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NPD Sales Results for February 2016 [Up1: Fire Emblem]
- Thread starter Nirolak
- Start date
joecanada
Member
I think I was in the wrong thread. I was trying to ask why MS would be interested in giving 10% back on digital titles instead of just giving a 10% discount. Like can they do anything feasible with the License? It doesn't come off quite as a good guy move because they take back the game, but if they get nothing in return, then why bother? Why not just go full 10% discount and advertise the crap out of it or do a "buy 10 get one free" in the store or something?
Maybe sales gaf would be a better place to ask because all I got in that thread was "why do you care" or "10 is better than 0" when I clearly never argued it was bad for consumers in the first place. I just want to understand why for a business proposal this is a good idea.
Maybe sales gaf would be a better place to ask because all I got in that thread was "why do you care" or "10 is better than 0" when I clearly never argued it was bad for consumers in the first place. I just want to understand why for a business proposal this is a good idea.
Ragged Gloves
Member
Gamestop also had a trade in deal that ran 7-20 March for pro-members of $150.00 towards purchasing an Xbox One.
CosmicQueso
Member
Alright, let's work through this.
First, why 10% of the purchase price?
Well, MS receives 30% of every purchase as a royalty. Since MS is the one that would be offering the 10% purchase price back, what they're truly offering the customer in return is 33% of the revenues MS received for that purchase. Looked at that way, it's a very fair offer from Microsoft to the consumer.
Second, why is only MS' revenue important here?
Because publishers won't agree to this proposal unless it could be guaranteed that the money being refunded would be spent on that publishers' products. So only MS' revenue will be refunded to the customer for the giving back of the license.
Third, in what way is this a good deal for the customer?
The use of the term "10% of the purchase price" is key here. Say someone buys a $60 game from Microsoft. That would be $6 back. Now, as long as that original game is at $60, that's a bad deal.
However, what happens when the price of that game drops?
Say, a year later, that $60 game is now selling for $30. The customer would still get $6 back. So, instead of a 10% return, the customer is now at 20%. And if the game drops to $20? All of a sudden that $6 a customer would get back is a much better deal, right?
So why is it a good deal for Microsoft?
So you allow your license to get revoked and have $6. Where are you going to spend that $6? Right, the MS store.
But, you're not going to just spend that $6, are you? Probably not. There's going to be some game that you'll use the credit to fund the purchase of.
It's the GameStop model with different economics. GameStop claims that a large portion of trade in credit goes to the purchase of new games. Same theory here. In fact, you look at the revenues used games bring to new games and you can see how used product is a significant driver of new product purchases.
You notice that most publishers don't even talk about used games as a problem anymore? That's because they've gotten smarter, looked at the data, and agree with GameStop that, overall, used games are at worst no damage to new game sales and at best, additive.
But it still seems like a ripoff?
It might, because that 10% looks and feels cheap. When, in fact, it's not a bad deal at all. And certainly better than the current deal.
But even if it is a good deal, if customers think it isn't, well, your program ain't gonna work too well is it?
Of course, that's why that kind of thing is in a survey, and not a program ready to be rolled out to consumers.
joecanada
Member
Thanks but I got the consumer part. I'm still unsure why ms insisted on the return part rather than just straight incentive. The licence is worthless to them...
Edit great post though sincere thanks
CosmicQueso
Member
Oh.
Well thats easier, actually.
Microsoft cannot tell a publisher, ever, at what price a game can be sold.
MS can take 10% off its own games, and any publisher can offer whatever discount it wants. But MS cannot unilaterally force pricing programs such as 10% off all games. Price fixing is bad.
You'd make a good teacher, nicely done.
joecanada
Member
Ya true but I still believe that a " Goodwill" program is much more desirable as that license is worthless. So like a buy 10 get one free is a win, win... This program is like testing a consumer attachments and then you will inevitably get the old " Oh shit I wished I hadn't traded halo 5 for 6 cuz 6 suck "... When you haven't as a company gained a thing. I get the concept but it's not a good business model in my opinion. There's no reason to ask consumers to do anything. You created work and asked the consumer to give up something for 0 dollars. I get that it creates incentive to spend more but so do many other rewards programs which could easily be implemented
Not everyone sells used games, and as such, this possible program wouldn't be for everyone. For the people that do sell back their games and avoid digital for that reason, this would be a positive reason to buy digital. May not be much compared to the GameStop ecosystem, but something is usually better than nothing. Also for people who buy digitally, it gives them an outlet to sell back their games on some level, as well, without having the money leave the Microsoft ecosystem, either. You're right in that the license is essentially worthless to Microsoft. The retaining of people's investment in Microsoft's ecosystem is useful to them, though. It's not better than a B10G1 sale for the consumer, but it is a positive for Microsoft.
