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Cheapassery 101 - Digital Sales

Posted by MildObstruction, 25 October 2013 · 663 views

Not sure why - probably because I've been busting my ass all morning at work and now I'm out of motivation - but I've decided to write up this little thing on why digital purchases aren't so bad and may be cheaper than you think. My logic may or may not be sound, feel free to dispute it if you like. This really isn't meant as an argument to anyone - I'm really hoping that someone might find it helpful to have a different perspective on the topic.

So there's a couple things that I believe to be true, or at least true enough.

1. Physical games are like new cars - they diminish in value rapidly except for certain makes/models. That copy of RE6 you bought on release day for $60? It's worth about $0.60 now. Some games hold value longer than others. You never know, you never have control over it. So while I totally understand why people poo poo on digital due to the lack of resale ability, usually your disc game won't magically hold value if you haven't played it in two years. Maybe I'll do another article on why buying day 1 physical is a good idea and really annoy some people.

2. A lot of things are digital only, doesn't look like it'll change. So if you like good games, you've gotta dip in to the pool somehow. It's best to be prepared. Buying digital on day 1 without a sale is never a good financial idea (nor is buying virtually anything digitally without a sale), but it's of course totally fine if you just want it. Don't forget - it's ok to spend money on things you want if it's worth it to you!

3. Digital game sales like on Steam/PSN/XBL tell a lot about how far prices can push to get a couple bucks out of an old franchise. Steam and the Humble Bundle have been extremely telling on this front - the amount of money those bundles bring in from people that probably wouldn't have bought them otherwise is staggering. It's the whole App Store mentality - getting a shitload of people to buy something en masse for 0.99 is just as good if not better than getting far fewer people to buy the same thing at 2.99.


Right. So, buying digital. I'm going to use the recent spat of PSN sales with the 'Spend $50, get $10' promo in effect. This has been a pretty good run of sales and I ended up going in deep (mostly because there was a lot of stuff I wanted), but it exemplifies why digital ain't so bad.

Below is my total list of already bought and planned purchases from the Capcom/Sales of the Dead sales along with the PS+ prices (no, I won't factor in the PS+ cost for simplicity, but if you want to add it in on your own it's $3.33 for the full month of sale benefits when you get a sub for $40).

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Street Fighter X Tekken - 13.49
Okami HD - 6.99
Bionic Commando Rearmed - 3.49
Bionic Commando Rearmed 2 - 3.49
Final Fight - 3.49
Walking Dead (Vita) - 9.79
Alien Breen Trilogy (3 games, Impact/Assault/Descent) - 5.75
The Last Guy - 2.00
Persona 4 Arena - 19.99
Bioshock - 5.00
Dead Space 5.99
Puppeteer - 19.59

Total - 99.08 = 100.06 for 14 games (after a couple 0.49 avatars or something to make the difference)

Average price / game - $7.15 + $20 SEN credit
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I prefer to do large sales like this as sort of a bulk purchase on paper - spread the cost across all games purchased. When you do that, it can really help diffuse some of the higher end stuff or can make you look twice at some of the cheaper stuff that has to come up to make the difference. Since these games have no resale value whatsoever, there's no value in keeping track of their individual prices past the point of purchase since you can never make it back.

So depending on how nutso you are with this stuff, you can then include the $20 SEN credit purchases you make in the future in to the overall price/game equation. In this case, $7.15 / game is reasonable for about that half that list, but certainly overpaying by at least a little on the other half (that falls under the 'personal value' category - I have no issue paying $7 for Final Fight but others would). So, say I was able to get 3 more games with that $20 credit (which is realistic given the good PSN sales) then the overall price/game would come down to $5.88 which is definitely looking a bit better. It's just important to _not_ take the $20 off the original total since that's incredibly inaccurate (and most people tend to double dip, saying 'well I really only paid $80 for that $100!' and then a month later say 'I'll buy this since it's basically free with that $20 credit from the promo!' No. Guys. No. Come on.

So, then you're sitting at a hypothetical $6 game. Depending on your comfort level with the ownership* of digital games some people could stop right there. BUT, if you really want to find the total value of your purchases, you have to determine where the PSN credit came from in the first place! And that takes a level of discipline or tracking that requires more effort.

You flippers out there should already have a good idea of what your own set of rules are. My personal set of rules:

0. All physical games are assigned a value - you can't spread the value across them like I did above (except in the case of bXgY sales). It just makes it way too hard to accurately and fairly do any of the below, and we don't want to cheat ourselves.

1. Any store credit->credit flips need to be at least a 25% return, preferably better.

2. Any cash->credit flips should be around 100% return whenever possible. Sometimes I'll cheat on this for straight gift card purchases (like the amex statement credit deals where you can buy $75 in gift cards from Staples and get $25 back) especially around christmas time since we do most of our christmas shopping on amazon

3. Any cash alike sales (ebay, glyde, private, etc) need to return at least the original purchase price, preferably better. I'll often cash out a physical game on ebay towards a digital game (example above - original bought Dead Space on disc for $7, sold it for $11 bought it digitally for less than $7).

