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Ars: Gamestop - 75/25 split Disk to Digital PS5 Allotment
- Thread starter Deleted member 2379
- Start date
What do you mean they'll never get back the loss on most sales? People have to buy digitally which is a huge boost to revenue.
The graph shows ranges of 2:1 - 7:1 and averages out to 3:1.
It's a good point - I wonder if they'll want to sell digital codes again now that they have a Digital Only console making up so much of the market. I figure it would be more lucrative overall to do so even when taking into account a bit of a retailer's cut into the math of it, but I'm not a Sony accountant.
Oh look, that's exactly what I said would happen, but many vehemently disagreed on this very common sense business practice...
Yep this makes sense and when they started production they wouldn't be sure of relative demand so going with more disc versions than estimated for launch is the better strategy. It'll all sell out anyway, retailers are happier with the disc version and Sony take less of a loss on it. The $399 digital is pointless when demand > supply anyway, its from later on next year when they need to keep demand up where that lower price tag will help a lot.
Yeah
IGN poll has the largest sample size (138k)
20% are interested in the DE version
I found myself almost caving (and possibly caving still) to a disc drive i do not need just to get the console.
I'm frankly very fucking disappointed that they didn't offer more of the digital editions. I do not need physical media or that $100 tax
I'm frankly very fucking disappointed that they didn't offer more of the digital editions. I do not need physical media or that $100 tax
I honestly hope the S doesn't take too much of the pie . If it's significantly lopsided towards I fear 3rd party won't prioritise X as much.
After all why would retailers want to sell a console that provides them with a minor profit and then customers are never to be seen again
Unless it's in one of those big bundles, nah. They sell out pretty much instantly.
This reminds me of the PS3 launch where they had the cheaper sku just to say the price starts at at 499 but they were much harder to find so 599 was basically the price. I figured the same would happen with the digital edition where it mostly exists to say the price starts at 399.
Also discredits all those that said Sony would push the digital more because they make more off digital purchases. Half the people were already all digital so there was no reason to take the additional loss on the hardware.
Also discredits all those that said Sony would push the digital more because they make more off digital purchases. Half the people were already all digital so there was no reason to take the additional loss on the hardware.
The only money that they earn 'extra' on a digital only console is basically the retail cut of games. All other digital purchases, they would have gotten anyways on the disc-based console. That's at max $10 on a full priced game.
The average console owner buys 6-10 games in total, and that's probably on the high side for this specific console since enthusiasts will most likely buy the disc version.
So you're talking about making back a maximum of $60-100 extra on the average DE console user. Most sales are never going to get that $80+ cut back.
i dunno, i think plenty got sold today via Playstations email link.
Retailers: "Yes. We are happy to stock the lower profit item that ultimately destroys our business."
Unfortunate, thanks for the info though. I don't mind buying digital at this point considering PS3 BC was de-confirmed the other day.
Ahhh interest, thank you. How were the ResetEra polls?
I got a Disc Version preordered and one for my friend as well. Kinda want digital tho...
It's still less money overall for *any* physical location to sell *any* digital only console. It's not all Sony wanting to push the higher price point version and it's not all physical retailers wanting to push the disc using product. It's most likely some combination of both.
But for Gamestop in particular (and any other store that participates in used game sales) they stand to gain far more from the disc based consoles than the digital because they make some money on the New purchase and more money on the Used purchases. All other sales (digital codes, accessories, etc..) are equally as likely regardless of the type of console sold, so it's still most advantageous to stock and sell the disc based consoles.
It's about setting narratives. Imagine how much negativity they'd have at 500 and 559. Ps4DE shocked the world and casuals are freaking hyped. It's like people have forgotten PS5 is weaker.
The BOM reported in February by Bloomberg was $470. If you include the retail cut at a similar rate to the PS4, it comes out to around $490.
The disc-drive is a $20 cost, so subtracting that yields a cost/console at $470. So at $399, that is a $70 loss.
Since then, they've doubled production and are air-freighting millions of consoles to the US because of shipping logistic issues. All of that includes additional costs.
The most conservative estimate is $70 loss per console, but it is easy to imagine that it is higher than that right now.
Edit: correction
450 was the BOM and 470 was the estimate retail price. $60 -80 loss is more accurate.
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I think more than anything, Sony is determined not to repeat the PS3 announcement where the $599 price tag was met with dead silence.
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Just like the 20GB PS3. It let them say $499 at launch and they killed it off soon after.
It's a marketing move. They don't actually want to eat the losses so they restrict supply until BOM comes down. They want to say Starting at $399
I suspect it'll be at least 50/50.
If the PS5 DE exists so Sony can say they have a $399 box, then the XSX likely exists so that Microsoft can say they have the most powerful console.
