Video Game Industry Crashes! Just like 84' except it's 04'

defender

defender

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This may not be official news but I really wanted to vent and start a thread about this.


I believe the game industry is in a crash. One that has just started this month but was setup from the latest xmas season. I have been in the game business about 12 years and owned my store for 10. I have read all the industry books on the crash as well. I think the Best Buy $4.99 sale is the true marker of the crash. I know that I am going out of business within 2 months now. I know that I am not the only one to go out of business this year. I speak to many wholesalers and other retailers and ALL of them report HORRIBLE sales. I know that with almost nothing important coming out this summer that the xmas titles that were out will only get discounted. Consumers are fed up with the $50 prices and knowing a game will be $20 or less in a short time only delays most purchases. Ebay has created a ton of sellers but now it seems like the buyers are fewer and fewer. Sure there are still gamers. But how many of you buy games at retail level? Because of competition margins has gotten below 20% which is incredibly bad for any retail sector. Let alone an item that doesnt have returns or mark down money. When I buy 10 copies of the latest game at $42...then I own those games even if they dont sell. If they get reduced in price. I have little choice but to mark my games down to match market price and lose any investment I made in the title.


1984 there was an industry widee game crash where Atari, Coleco, and Mattel all lost millions and all of them had to give it up. Today we have Microsoft, Nintendo, and Sony. I think the face of gaming is about to change. I think it will head into an online arena where retailers only sell hardware and games are mostly downloaded. I think that 2004 will be remembered as the 2nd game market crash. My belief is that this started a few weeks ago...and continues today. It will not turn back because there is nothing that will make it do so. Retailers are gonna stop carrying many game products and online deals will get incredibly good for shoppers.

I have more to say but I think I am going to get some food.
 
Although I'm not in the retail business, I agree. All the stores I see have shrinking inventory. Whether or not that will result in a "crash" parsay is doubtful though.
 
What about the lineup GC has for later this year? Also Halo 2 will be sold at full price for alot of people. There is a huge lot of big name sequals for PS2. If this does go down it will be fixed by September. I had never even heard of sales being bad.
 
I actually use ebay alot im a seller, I found a way to get BRAND new games for 9.99$(week of releas) then turn around and sell them on ebay a little over 60% off of the 49.99$ MSRP, usually at Buy Now for 30$ or 35$ so probably about a 25$ profit. I recently picked up La pucilla tactics for free. there was a B&M deal clear in Ohio, and I live in Virginia, but Glad I know a site that or person that helps me get those awesome deals. One thing I do is not exactly not legit(no its not steal) but kinda tricking the big corp.
 
with 3 console makers and such a large amount of titles squeezed into one month it is not hard to realize why the video game market is going down the drain.
 
no no dont worry, theres some really cool consoles about to come out sometime soon... and as soon as the Phantom and ApeXtreme are out... everything will be ok.
 
hey defender, i know you're in a slump, but i too have always thought this. i too see this as a marker. i think it's gonna blow up in our faces next generation. look at how much publishers blow on X game and still want top dollar for it. games need to go back sqaure one. pure fun. graphics are for whores. i bet if retail was $30 games would fly off shelves. this $50 crap is bullshit. the only games i purchase for $50 still are most nintendo games, and games that i think deserve my $50 like gran turismo 4 and i can't think of anything else right now because most of the games i paid 50 for are nintendo games. games like halo that are good aren't worth $50. as gamers get older, i do think they are also getting more patient and waiting to save a buck or two. and there's just too many games now. i am guilty of having waaaaaaaaay too many games, and this cursed website hasn't helped any. damn you cag. damn you.
 
I think that a crash is very possible, but I doubt that most of the industry would be wiped out like back in 84, but I do think that the next generation of consoles well very possibly not to sell to the levels that the current generation has.
 
[quote name='sj41']What about the lineup GC has for later this year? Also Halo 2 will be sold at full price for alot of people. There is a huge lot of big name sequals for PS2. If this does go down it will be fixed by September. I had never even heard of sales being bad.[/quote]

People will only buy so many games... 20 big names games in the span of a month and a half will not boost games sales that much... in fact, more likely that not they will canabalize each others sales.
 
I remember the '84 crash but I dont think it's as bad right now. I think it's more a matter of too many games you want play where as before it was too many games you didnt want to play. There isnt anyone going out and burying a million ET cartridges or Enter the Matrix disks in a landfill. In '84 people just got fed up with all the games with limited goals and expensive price tags, if you asked someone to pay 50 bucks for Colecovision's Smurf adventure today you'd probably be laughed at and beaten to death.

