“We’re not worried about potentially alienating 10% of our customers. They’ll fall in line and buy digital. We have more megaman collections to pump out from 40 year old NES games on the PS6.”
Margins exist on physical games, especially as a third party. Capcom probably takes home some ~$25 per $60 disc game for PS5, less for a $60 Nintendo cartridge, and $42 per $60 digital game on PS or Steam. Lose a full half of those 10% of players but turn the other half into digital buyers, you’re barely short of breaking even. Then consider how many used game buyers you turned into people that actually pay Capcom for Capcom games.
Plenty of customers buy physical because hey, at the same price why not? That doesn’t mean they’ll stop buying Zelda or GTA or Resident Evil when Capcom/Sony takes the option away or Nintendo makes the download cheaper than the physical object (as it always should have been).
People act like these businesses haven’t done the math already. They did the math and people who think like we do are in such an extreme minority that even if every single physical game user boycotts entirely, they’ll still be making more money than they were before. It’s why mobile games embraced chasing whales at the cost of the quality of experience for the casual player. Fortnite was going to be an actual paid game beyond it’s current implementation, but that got dropped entirely for the free-to-play pay-for-skins cash-cow it became. If it’s profitable, they don’t give a damn if it sucks for most people.
We are in a stage of capitalism in which all available markets are saturated, and now to continue increasing profits year on year the only way to make that happen is to cater to wealthier customers who can afford the price increase that offsets the loss of the poorer customers.
But don’t they miss out the impact of second hand games? Not only does it allow people who may have never bought the game to play it and potentially buy DLC, but it also influences future conversions in which they’ll be more likely to buy the next installment day one brand new.
Who’s to say how much of resi 8 and 9s success is due to people being able to get into the franchise on the cheap and become hardcore fans?
Aside from attaching DLC to the purchase, a used-game buyer is “supporting” Capcom as much as a pirate is. It’s even worse than a pirate because a lot of pirates would have never bought the game anyway but a used game buyer clearly signals a willingness to spend money on the product. Just, yknow, less money. Turning a dude who would pay $40 for your thing into a dude who’d pay $60 is a lot easier than turning a dude who’d never pay a dime above $0.
For a console storefront operator like Sony, there’s more nuance because “Sony games” and “exclusives” aren’t direct value generators. The value they generate is in getting “give sony money for monthly subs and non-sony games machines” in customer’s living rooms. Taking the losses inherent in physical/used copies makes financial sense if it drives platform dominance. For Capcom, who doesn’t operate a storefront or platform, it’s just about how many sales, how much money per sale (changed by platform fees, disc manufacturing costs, and DLC postpurchases). A used game without DLC is $0 for capcom but is a sale. That’s worse than a pirate being $0 for capcom but would maybe have been a sale.
I’m hoping some digital buyers understand accessibility and preservation too, though. Like, it doesn’t have to be just the 10% that show this is unacceptable.
Having said that, I know gamers, as a whole, are terrible at voting with their wallets.
“Voting with one’s wallet” isn’t an action you take. “Gamers as a whole” have been voting with their wallets against disc games for over a decade. On PC, there was barely an outcry as brick and mortar stores stopped being part of the games experience. On consoles, people have been installing the games on HDDs since the Xbox 360 since actually running the game off a disc incurs atrocious load times. Gamers have accepted and paid for DLC. Gamers have accepted and dealt with day-one patches that render the data on the physical disc obsolete.
Hell, gamers as a whole chose to purchase the discless PS5. Gamers as a whole subscribe to PS+, Switch Online, Xbox Live, Gamepass, etc enough that it’s shifted the value model of the medium. “Not buying a product” isn’t nearly as much of a political statement as the wallet-vote drumbeaters think. Not buying the product is the default. Am I “boycotting” ubisoft when I haven’t purchased a Ubi game since Prince of Persia: the Sands of Time on the Gamecube? Sony’s Playstation 4 and 5 never appealed to me as a platform or product. There might be a shakeup or protest where people that do regularly give Sony (or whoever) money stop doing so, but that’s always going to be a drop in the bucket. Hell, the customers that buy physical (especially used) games for PS5, don’t buy digital and don’t pay for Plus are the least valuable customers for Sony anyway. Sony makes $0 a year off that guy where they make hundreds a year from a dude that literally just pays for ps+ and the newest COD.
