

1. People that buy games now would buy more games in the future, without publishers losing money! Profits won't be mega-super high, because a company must set their profit goal and stick too it if they want to be popular over being "filthy" rich. Profits and sales will be "just-right".

2. As game prices fall, popular games will fuel the sale of less popular games (through the same publisher). Having Gamestock means "wanting to spend Gamestock"... or you lose it. It's a "power-up" to the consumer... a big "thank you" from honest publishers and a clever way to get people to buy more of your future games.

It's not a gamble, it's just setting a limit on how much money you make, and watching what grows from that efficiency. It's anti-greed, and that is the only thing that can grow the game industry.

I just don't think you will ever see this happen though... it's cool, but unlikely. If any companies did start with a program like this, it would be a smart, daring, independent publisher who is confident of good future sales -- one that doesn't need to move into plush offices and upgrade to sleeker cars after every project. The big boys are too happy where they are with their fat cash.

(Note: if you read this far, then please remember that everything you read is unresearched and recalled from a foggy memory)