The 18-35 target demographic isnt giving up on games like people did in the 80's, if anything we're more hardcore, we just dont have as much time to play all the games they want so we've become a little more focused as to how we spend our time and money. And so maybe we wait on some titles rather than pick up a game on launch dayevery single time. Plus factoring in the economy in general it'd seem to me a lot of people want to hold on to a little more cash so we ignore the second and third stringers untill they drop to a price we think they're worth.

Could the prices be better? Hell yes that's why we;re all here. But I'll still buy a game if the price is right and it's worth getting.
 
Sad, but true. I can see only one platform surviving the crash, and that is the resilient PC.

It sucks you're going out of business. i will make it a personal quest to get back out to your store before this happens.
 
[quote name='pukemon']hey defender, i know you're in a slump, but i too have always thought this. i too see this as a marker. i think it's gonna blow up in our faces next generation. look at how much publishers blow on X game and still want top dollar for it. games need to go back sqaure one. pure fun. graphics are for whores. i bet if retail was $30 games would fly off shelves. this $50 crap is bullshit. the only games i purchase for $50 still are most nintendo games, and games that i think deserve my $50 like gran turismo 4 and i can't think of anything else right now because most of the games i paid 50 for are nintendo games. games like halo that are good aren't worth $50. as gamers get older, i do think they are also getting more patient and waiting to save a buck or two. and there's just too many games now. i am guilty of having waaaaaaaaay too many games, and this cursed website hasn't helped any. damn you cag. damn you.[/quote]

but if they were $30....they would have to stay at $30 for that to work, otherwise ppl would just wait til they dropped down to $15 or $20
 
I loved dead mans hand for $30. It is has live play, and is a decent game. All games should be $30, I would buy a lot more. Carve new was only $20. Another live game that was kinda like wave race. Worth $20 all the way. On that day, I got 2 games with live ability for $50. Well worth it IMO.
 
Playing the other side of the coin...it wouldn't exactly be a bad thing for me. Those of us who are old enough remember all the Atari carts that could be found for 99 cents or less. Imagine picking up a couple dozen next gen games at that rate...

Let the industry cool off for a few years, give me a chance to play all the cheap games I own but have barely started. Then, wait for the second coming of the NES to revive the industry.

Of course, I'm not wishing any ill-will on the indie game retailers or the creative minds in the industry...I'm just voicing an alternate perspective.

Though, the likes of BestBuy can suck my left nut. And the right one. And the weiner in the middle.
 
It wont wipe out the developers in this crash as much as the retail supply change. Kiss the mom and pops goodbye and even places like gamestop and eb may end up going online only. What's the point of them having stores anyways?

And Pukemon..I been saying this for months. A $30 price point would be great and also they need to stop the price dropping. I am sure that won't be a popular thought here. When Nintendo controlled the pricing and supply it all went smooth but with Sony and MS flooding the market and allowing any crappy cheap game to be mass produced....it's all crap now. Games are getting to a discount level so fast now.

As for the scam that ChrisXE has going on..sure that's fine for the couple hundred a month you make for yourself and you're part of the problem not the solution. I was making over $1 million a year in sales but now I am less than half that. I don't even want to embarass myself by saying how much money I make. Let's just say if I worked at McDonalds I would make more.
 
[quote name='JSweeney'][quote name='sj41']What about the lineup GC has for later this year? Also Halo 2 will be sold at full price for alot of people. There is a huge lot of big name sequals for PS2. If this does go down it will be fixed by September. I had never even heard of sales being bad.[/quote]

People will only buy so many games... 20 big names games in the span of a month and a half will not boost games sales that much... in fact, more likely that not they will canabalize each others sales.[/quote] Good point but alot of the titles are console exclusives. So for the people who only have one console, it could work out. Alot of the games have differing types of play. Once all these games come out there should be a couple of games that everyone will want to pick up for their console.
 
that's what i'm saying stay at a reasonable price like 30 bucks. playstation 1 did pretty well when they lowered their msrp to $40 for most games. you only paid $50 for the occasional rpg. even $40 is fair for some games. there's just too much out there clamoring for my 50 bucks so i wait like alot of people do. i miss out occasionally, but with this backlog, all i can do is bitch. i think another thing hurting the industry is alot of people own 2 systems. back in the day, alot of people just owned one system. hence nintendo and sega fanyboys. now that we're all grown up, alot of us have 2, and even 3 systems. not good.
 