The “wallets have voted” and the result for Sony is overwhelmingly “yeah, you’re gonna do just fine without disc diehards”. Games preservation purists already aren’t console customers because modern consoles are designed exclusively as anti-preservation ecosystems. The remaining reason to care about discs is the used copy trade, and that’s the same as piracy when it comes to the company. Worse, even, since there’s an entire industry and market surrounding “how to play zelda without paying nintendo” legally.
“Wallet voting” overwhelmingly rewards those that buy. Say you’re selling a $100/yr subscription service to a million people. You announce that you’re doubling the price to $200 a year. The internet gets mad. As long as less than five hundred thousand active subscribers get mad enough to cancel, you made the “right decision”. The opinion of anyone other than those subscribers doesn’t matter. The entertainment industry has reached a point of market saturation that getting more customers isn’t a feasible growth mechanism, so instead you have to squeeze the ones you have harder.
I voted with my wallet hard enough years ago that I’m no longer part of this “wallet vote”. I haven’t purchased a console game since Animal Crossing on the Switch, and haven’t purchased a physical one since Mario Odyssey - the only reason I did that was to dodge updating the console, so that I could do things Nintendo very much does not want a user doing on their console. I’ve never owned a Sony console except for a ps2, and never Xbox since the 360. My preferred platform, PC, has been used-games-free and physical-copies-free (CD keyed installers are not physical copies for any definition other than “is pretty on a shelf”) for decades, and it’s better than a walled console garden could ever be. DRM-free purchases and piracy exist on PC and gasp people still buy PC games.
If the glorified DRM key for accessing the digital game (in the form of day 1 patches and postlaunch content) finally dying is what raises awareness of consoles being a hostageware platform, so be it.
I mean, I’d daresay the gaming community has a large community dedicated to both accessibility and preservation, they’re just generally frowned upon because it’s, you know, piracy. However, only through piracy can I get an original release copy of Tony Hawk Pro Skater 2 for PlayStation, Dreamcast and Windows. You can only get re-releases, remakes, and the like, often which do not hold up to the original in terms of style and control.
I dare say that games are preserved more through digital means then by physical media though. You have plenty of sites keeping different versions of a number of games, old or new, without any form of DRM (or bypassed) on PC (through “piracy”, as ironic as it may sound).
Physical media nowadays are mostly a form of DRM anyway - a disc that will only work on a certain system, and that usually requires you to go online to activate it anyway, which means that they won’t work after a couple of decades (or even much earlier). The biggest advantage of it, imo, is the freedom of selling/buying or trading used copies.
While the margins are better I think there will be a discovery knock on effect. Like how skipping theaters and straight to streaming it made it hard for the avg person to know what the “legit” games were and what was digital only my games decreasing the Perceived value to the title regardless of the actual valve is.
I don’t know about that. Physical discs always felt cheaper to me than digital games. People complain about digital games being ‘rented’ but for me a game on disc feels more like a rental (insert disc to prove you haven’t returned it yet), compared to digital which is permanently tied to your account and always available when you want it.
They’re reassuring their investors to remain optimistic about their investments. Besides, some amount of that 10% will shift to digital, as it’s been trending that way, where they get higher profit margins, so it might come out in the wash in actuality.
That assumes every single disc buyer becomes a person that doesn’t ever buy capcom games. Given the margins lost on each physical sale (licensing fees, manufacturing, shipping, the retailer’s own markup), as long as half of those disc enjoyers become digital purchasers Capcom has already lost nothing.
Additionally, how many millions per year are spent on used Capcom game discs? If literally every used Capcom buyer stopped ever buying Capcom products, Capcom loses $0. If any percent of those used game buyers becomes willing to pay full price (or hell, digital on-sale price), that’s more money in Capcom’s pocket to offset losing true physical media diehards.
