Monday, 26 July 2010

Cutting Game Prices Won't Boost Sales

High profile companies including Sony, HMV and THQ have responded to retailers calling for lower prices on video games in the UK. The responses come as a result of calls such as those from Sainsbury’s, to lower the RRP of titles upon release given the current climate. HMV CEO Simon Fox had this to say on the matter at the company’s own conference:
“Everybody who works for HMV loves music, video and games.”

“We hate to see products getting devalued in the market. In fact, the bigger the product becomes the more it gets discounted and devalued. We are committed to doing things differently to others.”
SCE UK sales director Mark Howsen had this to add on the matter:
“I don’t think SRP reductions are the answer. This would perhaps provide a short-term blip but we would be back in the same position a few weeks from now."

“Ultimately consumers still want to experience the new innovation and excitement our industry’s products can deliver. “The main difference now is they’re having a tougher time economically and have become more discerning in their purchases. They need to be captivated and be sure that the product they are buying will deliver.”
THQ’s UK marketing director Jon Rooke also contributed his thoughts on the situation:
“If price becomes a bigger factor, then maybe the industry will look at different ways of bringing games to market with different business models.

“But whilst we’re all being tasked by the industry to make 95 per cent Metacritic games, theatrical experiences costing $50 million with at least 40 hours of gameplay in there, there’s going to be a cost to both the consumer and the retailer.”
Although it can be understood from a business point of view that they want to make as much profit as possible, with VAT going up to 20% early next year it will be hard for the games market to keep up the same momentum if prices remain high for longer periods. Still, we won’t be in a recession forever and I’m sure the games market won’t disappear any time soon either.

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