Why Aren’t Digital Games Cheaper?
In the age of digital gaming, consumers are eager to own and play the latest titles without leaving their home. But although digital games provide players with the convenience of being able to play whenever and wherever they desire, they come with a much higher price tag than the physical editions. So why aren’t digital games cheaper?
Buying in Bulk
One of the key factors in why physical games are more affordable is due to the way they’re sold. When a publisher releases a game, they typically print thousands of copies and then sell them in bulk to retailers. This allows the publisher to make a lot of money from the one print run. Conversely, when a game is available digitally, it is has to be re-created and purchased each time it is sold, meaning the publisher earns less per sale.
Lack of Consumers
Whilst physical games are heavily reliant on large print runs to be successful, digital games rely heavily on the sheer number of consumers who buy the product. With a larger consumer base, the publisher is able to make up for the smaller profit per sale. Unfortunately for digital gamers, the cost of the product remains high due to people not purchasing enough copies.
Another reason why digital games are more expensive is because of the ‘foregone profit’. Physical games often include revenue from used sales, rentals, subscriptions, artwork and packaging. Because digital consumers do not receive the same ‘perks’ – they are often charged a higher cost.
Decreased Cost Over Time
Although it can be disappointing when purchasing digital games, many publishers now reduce the price over time. This is a great way of enticing more players to purchase the game and increase the consumer base – mitigates the risk of the ‘foregone profit’.
Ultimately, digital downloads are not as cheap as physical releases because of their high costs of production and the lack of consumers which in turn results in lower profit margins. But, thankfully, publishers have adopted the strategy of reducing the price over time – meaning we can all enjoy our favourite titles and save a few pennies in the process.