And you thought that the economic situation couldn’t get any worse…
Posted by James | Filed under Gaming, Opinion
Word has reached us, from MCV, that prices on many console games are going up as of this year from a RRP of £40 to around £54.
Let me reiterate that for you, FIFTY FOUR POUNDS STERLING!!!11!!111!01010011011
I thought that the current economic climate, combined with the fact that we’ve always been gouged on price by the games and technology industries would perhaps lead to slightly decreased prices if not keeping them at the same level. Instead some companies have decided that they’re not getting enough from us and rather than increase the price on the very cheap US market (where they sell a hell of a lot more copies than in the UK) they want to gouge us even more. Their excuse (in quote form):
“Exchange rates between the Euro and the pound are making it very difficult for publishers to show an acceptable operating margin in the UK,” THQ’s EVP of worldwide publishing Ian Curran told MCV.
Now, i’m no mathematical genius or economic analyst but i call bullshit on this. Let me help you reach the same conclusion.
First off, i don’t think console prices have increased or decreased since the £5-10 increase upon the release of the Xbox 360 in December 2005 so we can make the comparison between the relative cost of purchasing a console game and the currency exchange rate between US dollars and pounds sterling…. found here. If we take the exchage rate through each year, starting in 2006, then we can plot the change:
Looking at the trend it is obvious where the crash occured in 2008, however, things are looking up and the pound is already improving. Now, this is the thing that gets me. In Jan 2006 you got $1.77 for every £1, in Jan 2009 you got $1.44 and this month (July) you got $1.63. That is NOT a big change…. of course it’s a massive change if you take into account where it had climbed to but if you’ve read any of the blurb surrounding the whole economic crash you’d know that the rate of increase that it had reached over the last few years was all based on lies and deception…. hollow promises and wishful thinking. It was a fantasy that eventually became grounded in reality…. and it affected pretty much everybody.
You see, if this was purely a UK thing then yes, i could understand the price hike…. but America lost a lot of worth in their currency as well so it’s all relative. Now, if they’re telling me that suddenly it costs more to make a current gen game 3 years after release when tech is locked down and code tricks are known on an iterated engine that has seen multiple releases this generation on the Xbox 360… i don’t believe them. If they’re telling me that they’ll suddenly get £10 less revenue on a sale than they would 3 years ago then i definitely don’t believe them (since the proof is up there in the graph) as they’re only making $0.14 less per pound revenue per copy than they were 3 years ago. The situation is also similar in the conversion from Euros to Pounds with a loss of €0.68 per £1 reveune.
Let’s say that off of every title that is £35 upon release they make £29 revenue from the shop sale (which isn’t that outlandish) they would have received $53.36 (€42.05 from £ and $53.40 from €) in July 2006 and $47.27 (€33.64 from £ and $47.10 from €) in July 2009 which is a discrepancy of $6.09 when converting from £->$ or $6.3 when converting from €->$. Maybe over such large volumes that $0.21 makes a huge difference but i’m not thinking that this is the cause (or at least a legitimate cause for such a huge price increase). The varying factor that i can’t investigate is haulage prices over the last few years – though i can make an approximate assumption based on crude oil prices.
Now, in 2006 there was a spike in prices (i forget the reasons but i remember the price hike here at the pumps in the UK) which put oil, per barrel at around $65-70…. in comparison the price of oil is now between $60-65 having been lower than this for half of the year – which should put haulage costs at around the same point, if not slightly cheaper. It’s possible, however, that they’re trying to claw back some of the money lost in that second half of 2008 where oil prices soared and the exchange rate “crashed”… but even with that assumption you would expect this to be a temporary price hike and also nowhere near the announced £15 which would yield revenue of approximately $78.24 per copy sold… which is just ludicrous.
I never understood the mentality that most corporations have of increased profits year on year… for every year ever. Economics doesn’t work like that and it’s a mathematical/economic impossibility… it’s IMPOSSIBLE TO ACHIEVE!! I really hope this ‘initiative’ and the bullshit corporate speak that goes along with it fails miserably. I’m tired of being stepped on – you’re not making as much money anymore? Well put the price up in ALL the countries that have suffered economic problems (”pro-tip”: that includes the US).
Not sure what the corporate side of the games industry believe the UK is like but i’m sure it includes the allegorical “streets paved with gold”…
2 Responses to “And you thought that the economic situation couldn’t get any worse…”
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Kylie Batt Says:
April 11th, 2010 at 9:32 amбраво…так держать… супер…
I thought that the current economic climate, combined with the fact that we’ve always been gouged on price by the […….
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The Says:
August 30th, 2010 at 2:24 amThe http://qhowyxj9ke.AACEHARDWARE.INFO/tag/The+in+Your+light+Light/ : Light…
in…
