THE BORE
General => Video Game Bored => Topic started by: Damian79 on February 25, 2010, 08:29:24 PM
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http://latimesblogs.latimes.com/entertainmentnewsbuzz/2010/02/anatomy-of-a-60-dollar-video-game.html
Ever wonder where your hard-earned money goes after you've plunked $60 down on a game at GameStop or Target? Here's one answer:
Much of the data came via a slide shown Thursday by Steve Perlman, founder of OnLive, an on-demand video game service based in Palo Alto.
Perlman, who spoke during the Design Innovate Communicate Entertain Summit in Las Vegas, showed the slide as part of an update on his company's service, which is expected to launch later this year.
Another way to look at it is to say publishers such as Activision and Electronic Arts receive $45 after retailers take a $15 cut. Publishers turn around and pay a $7 licensing fee to console manufacturers such as Microsoft, Sony and Nintendo. The cost of making, packaging and shipping game discs to stores carves up another $4. Finally, not all games sell, so the expense of returning unsold inventory eats up another $7.
That leaves publishers with about $27 per disc sold for development, marketing and other expenses. These are, of course, back-of-the-envelope averages. Each of these numbers can vary. For instance, a publisher could negotiate a smaller licensing fee with console manufacturers. And by deploying the Goldilocks method of inventory (not too much, not too little), they can also minimize returns. Tinkering with the margins in these ways lets companies tune their bottom lines.
-- Alex Pham
(http://i47.tinypic.com/mvq98z.jpg)
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source: onlive
lools
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You saying they are wrong?
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Yep
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Oooh, reference materials
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You got an alternative to it?
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Smells like GAF here
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You got an alternative to it?
Nope, dont care
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This is just for knowledge. Why even come into thread if you got nothing to contribute? This is simply a reference thread.
EDIT: It was a reply to duckman.
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That's rather inaccurate.
You got an alternative to it? Anything at all?
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Maybe it is a discrepancy between other countries. For example i know that in a $50 game it was $10 to retailers here in Australia because a retailer here told me so.
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This is simply a reference thread.
EDIT: It was a reply to duckman.
Reference for what, more efficient GAFstink discussion?
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Well we argued in the past NPD thread so i thought it would be good to know these things. And i dont see what is wrong with GAF anyway, please educate me what is wrong with GAF.
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please educate me what is wrong with GAF.
Well, the need for reference threads, for one. The fact that there have been monthly multipage NPD argument here as of late is enough of a blight on the site.
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Duckman is going to feel like such a fucking idiot when he says something in some future thread and I bust out these reference materials on his ass.
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$15 retailer cut = 25% margin
Doesn't sound right to me >:(
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Duckman is going to feel like such a fucking idiot when he says something in some future thread and I bust out these reference materials on his ass.
Probably!
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You didn't have to wait long! Booya!
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$15 retailer cut = 25% margin
Doesn't sound right to me >:(
Retailers usually make less. Not kidding. If GameStop only sold new software, it'd be in the shitter.
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That's what I was saying :spin. There's no way they're getting 25% profit off of game sales
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I hope this makes all the bayonetta fans cry.
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$15 retailer cut = 25% margin
Doesn't sound right to me >:(
Dude, there's a pie chart and everything.
:patel
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$15 retailer cut = 25% margin
Doesn't sound right to me >:(
depends on the retailer and/or publisher. maybe it averages to 25% but that number isn't common as willco said
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$15 retailer cut = 25% margin
Doesn't sound right to me >:(
Retailers usually make less. Not kidding. If GameStop only sold new software, it'd be in the shitter.
Something is fishy. Vireland at GAF is saying that you guys make even more than that, he says that you make 21$ off every $60 game, that's gotta make you laugh. I am assuming that both the retailer and publisher is getting ripped off somewhere.
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If this was true then games would never drop to $20 MSRPs.
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:lol
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Vireland from small publisher makes less than EA or Activision, shocking news.
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Wow, I better start buying more games then :drool
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Damian is now admin
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$15 retailer cut = 25% margin
Doesn't sound right to me >:(
Retailers usually make less. Not kidding. If GameStop only sold new software, it'd be in the shitter.
Yep, I used to work someplace where we could look stuff up and see how much the store paid. I remember at least one N64 game which was sold for $59.99 cost them $53.
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Yeah, back in the days when games were $50 GS was lucky to get $10 from a new game sale. These days I'd imagine they're lucky to get $12. The reason GS is able to survive and thrive is the high margins they make from selling used games.
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shit/bin this fucking ATROCIOUS thread
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The publisher margin looks about right. It's halfway between 3 and 4 slices on a Papa John's large. 3 slices is a bit too little, but the 4th always makes me wish I stopped at 3. 3.5 might just work.
I'll have mine with pepperoni, italian sausage, green peppers, and onions, thanks. Oh, light on the cheese. Almost non-existant, sort of like actual retail margins.
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Something is fishy. Vireland at GAF is saying that you guys make even more than that, he says that you make 21$ off every $60 game, that's gotta make you laugh. I am assuming that both the retailer and publisher is getting ripped off somewhere.
Retailers make $20 off a $60 game? :lol
... As someone that was privy to what two separate retailers pay wholesale, it's rare that retailers make more than $10 off a game. And on the Triple-A stuff, it's usually far less. Losing new software to internal or customer theft can destroy a store's inventory numbers as a result - since the cost is so high on each unit.
The publisher isn't getting ripped off, but if it wants to fudge the numbers so it doesn't have to pay their people accordingly, that's their prerogative. The fact is that a specialty store like GameStop could not survive on new software sales alone, and it's one of the big reasons why GameCrazy has nosedived (so much of their business was new software/hardware and not used). Retailers like Wal-Mart, Target, Best Buy, etc. don't have that problem.
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I swear we had this same thread a couple weeks ago. ???
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Wow, Cohen.
I guess you've never had a mushrooms and chicken pizza? Fucking godly.
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chicken on pizza :lol
might I suggest a nice pairing
(http://chadwright.files.wordpress.com/2008/06/ecto_cooler.jpg)