Current-Gen Price Drop and 360 Shortage

Gamespot is running an article reporting that Activision's Robert Kotick believes that current generation games will drop in price due to the arrival of next-gen consoles. From the article: "Unfortunately for current-generation holdouts, Kotick also said that publishers will quickly shift their development efforts away from today's consoles, which has been the case in the past, when the introduction of the PlayStation 2, Xbox, and GameCube games saw PlayStation and Nintendo 64 development plummet." Meanwhile, the retail chain EBGames has announced that it has presold it's allotment of 360 consoles. From the article: "We are currently sold out of our popular Xbox 360 bundles ... Check back frequently for more opportunities to pre-order an Xbox 360."

Comments

Re:i won an...

[Pulse_Instance]

well I'll be the first to say. I hate you.

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[account_deleted]

Comment removed based on user account deletion

Out of Xbox360s?

[vertinox]

Oh hell! And I was thinking to myself how I missed out on Ebaying more DS's when there was a shortage.

News?

[Otonotachibana]

How many people out there were actually expecting pricing of our current gen games to not drop? In Japan, where production for older (Neogeo)and even defunct systems (Dreamcast) continued through several console generations, this might be news. Here in the states anyone who would pay $50.00 for an N64 game, Genesis, or Nintendo would be declared non copus mentus. Doesn't matter how well-crafted the game, the US console market is unforgiving of older tech.

Re:News?

[porcupine8]

Here in the states anyone who would pay $50.00 for an N64 game, Genesis, or Nintendo would be declared non copus mentus.

Well, until it becomes a collector's item.

EB Games and "Pre-orders"

[Gojira Shipi-Taro]

From the article: "We are currently sold out of our popular Xbox 360 bundles ... Check back frequently for more opportunities to pre-order an Xbox 360."

Translation: "We are not currently ripping people off with our pre-orders, and our minimum wage managers are incapable of gauging demand well enough for our buyers to just buy the right number of consoles, so we're going to pretend to be sold out for a while, so that when we magically "discover" more bundles about 3 weeks before launch, the drooling masses will fight each other for the right to be bent over the sales counter and screwed."

Fuck it, it'll be in the store when I go to buy it (not from EB) or it won't. If not, the money will go to some other toy this year. Besides, MS said they were producing tons so that there would be no shortages. Far be it from me to belive something Microsoft said, but in the grand scope of things, I think Gamestop/EB are being more deceptive here than the manufacturer.

Re:EB Games and "Pre-orders"

[cgenman]

"Xbox 360
SOLD OUT!
We are currently sold out of our popular Xbox 360 bundles. Check back frequently for more opportunities to pre-order an Xbox 360, Microsoft's next-gen gaming system that ships November 21."

Oddly enough, it doesn't actually say that EB itself is sold out of pre orders, or that there won't be any more available. From the recommendation to "check back frequently," it sounds like they might just be holding some back in order to try to enduce panic buying. Then they'll release the rest of their stock. Or maybe the brick-and-mortar parts of the chain are hogging all of the available presales, to be sure that they can sell some in every territory. This is all speculation, of course.

Annoyingly enough, you have to pre-order anything you want at EB: They never get more than one or two per store. It's like they have no idea what a demand curve looks like. That's why I stopped shopping there. I lost a lot of faith in EB when the copy of Zelda that I had "pre-ordered" mysteriously didn't show up with their first batch of games, but every other store in the mall still had plenty.

Re:EB Games and "Pre-orders"

[Babbster]

Annoyingly enough, you have to pre-order anything you want at EB: They never get more than one or two per store. It's like they have no idea what a demand curve looks like. That's why I stopped shopping there.

It's not that they can't predict demand, and certainly they can get more as demand rises. The issue for EB and Gamestop (though I've found my local version of the latter to be well-stocked on the rare occasions I want a game on the release date) is that their business model precludes overstocking new games and relying on the $5/unit profit margin there. Those stores are trying to stock as few new games as they can - just barely enough, especially in the first month of release, to hopefully satisfy "early" customers - and then buy back the games from customers at $5-20 a pop to sell used for $25-45.

It's a pretty simple equation if you look at a single game. The customer comes in, spends $50 on the game, then comes back in a month or two later and sells the game back to the store for, say, $20. They then turn the game back around by putting it back on the shelf for $45 ($5 off new prices, and a $5 discount in a market where nearly everyone sells at MSRP is a good deal). So, instead of making just $5 on that game, they've managed to make $10. And that profit goes up even higher if the person selling back the game was willing to take less money ($10-15 for a recent game, $5-10 for something older) or if that copy can be recycled yet again when the second customer tires of it.

Short version? Selling new games isn't a very good deal unless you're into other business. That other business for EB, Gamestop and other used game resellers is selling used games.

Re:i won an...

[Meagermanx]

Dude, I win those all the time. They're all like "Click the puppy to win an XBOX 360", and I'm all clicking the puppy. It's just that easy. Why would these people pay $400.00 for an XBOX 360? They must suck at puppy-clicking.

Not all jumping ship...

[RyoShin]

Unfortunately for current-generation holdouts, Kotick also said that publishers will quickly shift their development efforts away from today's consoles, which has been the case in the past, when the introduction of the PlayStation 2,

Except that not everyone jumped ship when the PS2 came out. For a while into the PS2 life, PS1 games still came out, because the PS2 could play them. It was a great way to break into the market for small developers- use the older technology to build a game at a cheaper cost, and let it be playable to those just with a PS1 as well as those with a PS2.

