I agree inventory and distribution costs go away for the publisher but they are comparable to the cost of bandwidth and online storage given the efficiency of modern logistics and Just In Time practices for physical media. With publishers able to eliminate physical stock risk there is no need for them to eat the cost of clearance sales (typically well below RRP) to dump aged or slow moving stock the way they do now with physical media.
As an example Alien: Isolation is €69.99 on PSN & XBL, €50 on Steam and €30 via Gamestop (PS4 disc). Steam is useful here as an imperfect example of what the RRP for titles on console might be if publishers could just eliminate physical inventory cost altogether as they essentially have on PC. Without the need to placate a retailer with their inventory woes the digital RRPs (which the publishers set) have stayed higher than the retail price of console titles despite that pie being split many more ways than the digital PC price.
With console online stores being monopolies owned by the platform holders the digital RRPs are identical to retail console costs as the platform holder always needs to keep retail onside to ensure they stock the hardware. The distorting effect of this can be seen in how despite PSN & XBL both offering A:I for as low as €19.99 on sale they return to full retail RRP rather than match the actual street price so that retail will typically be on par or cheaper outside of sales.
So even if publishers are happy to cut out the retailer margin and cut the price to the consumer as on PC the platform holder will always have retails back in the digital arena. Conversely this means that for the consumer retail prices for physical copies are often lower than that the publisher would choose for themselves in all digital future. I'm ignoring the effect of key resellers in the PC space as they are an artefact of the competitive digital retail market on PC which is an impossibility on console.
As an example Alien: Isolation is €69.99 on PSN & XBL, €50 on Steam and €30 via Gamestop (PS4 disc). Steam is useful here as an imperfect example of what the RRP for titles on console might be if publishers could just eliminate physical inventory cost altogether as they essentially have on PC. Without the need to placate a retailer with their inventory woes the digital RRPs (which the publishers set) have stayed higher than the retail price of console titles despite that pie being split many more ways than the digital PC price.
With console online stores being monopolies owned by the platform holders the digital RRPs are identical to retail console costs as the platform holder always needs to keep retail onside to ensure they stock the hardware. The distorting effect of this can be seen in how despite PSN & XBL both offering A:I for as low as €19.99 on sale they return to full retail RRP rather than match the actual street price so that retail will typically be on par or cheaper outside of sales.
So even if publishers are happy to cut out the retailer margin and cut the price to the consumer as on PC the platform holder will always have retails back in the digital arena. Conversely this means that for the consumer retail prices for physical copies are often lower than that the publisher would choose for themselves in all digital future. I'm ignoring the effect of key resellers in the PC space as they are an artefact of the competitive digital retail market on PC which is an impossibility on console.