While a crash may be upcomming, without some production numbers I think it's impossible to tell. Back in 83-84 during the big crash companies lik Atari produced way too many cartridges, in fact they actually produced more pac-man carts then there were systems. I think that the over supply factor was the biggest reason for the crash, along with the lack of any next-gen stuff to keep consumers paying full price.

Without the production data I have no idea if companies are overproducing stuff again, so I can't really comment on that, as for the next-gen stuff, both the PSP and Nintendo DS are on the horizon, as well as some high profile titles, Halo 2, Half-Life 2, GTA San Andreas, Doom III. When these titles and the new systems come out I think everything will correct itself. The industry is very cycilical and right now we are just getting towards the end of the cycle I believe. Now if the PSP and DS flop, and these high profile titles don't end up selling, then we might be looking at another crash.
 
Yeah I am sure Halo will sell really well but the profit aint that great anyways so there is little point. And I bet that month that no one buys any other xbox game...everyone will buy halo 2 and thats it.
 
[quote name='defender']As for the scam that ChrisXE has going on..sure that's fine for the couple hundred a month you make for yourself and you're part of the problem not the solution. I was making over $1 million a year in sales but now I am less than half that. I don't even want to embarass myself by saying how much money I make. Let's just say if I worked at McDonalds I would make more.[/quote]

Is that an exaggeration, or are you serious? :shock:
 
[quote name='SneakyPenguin']Sad, but true. I can see only one platform surviving the crash, and that is the resilient PC.[/quote]

So resilient the OS needs to be completely reinstalled every few months.

The PC isn't a platform; it's an infinite range of configurations generally able to run the same software (although the results may vary).
 
[quote name='yellowaznboy'][quote name='defender']As for the scam that ChrisXE has going on..sure that's fine for the couple hundred a month you make for yourself and you're part of the problem not the solution. I was making over $1 million a year in sales but now I am less than half that. I don't even want to embarass myself by saying how much money I make. Let's just say if I worked at McDonalds I would make more.[/quote]

Is that an exaggeration, or are you serious? :shock:[/quote]

most small game stores lose money...
 
You know, I just read an article about one of the heads in Nintendo who feels there's a crash coming due to lack of innovation.

Here's the article.

I kinda disagree the article somewhat. You see dance pads, eye toys, the new DS. The problem is, for these companies to consider something like this successful, it has to sell quantities beyond any reasonable scope. And then there are great risks because some are patently stupid, like the powerglove. It's like having a million dollar movie that bombs.

First, I think there's a "media" glut. In other words, the amount of "media entertainment" being supplied is too much for the pigs at the trough. For example, rating/advertising revenue goes down on TV because more people are using the internet and video games. People buy less Cd's because they see that DVD's are more cost effective. More people are spending money on Rentals and in theater movies instead of DVD's. The industries are at the point where they have to fight for the same eyeballs. That's one reason you see such vertical and horizontal integretion these days. If DVD's are taking away from CD's, and Time warner sells both, then the impact is negligable.

Then, there's the high cost and specialization of development. The game industry is larger than the movie industry. There are a lot of great games produced. But there are great games that are flops, Like Prince of Persia and Wheel of Time. That's why there's a focus on symbol and brand name. Why make a Van Helsing where at the same price you can make Shrek 2, a proven franchise. And heaven forbid if say, Half Life 2 sucks.

Finally, I think the video game industry is artificially supported by it's price structure. CNN also did an article recently showing that stores were unwilling to cut prices on games. I mean, the deals we find here are the exception, not the norm. Most games retail at $50, $40, and $30, with value titles being $20. And there seems to be clear steps at which those prices will variate. While in PC Gaming, the price of a game is much more fluid to market forces.
 
Well right now I have 30 xbox games. I need to start trying to actually play and beat 8 or so. I'm going to try and sell about 15 games. If I'm able to sell some of my old games then I might start buying again. With summer here that shouldn't be a problem. No school.
 
Doom III and HL2 are also gonna hurt the console market since both will be HUGE pc games and many users will be scrounging up bucks to upgrade their systems. PC upgrades for these games could easily be $500...so how much money will be left to buy some ps2 game?

