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smallsharkbigbite

Member Since 24 Jan 2009
Offline Last Active Aug 20 2018 08:15 AM
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Posts I've Made

In Topic: Nintendo eShop Deals - 8/16: $1.79 Don't Die, Mr Robot!, $3...

21 July 2018 - 07:35 PM

It was $149.99 during Prime Day.

Nice buy.  I couldn't justify another 3DS, but I was tempted to grab that.  Still wondering if I made the right decision to pass.  


In Topic: Nintendo eShop Deals - 8/16: $1.79 Don't Die, Mr Robot!, $3...

21 July 2018 - 07:32 PM

I don't really get the hate on steam.  More games and cheaper prices is a big win for consumers.  Is it more difficult to find all the good games because of the crap?  Sure.  But you ignoring that steam was the platform that allowed these indie games to flourish so they could bring higher quantity and higher quality games.  If it's too stressful to spend a little time researching games and watching youtube videos than maybe you need a new hobby.  Nintendo never did a quality check on the games anyways.  Really good games like Axiom Verge took forever to get approved on the Switch while bad games got right through.

 

Reality though is that's just the way the market works.  In a growing market, there are generally fewer options and there is more individual visibility and people can make money easier.  That easy money invites competition and more vendors bring products to the market.  At some point the growth stops, prices go down, and some of the competitors can't make it because that easy money is gone.  Then the market goes through a period of rightsizing until it hits the right balance of people supplying games matches the amount of money from consumers in that market.  

 

I'm always up for new and inventive games, but since Nintendo obviously knows what the difference between a good and bad game is, they need to be more involved and more picky.

Okay, so your idea is Nintendo picks and chooses the bad and good games, choosing your games for you.  Well that takes time and money for Nintendo to staff a unit devoted to picking the good games.  What would you be willing to pay for such a service?  Would you pay a $50 a year subscription for Nintendo to limit your choice?  Do you think all the Switch owners would be cool with that because it's really an all or nothing program since the game won't be available to the other consumers?  Do you think that maybe the developers/publishers that are successful will say screw that I'm just not going to try to get games on the Switch because people know I make good games and the PC/other consoles will support me?  


In Topic: Best Buy GCU is being Discontinued?

20 May 2018 - 04:48 PM

But at the end of the day, the simple fact is that the profit margin on a game sold with GCU is virtually non-existent, despite claims to the contrary, and depending on which you go by (21% or 25%)  is between a few cents and a couple dollars.

It's true that it is small, but it's still positive if you take out the 20% discount.  So they aren't losing money by running the program.  It's also likely that because the program has used game benefits that you are also feeding more high margin business to Best Buy either through additional trade ins or through GCU purchases.  I mean I think that was my big take away, is that I don't remember Best Buy having used games at their stores 5 years ago and now they do.  To be fair Best Buy doesn't break out specific sales to that level of detail and doesn't seem to do the used sale volume of a Gamestop, but I think this program was designed to fight against Gamestop in that realm.  But it's over now.  So we'll see where they'll go next. 


In Topic: Best Buy GCU is being Discontinued?

20 May 2018 - 01:06 PM

Do the logic here. GCU was clearly never designed to make money through the sale of a discounted item - BB knew that buying 2 games would already "lose" them a dollar amount greater than annual admission. The point was to drive people into purchasing more related products like accessories, and driving use of reward certificates.

http://latimesblogs....video-game.html the study for this article (8 years old) had retailer margin at $15 on a $60 game - meaning GCU would give a profit of 2 and change, which isn't exactly going to pay overhead costs associated with a b&m

Gamestop is a public company which has financials available.  They primarily sell video game hardware and software.  Their Gross margin in 2017 was 33%.  For reference, in 2016 it was 35%.  In their initial section to shareholders they mention increases in video game hardware and software sales and don't mention accessory sales.  Depends on what you believe, but it's my guess that video game software margins are higher than video game hardware margins, thus for the 33% to hold true for Gamestop, software margins would have to be higher than 33%. 

 

The problem with the articles you post is they never really get to how they estimated the video game cost.  Reality is big companies like Best Buy get favorable terms and other potential rebate programs that aren't disclosed.  And they will never be disclosed because usually it's illegal to release those terms because the seller doesn't want everyone showing up to their door saying so and so gets it for this so give it to me for this.  It's kind of like the BOM that get released on Apple products.  Those get generally accepted as costs for those products, but according to Apple's CEO they are wildly inaccurate.   But then again, he's not legally allowed to correct those reports because his pricing contracts are proprietary. 


In Topic: Best Buy GCU is being Discontinued?

20 May 2018 - 11:22 AM

What exactly is special about this newsweek article that keeps getting posted? Besides a blatant attempt to give them clicks?

There are no revelatory bits of information to be gleaned from there. It is just speculation. Stop giving them clicks.

To be fair, other than GCU ending, all these forum pages are speculation.  It's likely the margins for Best Buy weren't huge, but until someone posts a contract that Best Buy had for buying games it's speculation that they lost money with GCU.  I mean I'm glad some unnamed person had access to distributor pricing for some unnamed company and they claim that makes them an expert.  But Best Buy likely has better rates and a few percentage points difference can make a world of difference between a profit and loss.