Search Results for consumer surplus

Surplus Deficit

Last week, Keen blogged about a tweet that should be filed under “Things that make you go Hmm… not really”:

In a world of $5 lattes a game with 50 hours of content is worth $1,000. Instead, many won’t touch a game until some stupid Steam Sale. (source)

Wilhelm has already penned an exceptionally good take-down of the latte vs game comparison. What struck a cord in me the most, though, was this follow-up tweet:

The unwillingness to pay what a game is actually worth is why we have on disc DLC, F2P, micros for single player games, season passes, etc. (source)

This, my friends, is the embodiment of everything I warned about six years ago.

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We as consumers have been beaten down so often and for so long that the argument almost makes sense. It seems “fair” that someone gets paid a proportional amount for the benefit received. But the funny thing is that reasoning only ever seems to go in one direction. Price exceeds the amount it costs to create? Capitalism, working as intended. Benefit exceeds the price? Suddenly there’s a whole lot of hand-wringing and articles about Millennials killing functionally useless industries.

Fight for your own Consumer Surplus! The difference between how much you paid for something and the amount of enjoyment it provided is yours. That’s your profit, not the game company’s. These corporations will try to erode your consumer surplus with ever more novel monetization schemes, and other people might try to guilt you into “supporting the devs” or admonish your “unwillingness” to throw your hard-earned money in a hole for literally no reason. But the fact remains that it’s the game company‘s responsibility to effectively manage their own resources, to figure out what payment models they should utilize, etc. Not yours. Their business is not your responsibility.

Don’t settle for the precise intersection between Supply and Demand. Don’t let anyone make you feel guilty for getting a deal. If you want to donate extra money to random devs in some idealistic hope they generate future value, go for it. But understand this: the only person looking out for you, is you.

Inflation

Amidst all the gaming sales this holiday season was a surprise. A most unwelcome one.

First was the surprise that the PC version of the Final Fantasy 7 Remake (FF7R) even came out. I was so giddy when the original news came out in 2015, but that giddiness has been tempered by years of self-restraint from not purchasing a PS4 to play just that game, and the constant endeavor to avoid spoilers. Somehow that avoidance must have led me to disregard news articles that the PC version was coming out. The fact that FF7R is an Epic exclusive also didn’t even register. But that’s because…

Secondly, seventy what-the-fuck dollars?!

I understand that FF7R is by no means the first to try to raise the hitherto $60 price ceiling of games. Many games of this new console generation are trying the same, including major franchises. It does seem a little weird that the PC port of a game that came out 1.5 years ago is trying to sell at a premium price though. Especially since one could purchase the PS5 version of the same PC bundle (main game + DLC) for $39.19 straight from the Playstation Store. That’s the winter sale price, of course, but there are cheaper options at GameStop and presumably other retailers.

I also understand that gaming companies have technically been raising prices this whole time via DLC and microtransactions and battle passes and deluxe editions and so on and so forth. Some have made the argument that it is because of the $60 price ceiling that game companies have employed black hat econ-psychologists to invent ever more pernicious means of eroding consumer surplus. That argument is, of course, ridiculous: they would simply do both, as they do today.

What I do not understand is gaming apologists suggesting inflation is the reason for $70 games.

Sometimes the apologists make the argument that games have not kept pace with inflation for years. One apt example is how Final Fantasy 6 (or 3 at the time) on the SNES retailed for $79.99 back in 1994. That is literally $150 in 2021 money. Thing is… gaming was NOT mainstream back in 1994; the market was tiny, and dominated by Japan. When you are comparable in size to model train enthusiasts, you pay model train enthusiast prices.

Gaming has been mainstream for decades now. Despite ever-increasing budgets and marketing costs, games remain a high-margin product. FF6 may have sold for $150 in today’s dollars, but FF7 sold three times as many copies for the equivalent of $100 by 2003*. So how does an “inflation” argument make sense there?

