these margins look like a too big heap to me. Up to 75% of the retail price, depending on the end user price you are willing to pay, which is fluctuating in your posts between 10 and 20
WHat are you talking about ? I'm talking about physical distribution in that paragraph. Nobody could ever make 75% in retail.
Hmm, maybe I misunderstood your previous posts or my last one wasn't phrased right ? Train of thoughts:
- according to you a game costs 40-50 dollards
- you deem a retail price of 10-20 dollars more fair
- if I did undertand you correctly the difference comes from "inventory + distribution + intermediates" and "margins"
as you are a tad vague about numbers I just tried to take the middle ground and took 40 dollars as the "current price" and 10 dollars as the "what it should be price".Which means your price is 75% of the current price, which implicates that these 30 dollars are according to your posts spend on inventory n' stuff and margins - seems too much for me (thats why I extrapolated greed in, as there is something missing for me).
But while we are at it: while digital distribution looses a lot of weight in comparison to physical distribution, it isn't cheap either: You get lost of rents, wages, cost for physical media and logistic, etc.. But there are some "downsides" to this, that may even be harder to calculate in, as while you just have to serve digital copies, you cannot actually now how long you want/have to do that. Unless your just there for a quick cash grab, you may need to provide server space and bandwidth for 10, 20, x years and especially if you are all DRM n stuff and with customers internet access getting "speedier" constantly you may have to calculate in, that your customers will download the game more often then before.
Of course, this applies only if you are both producer and distributor like Valve, EA, Ubisoft.(which probably already covers 50% of the market). But if not, you will have distribution costs again, as the distributor wants is fair share of the price too.
Also don't forget about another thing that is practically obligatory these dasy: multiplayer either via the distributor or by yourself, again you have to invest a huge amount of money to provide a fast and stable online multiplayer experience.
And there is still the whole "collectors Edition" stuff that seems to do well (I guess, as it would not be an interesting sales model anymore) so physical distribution isn't totally a thing of the past.
But don't get me wrong, I don't think that these companies are "angels" that would rather die of starvation then giving "us" (jitter) games for a too high price, I just think that reality is more complicated then "they usually don't distribute physically, so it must be cheap as hell".
They will probably come back on that idea later on, though.
I guess so, too.