CosmicQueso
Member
Wow, that's very kind. Thank you.
Sure, that kind of program sure sounds like it could be much better.
The problem is in getting every publisher to agree to participate.
While Activision may sell COD on MS' store, COD isn't MS' game to sell. Meaning, Microsoft cannot force Activision, or any publisher, to participate in programs like the one you describe.
In fact, it would require Microsoft to go out and strike deals with every publisher on the store if they'd like to launch a program like you mention.
But not all publishers would want to participate. The result would be consumer confusion in which games were and were not participating.
So that's the rub. I agree with you that it could be a better incentive. However, universal execution would be almost certainly impossible.
The trade in program, on the other hand, could theoretically be done universally, since no publisher revenues would be touched.
Of course, some publishers might not like this model at all, as every license buy back would lower the potential user base for DLC and other revenue generating streams.
I'd be surprised if publishers who are digital centric didn't protest on the basis of their long tail revenue.
When a used copy of a game goes to GameStop, the person buying that used copy is the new target audience for DLC and microtransactions.
There's no cheap used copy of their digital game being sold in this scenario.
Mind, publishers can't actually stop used game sales because they're entirely legal, but this digital program does feel like something publishers could yell at Microsoft about pretty easily.
When a used copy of a game goes to GameStop, the person buying that used copy is the new target audience for DLC and microtransactions.
There's no cheap used copy of their digital game being sold in this scenario.
Mind, publishers can't actually stop used game sales because they're entirely legal, but this digital program does feel like something publishers could yell at Microsoft about pretty easily.
My gut says this is Microsoft's attempt to mitigate the "no used games" backlash from their original Xbox One plans, because they're going to try the same thing again.
AntraxSuicide
Banned
This was basically my example on another site.
Take Gears 4, coming out soon. You buy it digitally for $60, and then sell the license back for $6 (largest possible credit) in store credit. This pushes you over the line for buying something that you were thinking about like maybe Halo 5 (it was $5 too rich for you, but that credit makes it worth it). Then, in a few years, you see Gears 4 on sale for $10 and think, "Hey, that was a great time. I'd like to play that again." and you buy it.
To review: you got money back that you normally wouldn't have, so it's a win for you. MS made a net $64 selling you Gears 4, and they convinced you to pick up Halo 5 on top of it. It's a win for them as well. Basically, treat that store credit as basically being a store-wide Steam sale. It's good business to keep you hooked in the ecosystem, and it ends up making them more money in the long run.
slavesnyder
Member
I see no evil here. 10% is not a lot, but honestly, it's just a line of code, no atoms. So, it's basically worthless to Microsoft and they theoretically should have no interest or gain from this.
Of course it has advantages for MS, too:
- nice PR-coup and USP, especially when Sony doesn't follow
- good will towards customers without big loss
- motivaltion to trade in for little and buy for a lot, staying in the ecosystem
- push all-digital adoption and habituation
In the end it's a fair deal for the customers. Te alternative is to keep your digital, un-resellable backlog, rotting and smelling in your games list. I have quite a lot of titles I'd love to trade in and get a nice game or two for them.
Let's see if this good idea will see the light of day.
Of course it has advantages for MS, too:
- nice PR-coup and USP, especially when Sony doesn't follow
- good will towards customers without big loss
- motivaltion to trade in for little and buy for a lot, staying in the ecosystem
- push all-digital adoption and habituation
In the end it's a fair deal for the customers. Te alternative is to keep your digital, un-resellable backlog, rotting and smelling in your games list. I have quite a lot of titles I'd love to trade in and get a nice game or two for them.
Let's see if this good idea will see the light of day.
Me arguing pro Microsoft. I have to take my temperature.
CosmicQueso
Member
Well, if MS' iterative box is designed to support 4K, they'd sure as hell better get their box out before Sony if they want any chance at grabbing some 4K early adopter market.
It feels like both are waiting for E3 to announce stuff, but one of them should figure out that announcing early would get them the first mover advantage while making the other guys look like they are playing catch up.
What a crazy few months this will be.
