When new games go into the bargain bin within a month who is affected?

[onQ]

Just something I been wondering after seeing Madden on sale for $39 on the Xbox One & Xbox 360 after being bundled in free with the Xbox One to begin with.

Who is being affected by this? EA, Stores, Microsoft?

 

[orangpelupa]

depending on the agreement?

in my country, the store will take hit for games due to no official distribution line. But for official stuff like laptop, etc. its the manufacturer who takes the hit (sony, etc) for manufacturer discount. But if its store own discount, its the store that take the hit.

 

[Xbat]

Well if it works like my business the stores. The onus is on you to gauge interest in a product and then order what you think will sell, if it doesnt thats your problem.

 

[onQ]

depending on the agreement?

in my country, the store will take hit for games due to no official distribution line. But for official stuff like laptop, etc. its the manufacturer who takes the hit (sony, etc) for manufacturer discount. But if its store own discount, its the store that take the hit.

Well if it works like my business the stores. The onus is on you to gauge interest in a product and then order what you think will sell, if it doesnt thats your problem.

OK so it's basically the stores that take the hit. I was just wondering.

 

[DrJay24]

EA trying to prop up MS or just too much stock?

 

[Silent_Buddha]

Well if it works like my business the stores. The onus is on you to gauge interest in a product and then order what you think will sell, if it doesnt thats your problem.

It depends some of the larger retail stores have agreements with publishers/distributors. They'll order X number of titles and be liable themselves for any change in price. They'll order Y (more than X) and if it doesn't sell by a certain date then the publisher/distributor has to buy back excess inventory. As well in the case of Y order amount, if the publisher officially discounts the title (like it becomes a 20 USD discount title or something) then the publisher has to either buy back remaining stock and the retailer orders new stock, or the publisher must reimburse the retailer such that the retailers cost for remaining stock is inline with the new budget price.

Smaller retailers and retail chains don't have the power to negotiate those types of deals, however. And obviously not all titles get that treatment. It's usually reserved for titles that the publisher expects to sell a lot.

Regards,
SB

 

[Grall]

If something like Madden is discounted so heavily so quickly, surely it's a MS-financed marketing thing?

 

[eastmen]

Retail stores will pay $5 to $10 usd less than the MSRP for the title.

Some stores will use a lower price game as a loss leader to get people into stores for every person who goes in just for that product there is someone that will go in and spend money on other things.

 

[Silent_Buddha]

Retail stores will pay $5 to $10 usd less than the MSRP for the title.

Some stores will use a lower price game as a loss leader to get people into stores for every person who goes in just for that product there is someone that will go in and spend money on other things.

For retail chains like Walmart they use discounted games to draw in families with children. The parents then usually pick up something while they are there. So even if the game is sold at a loss, they more than make up for it if the consumer also picks up some other items (which sometimes have significantly higher margins).

Even if it's not a family case, there's always the chance the consumer will pick up an accessory (very high margin relative to software game sales).

Regards,
SB

 

[eastmen]

yea I know , I worked in retail too long.

That's why I'm surprised that DD hasn't taken off at retailers. Sell a 5 cent plastic card for $60 and keep a $10 profit and use almost no shelf space and no worry for theft.