“The costs for making games have increased!” I mean… yes, but also no? Developers like to pretend that they need bleeding-edge graphics in order to sell games, but that is clearly not the case everywhere. For one thing, indie developers have been killing it with some of the best titles this decade with pixel graphics and small-group passion projects. Stardew Valley sold how many copies? Remember when Minecraft sold for $2 billion? Not everyone is a big winner, but the costs of game making has only increased in specific genres with specific designs. Do we really need individually articulated and dynamically moving ass-hair on our protagonists?

And that’s where the “iT’s iNfLaTiOn” folks really lose me: who gives a shit about these corporations? I wrote about this 8 years ago:

As a consumer, you are not responsible for a company’s business model. It is perfectly fine to want the developers to be paid for their work, or to wish the company continued success. But presuming some sort of moral imperative on the part of the consumer is not only impossible, it’s also intellectually dishonest. You and I have no control over how a game company is run, how much they pay their staff, what business terms they ink, or how they run their company. Nobody asked EA to spend $300+ million on SWTOR. Nobody told Curt Schilling to run 38 Studios into the ground. Literally nobody wanted THQ to make the tablet that bankrupted the studio.

Why should we take it as a given that PlayStation 5 games cost more to develop? A lot of things in the economy actually get cheaper over time, regardless of inflation. Things like… computers and software. Personnel costs may usually only trend upwards, but again, someone else made the decision to assign 300 people to a specific game instead of 250. Or to scrap everything and start over halfway through the project. And somehow these companies continue making money hand over fist without $70 default pricing. So I find it far more likely that the price increase is a literal cash grab in the same way the airline industry added billions in miscellaneous fees after their bailouts and “forgot” to remove them after they recovered. Basically, because they could. Some informal industry collusion helps.

In summation: fuck the move towards legitimizing $70 MSRP. That 14% price hike is not going to result in 14% better games with 14% deeper stories and 14% more fun. In fact, it’s probably the opposite in that you will just afford 14% fewer games. And unless you got a 6% raise in 2021, you are already eating a pay cut on top of that.

Oh well. Waited this long for FF7R, so I may as well wait some more.

Sandbar

What a crazy 1.5 months. Huge work initiative is coming to a close, I passed a certification exam a few days ago, and things are approaching what might be considered whatever normal amounts to be.

So, let’s shill some more for Game Pass:

  • Subnautica: Below Zero
  • Superliminal
  • Sable
  • Tainted Grail: Conquest
  • Medieval Dynasty

I mentioned it before, but basically my gaming life consisted of Hearthstone, Fallout 76, and Slay the Spire for the last few weeks. Not because they were the best games I had at my disposal, but because they were accessible, low-effort time-wasters that kept me (relatively) sane. I cannot guarantee that much will change at first, though seeing the above games available for free* is giving me a nudge in that direction.

Although I have heard mixed reviews on Subnautica: Below Zero, I never dug deeper into why things are mixed. Not necessarily for the sake of spoilers, but because games end up changing so often post-release that what people complained about originally may no longer exist by the time I get around to playing. All I know is that you apparently spend a bit more time outside the water, there is some kind of vehicle that handles like shit, and the devs turned the game into a sequel instead of DLC to the original because money and they got tired developing water games. Considering I spent 61 hours enjoying the first game, my bar is relatively more forgiving for even a v1.5 game that costs me nothing.

Superliminal looked cool and sometimes that is all it takes to get on my radar.

I heard an interview with the band Japanese Breakfast on NPR, talking about how they wrote the soundtrack for Sable. At one point they mentioned how their favorite childhood memory was playing Secret of Mana with their father, and NPR then overlaid the opening theme in the interview… and that was it. I was back in the 3rd grade coming home from school to my Super Nintendo playing A Link to the Past, Secret of Mana, Final Fantasy 6, and Super Metroid for the 30th time because I got precisely two videogames a year and those were it. Funny how advertisers spend tens of millions of dollars keeping my eyeballs on the screen for more than two seconds, and a goddamn MIDI from 25+ years ago rockets past it all.

Before work stuff consumed my life, I was on a real roguelike card game kick. One of the options I was an inch from buying was Tainted Grail: Conquest. Instead, I bought Deck of Ashes and (ahem) burned out a bit on card games. Aside from OG Slay the Spire. Seeing Tainted Grail on the Game Pass certainly makes me retroactively applaud my decision to take a break.