Omnistalgic
Member
Will get a cheap Wiiu before a cheap Xbox. I think the problem with Xbox is how similar it is to ps4. It is either one or the other with those two systems, not both. People don't care about the handful of exclusives differing the consoles. I think X1 is going to fall way behind this year and a 4K upgrade won't do much if Sony is doing the same thing.
Ms needs to come up with something in the PC space. I think there is already too many consoles to survive.
Ms needs to come up with something in the PC space. I think there is already too many consoles to survive.
But MS does have a chance to release a more powerful Multimedia Computer that will play Xbox One games & WUP games.
If PS4K is just playing PS4 games in 4K while MS is replacing Xbox Ones with Windows 10 devices & have some with specs that can push graphics that look a lot better than what we have on PS4 & Xbox One they could put that box up against PS4.5 & gain some ground.
CosmicQueso
Member
Yep. Could be down to 1 major dedicated console mfg next cycle.
#1 factor for mass adoption is price.
Additional power does not come at 0 cost, so you have to account for that, and you also want to make sure that you remain 100% compatible with the existing software for your iteration.
So I could see both manufacturers releasing a slightly more powerful refresh of their hardware that can do 4k BluRay and streaming, alongside a few other elements (dual band wifi on PS4), but imo do not expect an $800+ Xbox or PS4 able to play 4k native games (whether at 30 or 60fps).
I fully expect there will remain 1 SKU on the market though, the new ones replacing the old (like a slim model would).
This being said, if the power difference is enough, and they are willing to risk create confusion with "Xbox One Ultra" and "PS4K" models on top of the current offering, then I would expect the current models to be priced @ $299 and the new ones $399.
It looks like we're back to pre-season.
Sony 1st party and 3rd party partners are also tearing up the charts. GT6, MLB16, No Man's Sky, LBP3, Uncharted 4, R&C, Until Dawn all in the top 50. Maybe single-handedly they don't amount to much, but it really builds up over the generation.
lightning2k3
Member
Honestly I don't see why they need to take the game back in the first place. Just implement a rewards program. Buy a game get 10% back in "points" that can be converted into play dollars to be spent on the store. That way you compete better with Best Buy and Amazon with their GCU or their Prime discounts, entice consumers to spend more, and dont have to deal with angry publishers who lose potential DLC customers. Because honestly, what is MS getting when they get that key back? The publisher sure isn't paying them and they definitely aren't gonna resell it either.
slavesnyder
Member
Biggest chance for X1.5 would be being oculus ready.
VR might not be a gigantic sales driver directly, but it will be the big story for Q3/Q4 with a lot of media coverage. And if PS4 has the monopoly on console VR it will have all the screentime for itself.
VR might not be a gigantic sales driver directly, but it will be the big story for Q3/Q4 with a lot of media coverage. And if PS4 has the monopoly on console VR it will have all the screentime for itself.
CosmicQueso
Member
Now that's a very interesting idea.
The only potential drawback I can think of is scale. Requiring active participation from a customer (they have to go into the store, select the game they want to revoke, request the credit) will only incur a fraction of the cost a passive participation program (like a rewards program) would, simply because customers are generally very lazy.
But then you could change the % from 10% to something like a credit card does with 1% or 2% back or something and that would take care of that issue.
Hmmm... I like that idea a lot!
joecanada
Member
I could see maybe a bit more aggressive approach like the ps4k is 499 and offers slight graphics upgrade (draw distance, shadows, stuff like that) and something a bit more marketable like "faster load times!!" or something they can market. maybe a little boost from 30fps to 45 for some games.... but yeah there is almost 0% chance that they will go right up to a 699 dollar PC , there's no point they tried with ps3 and the price was a barrier. The reactions in that thread are hilarious though.
Really though it just creates a healthy used market for the perfectly good ps4 launch system which I am glad because I have a couple friends who are not yet in current gen. And I would still wait and see or try to "trade up " for a hundred bucks or so....
Welfare
Member
Well, uh, this rewards program already exists. https://rewards.xbox.com/
Right now for instance, if you preorder/buy (within 30 days of release) 3 $60 games, you get 15,000 reward points, which when converted is the equivalent of $15.
You also get $15 for each game you preorder that launches by June 30th
Also, there is a MyVIP star system that rewards/gives you back a percentage of your monthly digital purchases. Free members can get as high as 5% back monthly and Gold members get ah high as 10%. How the system works can be found here.
slavesnyder
Member
One question and another one:
How sure are you that an Xbox1.5 will come?
How sure are you that a PS4.5 will come?
