Iuris Proeliator
Eve University
Ivy League
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Posted - 2008.05.24 13:28:00 -
[1]
I respectfully disagree with the sentiment entirely. Something to realize, folks.
Up until now, the 90 day GTC have cost the exact same as the subscription cost, and this is the case for most companies.
However, keep in mind that with a GTC, a company is, inherently, losing some of the profit they could be making, compared to an ordinary subscription. The reasons include, but are not limited to: Design and manufacture cost of the card itself, design and manufacture cost of the box it comes in. Shipping costs, the extra work involved with dealing with retailers, and the fact that if they retail for the same price as 3 months subscription, that is AFTER the retailer has put their mark up on the product. And retail mark ups are often a surprising portion of the cost of a product, to those who don't realize it.
Think about it. A retailer has to buy a product, then pay for: Store, website, employees, inventory management, etc BEFORE it can sell the product. So, all that cost comes out of the profit from each sale. And once a product is in the retail store, that typically means that the developer/publisher/manufacturer has already been paid for that product.
This means that a retailer buys the product straight from the manufacturer, then they mark up the price to include their cost.
So, if CCP is making $39 for a 3-month subscription, that is going STRAIGHT to them.
If CCP has a card on the retail market for $39, that means they're likely only getting about HALF of that when it's sold to the retailer.
And before I hear "Well then, why don't they offer the cards directly and then they can cut out the retail cost!" Go ahead, try that, and see how the retailers react.
Not long ago, I had the privilege of attending the Sony Online Entertainment Fan Faire (That's the EQ folks, for those who are unfamiliar) and I got to listen to a lot of seminars they held. One was preceded by a quick Q&A with the SOE CFO, and one of the things discussed was prices, particularly online prices versus retail prices, and why online prices can't be significantly cheaper. Simply put, retailers won't allow it for the PC market, because they know the PC market, for now, needs them. So, the ball is in the retailers court, really, for the moment, which affects decisions like this one from CCP. I don't know about our Euro players, but the retail PC market in the US is dismal. Companies have to beg, borrow, and steal to get their PC games displayed and sold prominently in game stores, who have taken to half-ignoring the PC game market, since they can't put it into their "Sell, buy used at low price, sell used at mid-price" model.
Now, for those who will bring up online distribution, yes, this kind of thing is EXACTLY what's pushing the digital distribution model that is starting to gain headway in PC game sales. But that model, despite Valve's Steam program, is not quite there yet. It needs more time to develop and mature. With retailers acting as they do, it is no shock that companies like CCP have deals with Valve for digital distribution, but it hasn't gotten to the point where it's given them leverage with retailers yet.
Give it some time, and you'll begin to see the effects of that leverage, but until then, CCP has to play the market game, the same as just about everyone else. This step they are taking, with GTC's costing more than base subscription, is something the MMO market SHOULD HAVE done ages ago. I fully support them in this decision.
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