You do realize that same game costs $13 as a digital version? I can guarantee people are not going to buy a physical version of a game if it cost between $140 and $160 (assuming the same overhead as your example).
Where are you getting hundreds from? If a $30 sale is $13 digitally, that means the production overhead can be no more than $17 for the media… and it couldn’t be that high, because LRG needs a cut as well as the publisher and developer.
My bad, I guess I was more tired than I thought. That said, the $17 is production costs because the cost of the digital version already contains a developer/publisher cut and the digital storefront cut (which in this case would subsidize LRG cut). Which means those cuts are already covered by the original $13.
While I messed up the numbers the point more or less stands, would people pay $90 for a physical version of a $70 game? Most people already consider $70 to be too high and wait for discounts.
There’s no point in asking that question because companies aren’t going to go “well, we no longer have to sell physical so we can reduce the price to make less money”. I’m well aware games don’t have to cost $70 (which is why I almost never buy games at $70) but it doesn’t change the fact that AAA games do cost $70. It also doesn’t change the fact that digital sales surpassed physical sales 6 years ago and have now completely taken over physical media. The profit margin of digital sales at the $70 price point is the norm for AAA. It’s why companies like Capcom are a-okay with consoles going fully digital because if the consoles can force even half of the physical media consumers into digital they’re probably going to make more money than if they kept selling physical alongside digital.
If there’s a market for AAA to sell physical media it will come with the same strategy that LRG is using where you’re paying extra $20 to get a physical version of the game.
Weird take.
“We’re not worried about potentially alienating 10% of our customers. They’ll fall in line and buy digital. We have more megaman collections to pump out from 40 year old NES games on the PS6.”
Margins exist on physical games, especially as a third party. Capcom probably takes home some ~$25 per $60 disc game for PS5, less for a $60 Nintendo cartridge, and $42 per $60 digital game on PS or Steam. Lose a full half of those 10% of players but turn the other half into digital buyers, you’re barely short of breaking even. Then consider how many used game buyers you turned into people that actually pay Capcom for Capcom games.
Plenty of customers buy physical because hey, at the same price why not? That doesn’t mean they’ll stop buying Zelda or GTA or Resident Evil when Capcom/Sony takes the option away or Nintendo makes the download cheaper than the physical object (as it always should have been).
Margins on digital games are much higher, even if those 10% don’t all switch to digital they will probably still make more of a profit.
People act like these businesses haven’t done the math already. They did the math and people who think like we do are in such an extreme minority that even if every single physical game user boycotts entirely, they’ll still be making more money than they were before. It’s why mobile games embraced chasing whales at the cost of the quality of experience for the casual player. Fortnite was going to be an actual paid game beyond it’s current implementation, but that got dropped entirely for the free-to-play pay-for-skins cash-cow it became. If it’s profitable, they don’t give a damn if it sucks for most people.
We are in a stage of capitalism in which all available markets are saturated, and now to continue increasing profits year on year the only way to make that happen is to cater to wealthier customers who can afford the price increase that offsets the loss of the poorer customers.
But don’t they miss out the impact of second hand games? Not only does it allow people who may have never bought the game to play it and potentially buy DLC, but it also influences future conversions in which they’ll be more likely to buy the next installment day one brand new.
Who’s to say how much of resi 8 and 9s success is due to people being able to get into the franchise on the cheap and become hardcore fans?
Aside from attaching DLC to the purchase, a used-game buyer is “supporting” Capcom as much as a pirate is. It’s even worse than a pirate because a lot of pirates would have never bought the game anyway but a used game buyer clearly signals a willingness to spend money on the product. Just, yknow, less money. Turning a dude who would pay $40 for your thing into a dude who’d pay $60 is a lot easier than turning a dude who’d never pay a dime above $0.