Finally, Medieval Dynasty is one of those survival-esque games that was on my radar, then wiggled inside my radar after SynCaine’s review, then shorted out my radar once I realized that the price jumped upon full release. Which… I get it, you want to reward the early adopters. At the same time, if you are going to game theory me into buying an unfinished product at a lower price and hoping things work out, you should expect some hesitancy on the back end if I miss the “deal.” It’s not about the $5-$10, it’s the principle. Or not, because I can play for free on Game Pass.

Things are weird for everyone else too, right? Like we went from the worst possible timeline with F2P and loot boxes everywhere, to Game Pass and Epic Store weekly giveaways and people seemingly giving a shit about Consumer Surplus in general. This is exactly what competition is supposed to do, but I nevertheless keep listening for when the music stops.

PC Game Pass Price Doubles

I just received an email from Microsoft that the Game Pass is coming out of “beta” and will be increasing in price from $4.99 to… $9.99. This price increase makes it… still cheaper than the $12 legacy Humble Choice subscription, of which I have paused for the past five months in a row. It’s more expensive than EA Play ($4.99) but still cheaper than EA Play Pro ($14.99).

Will I continue to subscribe to Game Pass? Absolutely.

Looking at my account history, I have given Microsoft $60.96 over the last eight months. The two biggest games I played were Outer Worlds and Metro: Exodus, but there were a slew of “smaller” titles like Carrion, Into the Breach, Children of Morta, Nowhere Prophet, Forager, and Undermine. I’m looking forward to playing Spiritfarer, going through Halo: the Master Chief Collection, Astroneer, Grounded (I may wait until it’s out of Early Access though), Ori and the Will of the Wisps, Frostpunk, and possibly Disgaea 4.

The above isn’t taking into account the games on the service that I already own elsewhere. Fallout 76, My Time at Portia, ARK, Dead Cells, Dishonored 2, Don’t Starve, Final Fantasy 15, Hollow Knight, No Man’s Sky, Slay the Spire, Stellaris, Subnautica, The Long Dark. Shit, I just realized how many crafting/survival games I could have gotten for (relative) free. Oh well.

I don’t know why I continue to shill for this service, other than perhaps to reassure myself that this is actually a thing that exists in this world. I have long railed on the concept of Consumer Surplus and how gaming companies have systematically been extracting every last ounce via DLC, Season Passes, Loot Boxes and so on. This trend towards a Netflix model for gaming has been the one bright spot this decade, it seems, eclipsing even the Humble Bundle model before it.

Will it solve all our (gaming) ills? No. Stellaris is on Game Pass but just as the base game – it still has $100+ worth of DLCs in typical Paradox fashion. Same with ARK. But there is a natural tension surrounding extra purchases for “rented” games such that I can see perhaps a higher-tier subscription beginning to include DLC. Or maybe Microsoft will be dicks and force you to purchase the game years after launch for near MSRP to get continued use out of already-purchased DLC.

Nevertheless, companies will need to make the base game worth experiencing if they hope to grab gamers’ attention without leaning on the Sunk Cost/dissonance of ownership. Not every game is going to be on Game Pass, but I absolutely believe that there will be more of these subscription options from other companies, the same way that Netflix is no longer the only, ahem, game in town.

What Competition Looks Like

After nearly a year, we’re starting* to see what actual competition looks like.

Outward_Sale

A bargain at… the same price?

Outward has been on my (Steam) wishlist for a while, despite the lukewarm reviews. During this Winter sale period, it is the same price both in Steam and the Epic Store. In a tie, victory goes to Steam. However, the Epic Store is currently running a promotion where you get a $10 coupon applied to the first game you buy that costs $14.99 or more.

Ergo, Outward on the Epic Store costs $5.99 and thus was bought there.

Outward_Sale2

First blood. I hope it’s worth it.

This is indeed the first time I have spent money in the Epic Store, despite technically owning 28 games there. I suppose this means I will have to turn in my Steam fanboy card, eh?