It was also a great fail safe- if the PS2 failed (and we know it didn't, nor did it look that way,) those who made the PS1 games would still be able to sell due to the massive amounts of PS systems that were sold. Even up to a year ago, the odd PS1 game still came out (at least in Japan), even though the PSOne's life time was basically over.

You're going to see the same thing this round. I haven't been following PS3 news, but I believe it's still backwards compatible, no? And the Revolution certainly will be. As far as I know, the XBox 360 still only has limited backwards compatibility- only the more popular XBox games will be playable on the 360. There will be no XBox games within four months of the 360's release.

However, as with the PS1-PS2 generation, you will be seeing releases for both the Gamecube and PS2 well up to a year or two years after the release of the PS3 and NRV. Cheap games for consumers, cheap games for producers, and the assurance that they will still have a wide audience, even with the new consoles.

This might be a big thing for the XBox 360- if everyone has to dump the original XBox, you won't have cheap-but-new games to entice newcomers or the mom that wants to get more than one game for her kid for Christmas. If the 360 does fail, it probably won't be for this, but this could be a factor.

Re:Not all jumping ship...

[ivan256]

For a while into the PS2 life, PS1 games still came out

If by "for a while," you mean "to this day," then you're correct. (Actually, I don't know if that's fair, since I think it's been six months since the last release, but it's still recent.)

It was a great way to break into the market for small developers

No, it was a cash cow for existing developers with mature PlayStation engines (EA Sports, for example), and developed demand for the PSone, which didn't come out until well after the PS2 was released.

Similarly, expect Sony to continue to manufacture and sell slim PS2s for years after the PS3 release. Don't be surprised when they sell like hotcakes at $79 either.

Re:Not all jumping ship...

[Quarem]

Actually MS announced earlier this year that the Xbox 1 would be supported with new titles through 2007.

http://www.joystiq.com/entry/1234000770039609/
http://games.kikizo.com/news/200504/038.asp

Cue Obnoxious French Accent...

[iridium_ionizer]

It's simple cause and effect.

My apologies to all French people without obnoxious accents. But really isn't this simple. Developers claim that a AAA game (with all new content - not Rehash Sports '05) takes about 3 to 4 years now from cradle to gold. So it would rational to assume that when developers received development kits for the new consoles, they did a little house cleaning.

They took a look at the games that they were currently developing and had to decide if they would rather a) release that game for a future old-gen system (with a large player base, but dwindling hype), b) cancel the game (to concentrate resources on games with more potential), or c) make the game a next-gen game by using existing next-gen tech/content they've been developing and adapting it to the next-gen developer kits technology.

Probably the bigger change will come after Christmas of '06. By then publishers/developers will have a fairly good idea of what the size and demographics of each of the next-gen systems will be for the next few years. That will determine the number, types, and quality of games released during the "golden years" of each console.

Make no mistake publishers may not know creativity, but they sure know business. I seriously doubt if any large 3rd party publisher will cast off any segment of the market right now. They will likely have a mixed basket for the new consoles to offset the risk. But they will also prepare and wait for the "good" market data to come in.

Re:Vintage Zonk

[Babbster]

To continue this offtopic discussion...

And how many stories in the games section would I get then? 2-3 a week? It is a fairly facile argument to say 'if you don't like it, leave.' I used to like it, and I want to stay.

How long have you been coming here? You just described exactly what the games section here used to be: Two or three stories a week, usually about how a game is finally coming to Linux, a company is thinking about including a Linux version in an upcoming game, or yet another rant about how gaming was so much better 15 years ago and that's why we should all be using emulators and by the way check out the cool new Linux NES emulator. Oh yeah, and least a story a month about how cool Kali is...okay, maybe I've just been here too long.

The vast majority of "fresh" videogame material on Ye Olden Interweb consists of advertisements and fluff. That's just the way it is. If you have BETTER stories, then submit them - that is, after all, how this site works. If those great stories are rejected, include them in your anti-editor rants. Then, perhaps, someone on high will care what you think.

Gamestop/EB

[HSaabedra]

As an employee (slave) of Gamestop. I can tell you that margins on new games/systems is closer to $1.00-$1.75 per unit. The store managers for the chain have no control over how many units are ordered for the store, those units are directly proportional to units reserved at each store on a 1:1 ratio or more depending on the total amount shipped to the distribution center. Why do you think we shove the sub/card down your throat.

should have been allocated more

[rishistar]

Meanwhile, the retail chain EBGames has announced that it has presold it's allotment of 360 consoles.

Should they not have been allocated more than 360 consoles? I'd have expected MS to plan on selling more than 7 per state.

I dont care.

[thelonestranger]

While all the early "I must have it the hour it comes out" adopters are killing each other and paying far to much to possess a console that wont have that many 'must have' games in the first six months, I'll be keeping myself happy buying all the discounted games and second hand games (sold for pittance by the aforsaid early adopters to fund X360 purchase) that I've not had the funds/time to play over the last 12 months. Maybe later on I'll buy a 360 but for now I've still got a whole back library of quality Xbox and PS2 titles that I havn't played yet.

Re:I dont care.

[iainl]

I'm in the same boat. I just recently did the necessary to my PS2 to play import titles, so I've all of a sudden got access to loads of great games like Katamari Damacy, Psyvariar 2 and Armored Core 9. There's no way I'm going to the next generation for a good year at least.