I think there’s a bit more nuance than that to be honest
For a console storefront operator like Sony, there’s more nuance because “Sony games” and “exclusives” aren’t direct value generators. The value they generate is in getting “give sony money for monthly subs and non-sony games machines” in customer’s living rooms. Taking the losses inherent in physical/used copies makes financial sense if it drives platform dominance. For Capcom, who doesn’t operate a storefront or platform, it’s just about how many sales, how much money per sale (changed by platform fees, disc manufacturing costs, and DLC postpurchases). A used game without DLC is $0 for capcom but is a sale. That’s worse than a pirate being $0 for capcom but would maybe have been a sale.
I’m hoping some digital buyers understand accessibility and preservation too, though. Like, it doesn’t have to be just the 10% that show this is unacceptable.
Having said that, I know gamers, as a whole, are terrible at voting with their wallets.
“Voting with one’s wallet” isn’t an action you take. “Gamers as a whole” have been voting with their wallets against disc games for over a decade. On PC, there was barely an outcry as brick and mortar stores stopped being part of the games experience. On consoles, people have been installing the games on HDDs since the Xbox 360 since actually running the game off a disc incurs atrocious load times. Gamers have accepted and paid for DLC. Gamers have accepted and dealt with day-one patches that render the data on the physical disc obsolete.
Hell, gamers as a whole chose to purchase the discless PS5. Gamers as a whole subscribe to PS+, Switch Online, Xbox Live, Gamepass, etc enough that it’s shifted the value model of the medium. “Not buying a product” isn’t nearly as much of a political statement as the wallet-vote drumbeaters think. Not buying the product is the default. Am I “boycotting” ubisoft when I haven’t purchased a Ubi game since Prince of Persia: the Sands of Time on the Gamecube? Sony’s Playstation 4 and 5 never appealed to me as a platform or product. There might be a shakeup or protest where people that do regularly give Sony (or whoever) money stop doing so, but that’s always going to be a drop in the bucket. Hell, the customers that buy physical (especially used) games for PS5, don’t buy digital and don’t pay for Plus are the least valuable customers for Sony anyway. Sony makes $0 a year off that guy where they make hundreds a year from a dude that literally just pays for ps+ and the newest COD.
The “wallets have voted” and the result for Sony is overwhelmingly “yeah, you’re gonna do just fine without disc diehards”. Games preservation purists already aren’t console customers because modern consoles are designed exclusively as anti-preservation ecosystems. The remaining reason to care about discs is the used copy trade, and that’s the same as piracy when it comes to the company. Worse, even, since there’s an entire industry and market surrounding “how to play zelda without paying nintendo” legally.
“Wallet voting” overwhelmingly rewards those that buy. Say you’re selling a $100/yr subscription service to a million people. You announce that you’re doubling the price to $200 a year. The internet gets mad. As long as less than five hundred thousand active subscribers get mad enough to cancel, you made the “right decision”. The opinion of anyone other than those subscribers doesn’t matter. The entertainment industry has reached a point of market saturation that getting more customers isn’t a feasible growth mechanism, so instead you have to squeeze the ones you have harder.
I voted with my wallet hard enough years ago that I’m no longer part of this “wallet vote”. I haven’t purchased a console game since Animal Crossing on the Switch, and haven’t purchased a physical one since Mario Odyssey - the only reason I did that was to dodge updating the console, so that I could do things Nintendo very much does not want a user doing on their console. I’ve never owned a Sony console except for a ps2, and never Xbox since the 360. My preferred platform, PC, has been used-games-free and physical-copies-free (CD keyed installers are not physical copies for any definition other than “is pretty on a shelf”) for decades, and it’s better than a walled console garden could ever be. DRM-free purchases and piracy exist on PC and gasp people still buy PC games.
If the glorified DRM key for accessing the digital game (in the form of day 1 patches and postlaunch content) finally dying is what raises awareness of consoles being a hostageware platform, so be it.
I mean, I’d daresay the gaming community has a large community dedicated to both accessibility and preservation, they’re just generally frowned upon because it’s, you know, piracy. However, only through piracy can I get an original release copy of Tony Hawk Pro Skater 2 for PlayStation, Dreamcast and Windows. You can only get re-releases, remakes, and the like, often which do not hold up to the original in terms of style and control.
