A little more background is that Amazon wants prices “lower” than retail books basically. They stated that books should be around $9.99 instead of higher prices Kindle users normally see by big publishers. They justify themselves with two great examples. The first being that ebook publishers simply fail to adapt. By publishing ebooks the publishers cut out costs of things like no publishing costs, no paper, no ink, etc…
The second reason is that by lowering the price, the audience grows. If say your book is priced at $15 and you sell it to 100k people, you could lower it to $9.99 and sell it to 150k people based on market demand. The added audience not only makes up for the “lost profits” from lowering the price, but it actually brings in potential for added revenue.
The number one excuse from publishers (according to publishers writing blogs on sites like Huffington Post) is that customers simply change the prices based on demand already. Less people buying something would lower the price, but since people are buying the product at said prices they remain high. Which is true and all, but how small does that audience have to be for them to lower the price? Amazon clearly watches the statistics of their own store and sees great potential and wants to fix the problem.
I hate to be bias here, but as a consumer and small publisher/author myself, I have to say Amazon is on to something much bigger in general. Publishers are simply mad for two reasons. The first being Amazon wants to cut into their profits to offer a better service, clearly a problem. The second being Amazon is attempting to “steal” authors from publishers by offering to deal direct with them, instead of through a publisher.
Too bad. Amazon had clear points on their side and I’ve yet to see a good argument from the opposing side. If a book is selling well at a lower price and still generating plenty of profit, then what’s the issue? Publishers, not authors, simply want more money. I have not heard a single excuse to attack Amazon beyond the publishers not wanting to be demanded to lower prices.
That translates over to the gaming industry in almost every way. The first being the biggest example, the failure for publishers to adapt to the electronic change. They cut costs, yet the consumer sees none of these cuts. Why should a retail product and an electronic product be the same price? It simply does not make sense. We actually went over that in a recent article. (http://www.cinelinx.com/games-culture/item/6188-digital-games-are-a-secret-price-increase-for-gamers.html)
The next being that publishers are not needed in the digital age because these companies can deal with the creators themselves. We are seeing that a lot recently with Sony and Microsoft offering deals to indie studios. These studios then get a chance to hit a big audience and no publisher stepped in anywhere. They don’t need to spend massive amounts of money getting it on store shelves, and publishing to digital platforms is rather easy. Will you gain a upfront check from a publisher? No. Will publishers creme you with advertising? Probably. Yet how many of these indie games would even be given a chance by some publisher? Hardly any.
A great example of this is PlayStation Now. Many people have constantly complained about the prices in PS Now, but Sony has replied on several occasions that it is not their fault. They simply listen to the publishers and are forced to list prices they are given. Why are year(s) old games nearly full price? Even movie publishers have this problem. Why was Netflix and Redbox forced to either raise prices or stop offering certain movies? Publishers. Because publishers think you will buy it at those prices, and if just the right audience falls for it, the price sticks. Perhaps Sony and Microsoft need to flex their guns too. They want a digital age to come and a lot of sales to pass through them, so why not follow Amazon’s lead? You have to remember publishers are not in it to offer you games, they are in it to make money off those games. Someone needs to step in and say “slow down” at some point.
People still prefer physical games for many reasons, but a big concern is prices. You can get sales and discounts at retail, but these games hardly ever “cost less” on digital streams. Why? Why are we paying $60 dollars for a game that has no case and has cut costs galore, but never passed the discount to us in any way? Well Amazon already started the war, if they do indeed win, we must remember they are beginning to tip their toes in the game industry so who knows what will come of it!