(thanks, welfare)
How sure are you that an Xbox1.5 will come?
How sure are you that a PS4.5 will come?
(thanks, welfare)
Welfare
Member
That's two.
I think we will see 4K (entertainment, not game) capable upgrades for these two this holiday.
CosmicQueso
Member
Oh.
I had rewards credit waiting. Well that's good.
So... uhhhh... guess that program hasn't been super effective, for me at least.
Good job, Microsoft?
Welfare
Member
Well, if you get at least 5,000 credits by the 15th or 30th of every month, it is automatically converted to currency.
Just have to do more on Live!
slavesnyder
Member
This reward program sounds rather complicated.
Get 10% back for all your old stuff is far catchier.
Simplicity is powerful.
Get 10% back for all your old stuff is far catchier.
Simplicity is powerful.
A "4K Xbox" bundled with Gears of War 4 would be a great move.
Sony rewards essentially does this.... every game,movies, theme dlc you buy on psn gets you points... sometimes sony throws a multiplyer like buy street fighter five get 3 times the points for 180 points. 1000 points equal $10 psn. It even lets you link to other stores to buy things and earn points, i brought 2 $200 pair of sneakers of finishline.com with a 5x multiplier and have already gained $20psn credit so far..... very underated system
DriftingSpirit
Member
I wonder what is the cause of the X1's drop on Amazon. It is around mid-60s now. I know the X1 was already $299 in some places but it shouldn't be going down that much because of it. I haven't checked how the X1 is doing on other online retailers though.
Either the $100 Gamestop trade off incentive towards an XB1 is stealing massive sales from Amazon, or.. the XB1 is cratering hardcore.
QB is nowhere (relatively speaking), the system is falling fast in ranks... All in spite of the biggest 1H AAA exclusive coming to XB1 in 2 weeks and an advertised $50 price drop (which was already actually in effect since Feb) on the front gaming page of Amazon...
Wonder if Abdiel could possibly give us an update about the state of things for him?
CosmicQueso
Member
So both companies have rewards systems? Learn something new every day. Guess they don't have a lot of incentive to push these programs because wow they sure don't push these programs!
I'll check it out though, thanks for the tip.
DriftingSpirit
Member
If it isn't Gamestop, it would just have to be a lack of interest overlapping with all that is going on with PS4 (recent price drop, PSVR, UC4, etc...). If so, maybe they should go $250? Something to basically force people to become interested.Either the $100 Gamestop trade off incentive towards an XB1 is stealing massive sales from Amazon, or.. the XB1 is cratering hardcore.
QB is nowhere (relatively speaking), the system is falling fast in ranks... All in spite of the biggest 1H AAA exclusive coming to XB1 in 2 weeks and an advertised $50 price drop (which was already actually in effect since Feb) on the front gaming page of Amazon...
Wonder if Abdiel could possibly give us an update about the state of things for him?
Nintendo had (but not any more) a Digital Deluxe Promotion which basically boiled down to every $50 you spent on the Wii U eshop (at least in games, don't think DLC qualified) got you $5 in eshop credit. No idea how that worked for them, but My Nintendo seems to have a similar program going on.
ethomaz
Banned
Sony reward system works fine... I have about 10k points.
The only issue for me is that they block the checkout for people outside US... even my account being US I can't get my rewards.
slavesnyder
Member
The right answer is Dead or Alive. No retail version needed, everyone goes download anyway not to be seen with this scandalous fith at the cashdesk...
Also looked at Amazon yearlies:
- surprised that No Man's Sky is there at 63 already (and has a very nice cover)
- Uncharted at 19 is very, very impressive, 5th highest IP in the charts, and not even out yet
- Cyber Sloth at 97 (hello Rex) is heartwarming somehow
- PS4 at 15, Xbox1 at 36 is a huge difference
- 1, 2, 3, 8, 10, 12, 18 are diverse PSN cards (for downloading DoA) - Xlife at 11, 16
this is very telling where the digital money goes...
- Nintendo 3DS AC adapter, Cosmic Queso Edition at 17
I don't think they will target 4K I think MS is going to make a vary smart move & switch from making Xbox games to making Windows 10 (& up) device games & have console like games that will play on Laptops , Tablets , Small PCs , Set Top Boxs , Hololens & even TVs.
demigod
Member
3.5 years with no pricedrop(bought my white wii u for $265) and they wonder why its not flying off shelves. i'll just get an NX if its bc with wii u since mine was stolen.