All the titles you mentioned are good games. Personally I dont think the DS will do that well. The PSP might but the profit is low and the price will be expensive. I also dont doubt they will be underproduced and rather hard to get for the xmas season. The PSP may help for next year but to be honest. Many places are gonna go out of business until then.

Also it wasnt pac-man that they made more of than systems..it was ET. While I dont think any one game has been that overproduced yet....I am sure that the quantity of titles released has made up for it. Any one of the games you mentioned could be the overproduced title. Will GTA really sell as well as Vice City? How about Halo 2....what if it sucks? Also you only really mention 2 games. GTA and Halo 2. Is that really all there is for the whole 2004 season? E3 just ended and i havent been hearing anything much about great new titles coming.
 
I'm intrigued by your thoughts about the market crashing. Your message couldn't have come at a better time, since I'm in the planning stages of opening a videogame retail storefront. I would like to discuss some of these numbers in greater detail with you. PM me if you don't mind sharing the knowledge.
 
I think your store is going through some hard times and you are predicting the end of the world because of it. Take a deep breath.
 
in all honesty, i see defenders point. im really sorry it had to hit you so hard.

in all truth, every gaming company could go out of business tomarrow, and games could cease to be produced, that'd be the only way id be able to play all the game i want to right now...
 
[quote name='eldad9'][quote name='SneakyPenguin']Sad, but true. I can see only one platform surviving the crash, and that is the resilient PC.[/quote]

So resilient the OS needs to be completely reinstalled every few months.

The PC isn't a platform; it's an infinite range of configurations generally able to run the same software (although the results may vary).[/quote]

If you are reinstalling your OS every few months you are doing something wrong. I had a hard drive failure on my XP and just bought a ghost program to copy the drive. I havent had to reinstall XP since I first installed it. This is the first MS Windows this is true for me ...but still...it's true. PC is a platform btw. It's the shortest way of saying Windows system. PC encompasses many aspects but it's mostly understood that PC gaming is in the Windows environment. I find it very stable and the games are 100x better than console. This has always been true. When Doom III and HL2 come out...console gaming is just for the cheap broke asses who can't afford a kick ass PC. I have a Pentium 4 3.2ghz HT system just waiting for a graphics card (which I will pay top dollar for). HL2 has got me all messed up. Has anyone seen Counter-Strike running off the engine. I watched a video of Aztec and I just about creamed my jeans.
 
[quote name='Scrubking']I think your store is going through some hard times and you are predicting the end of the world because of it. Take a deep breath.[/quote]

I am past hard times...hard times have been the last 2 years. If you knew my current status you would fucking jump in front of a bus. I aint predicting the end of the world...just a game market crash. It happens to markets. The markets dont vanish overnight...they just change..usually drastically and for the better. My only real prediction is that I will be out of business rather soon and so are many retailers.
 
there isnt going to be a crash that hurts the game companies. I agree with what Defender said about it hurting the little guys (although EB and GS are fare from momnpop shops).

Unless they can beat the chains with lower prices in the same neighborhood they'll get hurt by the flood of games that hits every other week. It's possible, I know it happens, but they make less money over all.

For instance, the place where I go (B&M) will have a game 5 bucks cheaper than the EB down the street. I'll buy the game from them but they;re very likely makeing a lot less on that game than EB would off the clueless mom buying the same game for her kid, just because she knows the store sells games and she'll gladly get in line with 5 other moms who have the same impression and never know they all could have gotten it for less.

In the end the Momnpop shops dont make much money because they have to conserve shelfspace and keep a smaller inventory than the chains because they dont get as much traffic. If they dont try to keep the inventory up then they loose out on sales when customers come in and they have to say it's out of stock because they only had 10 copies as opposed to the EB with 50 (which they have because they could afford to buy in such massive bulk that they can make even more money wuith their inflated prices).

It's all like a demonic catch 22 or something.
 
They did produce more Pac-Man's than 2600's. They mentioned both ET and Pac-Man were two titles with more carts than consoles (maybe others but those were mentioned)

this was on icon's
 
hey defender. why do you think the ds is gonna do horrible. i was surprised to see from this site and gamefaqs that the ds seems more popular than the psp for now. and the psp price is gonna hurt it alot. alot. and nintendo did real well for itself at E3 this year. i have a lot to look forward too from nintendo. for ps2, gt4 is the only reason i keep the system. and as for halo2. yeah i want it, but i'm not excited about it. i'm looking forward to pikmin2 more than halo2.
 
