Pachter: "UK games retail market is a joke"

I may be mistaken, but I thought the issue was more along the lines of off-line retailers pricing themselves out the market, in part due to their nature of being off-line and all the baggage and cost that comes with it.

Companies like GAME, Blcokbuster and HMV can charge maximum RRP for titles and still not survive, unless we're suggesting they should sell games for £60 or even £65 to make more money.

He's the analyst but I have a feeling those companies have/had many issues.

As for used games, well, there are other companies that specilise in that area, so its not all a loss.

Posted:3 months ago

I just think games are 2 expensive and should be priced lower like Anarchy reigns and The Walking dead. $30 dollers makes it easier to purchase games, versus $120+tax for 2 games. Most games drop in price. Hitman Absolution is already at $30. Why couldnt it be sold at $30 from the get go?

Posted:3 months ago

Why couldnt it be sold at $30 from the get go?

Posted:3 months ago

I think the main reason for the high prices is that we as consumers will always want to go cheaper. If a title is going to drop in price anyways, why not start off higher to make more money off of the 'need it day 1' crowd?

iOS releases are considered expensive at 5 dollars. If $30 became the new $60, we'd soon be insisting on lowering again to 10.

Posted:3 months ago

If you buy few games and they are all crap with not working services day 1 as a bonus, with so many bugs and bearly competitive to indie and/or mobile games. Noone want to spend another 60$ in the shop if they can sped 5$ and have as much fun. What more why even go to shop if you can have game in 20 min without leaving home? Its developers who made their games locked to first owner with so many accounts and protections so let them fall apart* why whould we bother? Locked games have no additional value in box unles you really really love that game.

How many of you go hunting those days? None? Maybe one, and I''m sure it's not all you get for feeding your family. Stone age passed and same will be with so-expensive overadvertised games and boxes.

* - together with retail many old-school developers die unless they start changing.

Posted:3 months ago

Any software sold at retail should be of the gift voucher type these days. Music is sold in this way. Cant see any reason why games cant be as well. I tunes vouchers are readily available in the same shops and do exactly the same thing, without the loss leading price problems.

Posted:3 months ago

I don't often see significant cut-throat pricing except on the biggest name titles a couple times a year. I'm not sure this situation is any worse than it's ever been?
Who exactly are these High Street retailers Pachter is talking about? He mentions the Dixons group - any time I've been in Dixons their prices are ridiculously expensive.
I don't get it.

Posted:3 months ago

The problem with retail is that people increasingly aren't willing to pay £50 for a game, apart from a handful of big blockbuster games like Call of Duty, FIFA and Madden, some of which they will then play all year round. The market for mid-range retail games has almost entirely collapsed over the last few years. I can't help feeling that most games, particularly new IPs and lower budget games, would make more money at a lower initial price point, either at retail or digitally.

Most publishers, apart from Nintendo, focus all their marketing and PR activities around the build up to a game's launch. And most specialist retailers these days dedicate at least half their store space to used games, so the amount of shelf space available for new product beyond this week's new releases, the top ten chart and a handful of perennial sellers and special promotions is often pretty limited, with the rest of the games jumbled up in rough alphabetical order on a couple of shelving units per platform (if you're lucky), hidden somewhere at the back of the store. Even if you venture back there and find a game you want, when you take it to the checkout they'll probably ask you if you want a used copy for a couple of pounds / dollars less.

In that climate, if your game releases at £50 and doesn't chart straight away, you're pretty much dead, and it's too late to drop the price as you've already lost all visibility in store, your marketing budget is spent, and your press coverage has all been and gone.

Obviously though if your game is a AAA blockbuster and/or part of an established series or franchise, with a big marketing push behind it, and you believe you can get a large volume of sales at £50, then why wouldn't you. Prices generally drop over time in line with demand, so for those of us who aren't that desperate to get the game on day one, most titles are on sale for under £20 within a few months anyway, from online retailers if not on the high street, giving your title a longer tail.

Edited 1 times. Last edit by John Bye on 11th February 2013 5:52pm

Posted:3 months ago

what nonsense, I guess Pachter has forgotten games are luxury products and in time of crisis is one of the first things that get's left at the counter.. Also people tend to buy games/products through the internet instead of retailshops which also has a hit on those retailmarkets.

Pachter doesn't know anything about the UK market, all he can do is throw another bone into the media and have his next 15 minutes of fame...

Posted:3 months ago

lol! Guess I wasn't going crazy then.

I agree in thinking games are high as they are, but especially in the mentioned retailers. Pricing any higher wouldn't have made the situation better when people are looking for cheaper products.

Posted:3 months ago

if the UK market is getting games too cheap... then the USA and Japan markets must be getting them for practically nothing, because they get them even more discounted than we do...

Posted:3 months ago

What he's moaning about is that US firms are scared of investing in the UK, hence his Gamestop remark.

'if games are dominated by mass merchants like Dixons' shows his er unique insight.

Posted:3 months ago

The UK games retail market is "a joke", yes. But not because prices are too low (ridiculous statement by the way), it's a "joke" because retailers offer nothing that a consumer can't have better or matched from Amazon or Steam.

The experience of going to a shop expecting something exciting is extinct. Long gone are the days where shops cared about showing off and display/sell 'cool stuff', the retail focus today is sales, and Amazon/Steam do that job a lot better.

Edited 1 times. Last edit by Andreia Quinta on 11th February 2013 9:33pm

Posted:3 months ago

To be so incisive Pachter has obviously spent a lot of time in the UK and has visited a representative cross section of stores around the country.

