Tenchu, Software is a group of mini-monopolies, games , apps etc are all copyrighted and so others cannot just copy it like a clone maker can with a PC. This leaves each one in a small niche and it must live or die on it's merits. Those that die are long gone and they represent the drop in prices you mention....ever see the old games bin at the computer store or the bundleware in system packages?. The successful games do Ok and sell, the others fade fast. In PCs a clone and a name PC can have the same specs and performance as well as reliability, but the clone will be 20% cheaper than the name brand. As the clones get better then get and deserve as good a name as the name brand and take share forcing the name brand to cut prices to the premium point that people will pay for the name....above it they buy the chevy, below that they buy the name brn. This point varies with the person. the rich buy name only in most cases and the poor buy clones most of the time and the rest of us are in between somewhere.
The pricing of games and apps take into account the money that kids/users have to spend and market research probably tells them there is a sweet spot in the $40 area. These are not needed things like the OS, they are desires and so they try to get a price to the end user that leave enough for the retailer and the distributor and for them and does not scare off the kids.
Games makers have wanted lower prices, but many distributors will not stock without certain sale prices and margins having to do with shelf space costs etc. It is the same with groceries. If a company cuts it's retail price by 50% many places will not sell it as the profit per inch of shelf space will be 50% less. There is a complex game played here with shelf space.
I think we will see a revolution in SW sales soon via downloads.
Look at it this way. An app is made and it costs $5 for the book, box and CD and they want it to sell for $50 retail, so they sell to the distributor at $25 who sells to the retailer at $33 who then sells it for $50. After a year they have made 100,000 packages and shipped them to distribution and half of them sold and the rest came back for scrap. So each one cost $10 since the scrapped one was in there too so they made $15 on each one and had freight etc to deal with. Contrast with direct mode sales. They sell for $9.95 and sell 500,000 due to better demand at a lower price point and they make $5 million, less server costs and some support costs, compared with $750,000 via packaged sales. The retailer and distributor are gone away. The same works for books. I have been trying to get a direct mode publishing model going for a 2 years that goes direct to the reader from the author, the publiehers want to do it as witness the recent Steven King release by his publisher and it works very well there too, but ty are too greedy, they want the book to sell at the paper prices to save their enormous investment in that old method. It just needs a copy protection means to stop duplicaton...which is available and soon the e-books or e-boox will start to make headway.
Bill |