I dare say that games are preserved more through digital means then by physical media though. You have plenty of sites keeping different versions of a number of games, old or new, without any form of DRM (or bypassed) on PC (through “piracy”, as ironic as it may sound).
Physical media nowadays are mostly a form of DRM anyway - a disc that will only work on a certain system, and that usually requires you to go online to activate it anyway, which means that they won’t work after a couple of decades (or even much earlier). The biggest advantage of it, imo, is the freedom of selling/buying or trading used copies.
While the margins are better I think there will be a discovery knock on effect. Like how skipping theaters and straight to streaming it made it hard for the avg person to know what the “legit” games were and what was digital only my games decreasing the Perceived value to the title regardless of the actual valve is.
I don’t know about that. Physical discs always felt cheaper to me than digital games. People complain about digital games being ‘rented’ but for me a game on disc feels more like a rental (insert disc to prove you haven’t returned it yet), compared to digital which is permanently tied to your account and always available when you want it.
Yeah the importance of the game box on the self than the disk in the box
They’re reassuring their investors to remain optimistic about their investments. Besides, some amount of that 10% will shift to digital, as it’s been trending that way, where they get higher profit margins, so it might come out in the wash in actuality.
So looking at the projected earnings of 190,000,000,000 yen, that means they are a-okay with losing 10%, which comes out to a missing $11,996,123 in sales.
I wish I was in a position where I could shrug off 11 million dollars.
That assumes every single disc buyer becomes a person that doesn’t ever buy capcom games. Given the margins lost on each physical sale (licensing fees, manufacturing, shipping, the retailer’s own markup), as long as half of those disc enjoyers become digital purchasers Capcom has already lost nothing.
Additionally, how many millions per year are spent on used Capcom game discs? If literally every used Capcom buyer stopped ever buying Capcom products, Capcom loses $0. If any percent of those used game buyers becomes willing to pay full price (or hell, digital on-sale price), that’s more money in Capcom’s pocket to offset losing true physical media diehards.
But they are saving at least 5 times that by not fucking with physical discs….
Wow, at those rates Limited Run Games must be hemorrhaging money by selling physical media at $30 a copy.
You do realize that same game costs $13 as a digital version? I can guarantee people are not going to buy a physical version of a game if it cost between $140 and $160 (assuming the same overhead as your example).
Where are you getting hundreds from? If a $30 sale is $13 digitally, that means the production overhead can be no more than $17 for the media… and it couldn’t be that high, because LRG needs a cut as well as the publisher and developer.
My bad, I guess I was more tired than I thought. That said, the $17 is production costs because the cost of the digital version already contains a developer/publisher cut and the digital storefront cut (which in this case would subsidize LRG cut). Which means those cuts are already covered by the original $13.
While I messed up the numbers the point more or less stands, would people pay $90 for a physical version of a $70 game? Most people already consider $70 to be too high and wait for discounts.
Your thinking is a little bit backwards. The $70 price point of video games was not set by digital storefronts… it was set by physical media.
$70 is where the development cost, marketing, physical production and shipping can be sold at a profit.
So maybe you should be asking why I can buy a disc of Madden 27 at $70 while you can’t buy it at $50.
There’s no point in asking that question because companies aren’t going to go “well, we no longer have to sell physical so we can reduce the price to make less money”. I’m well aware games don’t have to cost $70 (which is why I almost never buy games at $70) but it doesn’t change the fact that AAA games do cost $70. It also doesn’t change the fact that digital sales surpassed physical sales 6 years ago and have now completely taken over physical media. The profit margin of digital sales at the $70 price point is the norm for AAA. It’s why companies like Capcom are a-okay with consoles going fully digital because if the consoles can force even half of the physical media consumers into digital they’re probably going to make more money than if they kept selling physical alongside digital.
If there’s a market for AAA to sell physical media it will come with the same strategy that LRG is using where you’re paying extra $20 to get a physical version of the game.