[quote name='defender']Doom III and HL2 are also gonna hurt the console market since both will be HUGE pc games and many users will be scrounging up bucks to upgrade their systems. PC upgrades for these games could easily be $500...so how much money will be left to buy some ps2 game?

All the titles you mentioned are good games. Personally I dont think the DS will do that well. The PSP might but the profit is low and the price will be expensive. I also dont doubt they will be underproduced and rather hard to get for the xmas season. The PSP may help for next year but to be honest. Many places are gonna go out of business until then.

Also it wasnt pac-man that they made more of than systems..it was ET. While I dont think any one game has been that overproduced yet....I am sure that the quantity of titles released has made up for it. Any one of the games you mentioned could be the overproduced title. Will GTA really sell as well as Vice City? How about Halo 2....what if it sucks? Also you only really mention 2 games. GTA and Halo 2. Is that really all there is for the whole 2004 season? E3 just ended and i havent been hearing anything much about great new titles coming.[/quote]


are you sure it was E.T, the book I have (High Score! The Illustrated History of Electronic Games) says it was Pac-Man, not like it really matters though. I see your point about Doom and Half-Life, I just lumped PC and Console together, but yeah a lot of people will have to upgrade to play those games and it will take a chunk out of their gaming budget. Yeah, other then those titles there isn't a ton of stuff comming out, but It may be enough, combined with DS and PSP to hold over until the next-gen stuff comes out. Hmm... when are the next-gen consoles comming out? I remember hearing something about 2006? If that's the case then you may be very right, I was thinking a lot of stuff would be out in 2005, but if the console makers all wait until 2006, then 2005 may be a very bad year.
 
even a possible Program set up by sony or Microsoft or Nintendo(buy 200$ worth of their products within a 3 month span, and recieve a voucher for any 49.99$ game or below)

that would reward people and even get people off their a*s to buy more, dunno might sound stupid, but that would temp me to buy more
 
Games at fifty dollars were really too much. I have been playing games for years and all they ever really exceled in was price. I had more fun with my basic Nintendo, (I can't believe I just said that). Sure we have better graphics but who wants that over good game play? Also, why pay full price for a game when it gets marked down less than a month or two later on most titles. Damn, you know how many games I kicked myself for paying full price? Sellers are looking to make great profits and me as a consumer are looking to save money. After all that's why were all here to begin with.
 
I think a good example of why the price point being lower will help is the GBA. I am no industry insider but it appears to me that the GBA does quite well and I personally think it's the only reason Nintendo is in the console business anymore. GBA games are cheaper and a lot of them I have played have reminded me of the old days because they are simple fun. I only buy one $50 game a year and that is Madden because I play it the whole year around and get my moneys worth. I think it's outrageous that you pay $50 for a game in disc format. I kind of understood it in the cartridge days because they were more expensive to produce. my question is what is driving these $50 price points. if production costs are causing it they need to streamline the process because a game should not cost roughly 3 times more than a DVD movie.
 
One thing to consider is the actual cost to make these games. Most games these days cost millions and millions of dollars and at least 18 months (more likely 30 months for AAA titles) to put out. Add in marketing, distribution and other costs (production, quality assurance, legal), and these games are just very costly. Retailers aren't making much, developers aren't making much, publishers aren't making too much, even 1st party isn't making too much. It all skittles around.

Do you know how much a publisher has to pay a 1st party to even get the game on the shelf? Usually around $7 for a new title. Now reconsider the profits you think these companies have.

Finally, games have always been at around the $50 mark. One problem is how the games industry is following the film industry. HUGE first week (or month), then dump the product. It's a huge market...if people really want the game, they'll buy it right away. The rest of the mainstream will eventually trickle in.

I'm not defending the price of games, just explaining where that cost comes from. And it's only going to get tighter for some of the lesser developers/publishers...there's no way they can keep costs in line and make a competitive product.

EDIT - You cannot fairly compare the amount of entertainment between a DVD and a game, so you cannot fairly compare the price.
 
[quote name='trustcompany1013']you buy new games at $42 each? call me stupid (and i know you will), but how do ppl on ebay sell brand new games for cheaper than that and still make profit?[/quote]

Simple: they buy the games for cheaper than that.

An eBay seller might have gotten, say, 20 or so copies of Wario Ware at Best Buy for $5. If he can sell them for $10 each, he's doubled his money.