Microsoft is embracing Gamepass as one of its main sources of gaming revenue. The Series S is almost designed to be a Gamepass machine, bought on a whim as a second machine (I'll certainly buy one down the line, so that I can play its 1st party exclusives without breaking the bank, and for its deep BC library). They'll probably try to push it more than Sony is seemingly pushing the DE.
Makes sense why retailers would order less too. People say console gamers are going all digital, but 50-70% download rates on recent games doesn't necessarily mean they are willing to give up on having the option for physical.
you will always be more likely to get a game cheaper physical due to retailer sales at a quicker pace than digital, with rare exceptions. Best Buy and GameStop can afford to take a $20 loss in say, Demon Souls retail, if it gets more ppl in store shopping in Black Friday or during post holiday retail lul in January- February.
if PS5 digital and XSS sell like 25% of consumers for the whole gen, I think that will be really telling but idk. Maybe everyone will convert, but it doesn't surprise me that consumers who mostly have to go to a physical store to get their console would want to keep retail game benefits.
for PC games, I think a lot of PC gamers got used to how they often have to order their computer parts online so they got used to no physical stores. But if you're walking into a Best Buy or GameStop and see Spider Man or Demon Souls for $20 off, and can trade it in too or give it friends, it's hard to ignore that benefit and pick the digital only options. Just imo. I don't pretend to know how the market will go.
you will always be more likely to get a game cheaper physical due to retailer sales at a quicker pace than digital, with rare exceptions. Best Buy and GameStop can afford to take a $20 loss in say, Demon Souls retail, if it gets more ppl in store shopping in Black Friday or during post holiday retail lul in January- February.
if PS5 digital and XSS sell like 25% of consumers for the whole gen, I think that will be really telling but idk. Maybe everyone will convert, but it doesn't surprise me that consumers who mostly have to go to a physical store to get their console would want to keep retail game benefits.
for PC games, I think a lot of PC gamers got used to how they often have to order their computer parts online so they got used to no physical stores. But if you're walking into a Best Buy or GameStop and see Spider Man or Demon Souls for $20 off, and can trade it in too or give it friends, it's hard to ignore that benefit and pick the digital only options. Just imo. I don't pretend to know how the market will go.
$100 is a big difference when you are talking 400/500. Moreso with the pandemic and with game price ups.
I ordered the digital edition. I'm a fanatic for not having disks.
It makes perfect business sense to heavily favor the regular PS5 for launch window shipments, same with MS for the SX.
The closer to launch a consumer buys a console, the more they are generally willing to pay. Why take a bigger loss on those sales than you have to?
The closer to launch a consumer buys a console, the more they are generally willing to pay. Why take a bigger loss on those sales than you have to?
PC is a whole other beast regarding digital-only, since it's 98% of the time the ONLY option, anyways (give or take the very rare physical DVD-rom releases).
I have one friend who will most likely go with the digital version since he's not a fan of owning physical products, yet borrows a lot from me. Even for a lot of people that are digital, or mostly digital-only, want to option for something like that. No disc drive won't allow you to borrow from friends and such. Although companies like EA boast of like 70%+ digital sold (or whatever the actual numbers were), it doesn't account to mean that those people were digital-exclusive people.
There's so many variables, and it makes sense that even if MORE digital units were produced, the sales for disc drives would still be the preferred choice, for a variety of reasons.
They aren't going to kill the DE though. The 20 GB PS3 gave them nothing other than the price point. The DE has advantages that don't go away after the launch.
Makes sense. I assume it's small profit versus decent loss here. So they have to sell it at 4-1 or so to make it break even.
bloomberg bom was 450.
digital can be 420 then because the 4kultra bluray could be 30 instead of 20 for normal bluray drive(thats why ps4pro didn't had a 4k drive..... not the same price)
sony is losing 60/80 which is more than manageable.
That's right. They won't ever kill the DE (unless market interest ends up being so low as to make that a reasonable decision). They will just keep favoring the regular SKU until when and if that starts hurting sales.
Sorry, this actually sounds correct. I think 450 was the BOM and 470 was the estimate retail price. So yeah, 60/80 sounds more accurate.
Honestly felt even lower to me. My local EB games, as in my entire city (so 3 of em) had zero digital pre orders. The Source in my city as well.
The other major retailers only did online, where the PS5 digital was sold out in, I believe, under a minute.
Can't say I'm happy with the number of digitals they have
The other major retailers only did online, where the PS5 digital was sold out in, I believe, under a minute.
Can't say I'm happy with the number of digitals they have
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I think they will also start favoring it when the BOM starts coming down making the losses less painful.
Yeah, I think it will flip over the course of the gen. To your point, demand will decide, but I think we all know the cheaper price will win the day.
Exactly.