The real problem in the UK is that several big specialists failed to give customers a reason to visit them and to spend money.

Posted:3 months ago

The reason Uk retail is knackered is because its run by greedy people that are interested in making money and not investing back in the companies. Game is a good example of this they made a fortune in the golden years and were did all that money go ? pachter is an overpaid dick !

Edited 1 times. Last edit by Anthony Wade on 12th February 2013 3:11am

Posted:3 months ago

The problem is overgrown marketing / management with too much influence over the creative process. Customers already see this and they won't buy games developed without passion. In fact, our industry needs to get rid of characters like this Patcher. Unless you can help the industry create an object of worship like System Shock 2 -- go make your money elsewhere, you useless leech!

Posted:3 months ago

Hilarious article. Amazon and eBay have replaced the buy/sell scenario this old guy thinks still has a chance. Welcome to the 21st century...

Posted:3 months ago

I thought I heard someone in the UK complaining that the original Black Ops was sold for something like £80. Which of course equates to even higher prices with the conversion rate. The history of piracy in the UK goes back farther than in the rest of the world, and that was with games that sold for £10 or less. I would imagine many alienated Brits decided to 'stick it to' the publishers, deciding to pirate or do without instead.

Also, as many already know, Pachter doesn't deserve a position as an analyst.

Posted:3 months ago

Patcher has never been very accurate in his predictions. Heck most posters on these forums know more about how the games industry actually works than he does.

UK retail is doomed but, it really is down to places like Amazon and Steam. For instance I looked on playstation store and dead space 3 is 59 pounds. Not dollars! Pounds! At today's exchange rate that equates to Sony trying to charge the uk consumer 92.38 dollars for a digital copy of dead space 3.

From this I'll make my Patcher style prediction. The next generation is going to crash and burn if this is in any way representative of digital pricing model Sony will be pursuing and others will undoubtedly try to copy. Now I fully expwect you all to have forgotten this prediction if it happens not to come true ;)

Posted:3 months ago

Most games launch at full RRP on the PSN store, which is completely unrealistic in the UK at least, given you can usually get a physical copy for £10 or £20 less if you shop around.

But digital pricing is set by the publishers, not Sony, and some discount faster than others. Sony's own first party games are often fairly reasonable, particularly for back catalogue, and I've picked up a few old games from the PSN store for around £15-20 each, including titles from Squenix / Eidos and (sadly) THQ. Some of Ubisoft and even EA's older titles are priced quite attractively too. Some publishers and some titles keep their digital pricing unreasonably high for months or even years after release though, making them completely uncompetitive with online retail.

Launch pricing for digital definitely needs to come down though, particularly for smaller titles. I'm not sure if publishers are just being greedy, or if they're launching games at full RRP to placate retailers, but either way, as the balance shifts more towards digital they're going to have to reduce those prices if they want anyone to actually buy their games.

It's also worth noting that Microsoft has a stated policy of only releasing digital versions of retail Xbox 360 games at full RRP three months after the retail release. For example, Borderlands 2 was released simultaneously at retail and digital on PS3, but on Xbox 360 it only appeared on Games On Demand in mid December. Both services (AFAIK) are still charging $60 for it.

Microsoft need to change that policy for the next generation. Simultaneous digital and retail releases are becoming the norm, on PC, console and handheld, and Microsoft have a lot of catching up to do in this area compared to Sony and even Nintendo now, let alone Steam.

Edited 1 times. Last edit by John Bye on 12th February 2013 10:51am

Posted:3 months ago

In 2009 Pachter said: “Downloads will become 20 percent of the market within five years, and probably peak at around 50 percent of the overall market in 10 years.”

How I laughed.

Posted:3 months ago

Evidently not enough, maybe it's the publisher's analysts that are saying stuff like this that are killing off HMV and co.

May I add, that working where I do right now (for an extremely resilient sports/fashion retailer - that has managed to convince it's market that it is a necessity not a luxury - whilst I study) I can completely understand why this statement was made; He's a securities analyst. For a companies' shares to be of any value to him you have to be selling stuff at three times the price of manufacture and paying everyone involved in it's creation minimum wage so the shareholders can have fat pockets and Ferraris.

Okay, slight exaggeration, but the Gaming Retail market in the UK is junk because the Gaming retailers have no USP and offer games at higher prices than the competition. That's Gaming Retail, not Gaming.

Edited 1 times. Last edit by Andrew Ihegbu on 12th February 2013 12:36pm

Posted:3 months ago

Long ago I gave up wasting time in game shops after walking away empty handed too often. Amazon&co killed the high street by offering choice and stock to back it up more than with price. If you're not looking for this weeks AAA big PR budget release, physical stores are a waste of time and if that's what you want you'll get fleeced for the same amount at all retailers, on or off line.

Posted:3 months ago

@James Verity You'd be surprised. The USA is currently more expensive than the UK due to exchange rates.
For example, Dead Space 3 on Amazon US is £38.58 ($59.96) not including State tax and Amazon UK is £37.91 including VAT. Also, the US charges way more for PC games than you can get them for in the UK.

Posted:3 months ago

Rick Lopez - I just think games are 2 expensive and should be priced lower like Anarchy reigns and The Walking dead. $30 dollers makes it easier to purchase games, versus $120+tax for 2 games. Most games drop in price. Hitman Absolution is already at $30. Why couldnt it be sold at $30 from the get go?

Posted:2 months ago