In my eyes, the problem is simply that the market is oversaturated. The solution? Get companies to put more time and effort into a smaller number of games. Less crap, more well-made games...it's a very simplistic idea, and most likely not feasible in reality, but it might be something. Or, I might just be dreaming.

That said...there's really no way to tell what will happen until it does. I'm hoping that defender is wrong, but we'll just have to wait and see...
 
[quote name='Admiral Ackbar']You know, I just read an article about one of the heads in Nintendo who feels there's a crash coming due to lack of innovation.[/quote]

Someone at Nintendo complaining about lack of innovation...now THAT is some funny stuff.
 
[quote name='jlarlee']if production costs are causing it they need to streamline the process because a game should not cost roughly 3 times more than a DVD movie.[/quote]

You can't compare the costs to DVD. I mean, your rational is fine. Most people only care about price and that's it. But remember, for DVD's, most of the times the film or show has alreay run and made millions over seas or is in syndication or something.

Also, production costs from my understanding are skyrocketing in the video game industry. Today's games are increadibly complex and require major specialization. I mean, I wish I had the skill to build my own counterstrike mod. But I can't. I don't know how to create textures and code AI on that level and so on. Then you have to port to multiple platforms, and everyone gets their cut of the profits. Ten there's advertising in a glutted market. Also, how many great games get a 7-8 gamespot rating or an 80% gamestpot raing. They're good games, but it's almost like a death sentence for some sales. Even getting a 9 is no garuntee, like Prince of Persia, Mafia, or Freedom Fighters. How many of you had that number one on your list to buy when they were released at $50 bucks?

As an aside, I've been juggling with buying some books and seeing if I could develop a new Gold box game. Basically a new game using the 3rd edition AD&D rules but in a graphical style similar to the old gold box games from the 80's. That would be cool.
 
Just curious, but what kind of marketing are you doing defender? A lot of people make some common mistakes like overspending on yellow pages. If you want, I could give you some advice to save money and make your marketing work better. I do it everyday in my job as an account executive at a tv station. I would just need to know more about what types of marketing you are currently doing, what is working, etc. PM if you are interested in my help. It would be completely free advice.
 
I aint wrong...it is happening. The rest of you just arent financially involved. I am smack in the middle. I hear the same shit from a dozen other retailers and suppliers. The past 3 weeks have been dreadful. The BB sale convinced me. Logic dictates that they wouldnt be selling games at $5 unless there was a serious problem. It's not like $10-$20. Someone is taking a serious loss in that sale. Either best buy or the publishers (maybe a little of both). Why didnt they just do $9.99...many of those games would have sold? I think a $4.99 sale is a PANIC reaction to every day poor sales.
 
CAG is my marketing.

I am not a noob who has just opened and messed up and now I have to close. I am one of the strongest and best independents in the city. The day I close will make many other retailers wake up to the bad news. My rent isnt that bad either..its below the local market value. This is why I want to keep the store but get rid of the games. I can still make money here. I wasnt always a game store anyways. Now my store is 100% games but when I opened I had computers, porn, laserdiscs, software, walkmans, electronics, and I did computer upgrades/repair and consulting. Eventually I made more and more on games and since my store aint that big other section were eliminated. Now the reverse has to happen and I must eliminate games as fast as possible to regain capital to buy back other merchandise. If I am lucky I can get a cheap place in Brooklyn to conduct mail order. The site has shown me that I can make money (it's not a lot) but the expenses are far less.
 
[quote name='defender']I aint wrong...it is happening. The rest of you just arent financially involved. I am smack in the middle. I hear the same shit from a dozen other retailers and suppliers. The past 3 weeks have been dreadful. The BB sale convinced me. Logic dictates that they wouldnt be selling games at $5 unless there was a serious problem. It's not like $10-$20. Someone is taking a serious loss in that sale. Either best buy or the publishers (maybe a little of both). Why didnt they just do $9.99...many of those games would have sold? I think a $4.99 sale is a PANIC reaction to every day poor sales.[/quote]

I think he's right. Basically, BB probably came to the point where they falt that the amount of money it was costing them to have these games sit on the shelves more than the loss at selling them for $5 bucks a piece. That's why I think that CC did the penny deal to sell clone wars/tetris bundles. Some have said it was a mistake but I think it was just to clear inventory. And you see this in other industries.

Khols had a huge loss this holiday season, so they dumped their clothing at rediculous priced just to clear it out and make some money. Why lose ten dollars and have a shirt sit on the shelf when you can lose eight dollars and clear that item from the store.
 
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