4. Anything that can't meet these guidelines stays on the shelf until an opportunity to make it happen arises or I get sick of looking at it at which point it goes to the thrift store and is written off. This almost never happens to me, but I'm pretty ruthless about cutting stuff from the shelves to keep this alive (I'm looking at you, Brutal Legend).

I tracked this for a few years to make sure that I was maintaining my own guidelines and stopped once I felt comfortable I wouldn't cheat myself. I know now that if, for example, I get a $50 PSN code from Amazon or Best Buy, that comes from a source of approximately $25 cash value (due to rule #2). If you follow the chain of credit moves all the way back to the originating cash it's usually much lower, but that's a safe guideline for me. So the $100 I spent on the PSN sale above? $50 cash value on my books - and that would make a price/game of $2.94 (assuming the $20 SEN credit buys 3 games I'm interested in). Would've been better if I'd snagged them from Best Buy when they were $45, but oh well. $3 per game is still definitely within my comfort zone of splurging on things that have no resale value.

As with all things, your comfort levels and ways of assessing these things can and will probably vary from mine. Hopefully this little dissertation helps you cheapasses look at things a little different and maybe you can embrace digital sales you may not have otherwise taken advantage of. If not, at least I'm only 2 hours away from ditching work for the weekend.




To be fair, the whole 2nd half of your argument does nothing to really support digital, because anything you spend your flipping gains on is going to have that same 50% off ratio.

 

I also don't like to combine transactions in my thought process.   Say I turn $20 cash into $50 credit at Best Buy.  Cool, now I have $50 to spend at Best Buy.  End of transaction, I earned $30.

 

Now I can buy stuff at Best Buy.  They have a Blu-ray sale for $10 each, so I buy five of them.  Those blu-ray's cost me $50.  End of transaction, I spent $50.

 

I would never say I bought those 5 blurays for $20 because, in my mind, I didn't.  That's just my thought process though. I had $50 to spend on anything at Best Buy, and I chose to buy those blurays.  I don't like to take my flipping profits into account when spending.

Totally fair, and for me normally I wouldn't either unless I'm really hurting for some justification. I think there's four basic arguments against digital purchases:
- It's too expensive for what you get
- I can't resell it
- I can't keep it on my shelf for eternity
- I don't own it

#1 and #2 are really the target here (since #3 and #4 can't be reconciled with digital purchases ever), and the only way I can think of to help relieve the pain of the perceived cost of digital is to work towards seeing the total cash cost end to end. I think most people (my wife included) look at a credit balance and think of it as fair game, like it was a gift from grandma (it doesn't help that we use the term 'funny money' or 'spacebucks'). So, while -I'm- perfectly content with getting that whole list for $6 each, someone who isn't might want to take it a step further.

Completely true that you can apply that same rule to physical goods - if I picked up Prototype 2 from bby for $10 credit with gcu coupon it could be looked at as a cash value of $5, and then, following my own rules, I could guiltlessly sell it for $5 for a break even. But I generally wouldn't.

The argument obviously isn't that everyone should go all digital either, that'd be dumb if you have any interest in saving money. Unless you don't buy games and just subscribe to EU PS+, and then you're smarter than I am by a mile (kilometre?).

p.s. I'm amazed that you managed to read that whole gigantic bag of hot air I posted.

Totally fair, and for me normally I wouldn't either unless I'm really hurting for some justification. I think there's four basic arguments against digital purchases:
- It's too expensive for what you get
- I can't resell it
- I can't keep it on my shelf for eternity
- I don't own it

#1 and #2 are really the target here (since #3 and #4 can't be reconciled with digital purchases ever), and the only way I can think of to help relieve the pain of the perceived cost of digital is to work towards seeing the total cash cost end to end. I think most people (my wife included) look at a credit balance and think of it as fair game, like it was a gift from grandma (it doesn't help that we use the term 'funny money' or 'spacebucks'). So, while -I'm- perfectly content with getting that whole list for $6 each, someone who isn't might want to take it a step further.

Completely true that you can apply that same rule to physical goods - if I picked up Prototype 2 from bby for $10 credit with gcu coupon it could be looked at as a cash value of $5, and then, following my own rules, I could guiltlessly sell it for $5 for a break even. But I generally wouldn't.

The argument obviously isn't that everyone should go all digital either, that'd be dumb if you have any interest in saving money. Unless you don't buy games and just subscribe to EU PS+, and then you're smarter than I am by a mile (kilometre?).

p.s. I'm amazed that you managed to read that whole gigantic bag of hot air I posted.

 

To be honest, I skipped over some of the flipper stuff you wrote because you sound like an extreme flipper compared to me.  I'm definitely flipper-lite and only go for easy sure thing flips that require little to no effort (like free games from Best Buy).  Other than that I really enjoy reading other (smart) people's opinion about digital games.  I own a metric shit-ton of them (well, I did at one point) and all the Xbox shit that went down with me give a unique perspective on digital content.  Haha I'm also scared shitless to redeem one of my EU PS+ one month codes to check out MGR:R cuz of the whole Xbox thing.  But oh well, it will be cheap again soon enough.