…if only I had one. The only brand I’m loyal to is Consumer Surplus. After a year of dicking around with pernicious exclusivity deals, Epic finally came around. As I said in that post:

As a reminder, none of this exclusivity bullshit is necessary. Epic could simply undercut the Steam price by 5% forever AND grant developers a larger percentage of the cut, and I would buy all my games in the Epic store. I do some ridiculous shit to save $1-$2 after all.

In this case I saved $10, which is absurd, comparatively. And it appears that each time you redeem this coupon, you get another one. There does not appear to be a limit either.

The real difficulty at this point is determining what other games are out there that I would possibly want to buy. It’s a bit hard remembering because the Epic Store still doesn’t have a wishlist feature in a gaming storefront in 2019. No, seriously:

Wishlist

We’re working to bring Wishlist to the store. You’ll be able to wishlist any offer on the store and you’ll be notified of sales or promotions for that offer. This has been previously listed as work-in-progress development, but is requiring more work than originally planned. We’ll keep you up to date as we move the Wishlist feature along.

That “minor” detail aside, most everything else comes down to bigger titles that don’t have deep (enough) discounts in my mind. For example, Borderlands 3. After the coupon, I could pick that up for $28.99. But… is that really a deal at this point? Having already waited this long, I may as well wait some more. Same issue with Control, which has gotten some good word-of-mouth. By the time I get time to play these games, the Spring Sale will have sprung and the price will likely be less. Plus, you know, this Epic coupon is valid until May for some reason. Time to hurry up and wait.

* I’m vaguely aware that the Epic store might have already had a similar $10 coupon deal back in the Summer.

FridgeGate

So here we are again: another Fallout 76 patch and another controversy. Unlike the previous patch in which a bug existed in the new raid that could delete all your character’s worn items, the focus of collective ire is on… a $7 fridge in the cash shop.

FO76_Fridge

There is also technically a robot that (slowly) collects junk for you too.

Reddit, of course, is having none of it. The fridge itself does not add to Stash space, but allows ~15 food items stored inside it spoil 50% more slowly. There is already a backpack item that you can earn via gameplay that has a fridge mod option (90% reduction) to slow spoilage of all food in your inventory, and there is a Perk under Luck that does likewise. Nevertheless, this is Pay 2 Fridge Win:

hypnotoaster01
What happened to no pay to win?

imprezobus
It lost

…or is it? There have been some counter-current threads poking fun at the absurdity. Many of those people have been accused of being (paid) shills, as if Bethesda had otherwise demonstrated the level of sophistication necessary to coordinate an effective PR campaign of any kind despite every possible evidence to the contrary.

Between the extremes are more sensible concerns. For example, the general idea that Pay for Convenience incentivizes inconvenient game design. Or how the mere existence of these items permanently close off design space, because anyone who bought one would get rightly pissed if there was a 90% freezer added to the game later. I would also include under “sensible concern” the question of why there wasn’t a trashy, rusted out fridge added as a sidequest reward that anyone can get while the pristine $7 version peacefully exists in the Atom Shop.

It is a fair question to ask why we’re bothering to talk about this at all. There is a general, background radiation-level of concern around microtransactions and cash shops, but the primary impetus to rage was the simple fact that Bethesda said the Atom Store would be cosmetic only.

Here are the tweets from Pete Hines:

PeterHinesTweet

Or did they?

There is another Reddit post that highlights the fact that the context around the above Tweet matters. Specifically, the now-deleted question was asking whether someone could buy a legendary minigun from the Atom Shop, and Pete Hines replied “No. Only cosmetic.” In other words, specifying that one cannot buy guns, but only cosmetic skins for guns.

The “cosmetic only” takedown continues in this extremely well-sourced post that essentially shows that Bethesda never gave any particular indication that cosmetics were the only thing slated to arrive in the Atom Shop. The stress was no competitive advantages and no P2W items. When people questioned the existence of Repair Kits – which allow you to repair gear instantly in the field – Bethesda responded with allowing different versions to be found in-game, and stated “If we find that Repair Kits do offer any sort of competitive advantage once they are available, we will make any changes necessary to ensure that advantage is removed.”

In fairness, there are some counter-arguments in that last link that show other contexts in which Bethesda employees have stated “cosmetic only.”

For myself, I find the entire argument complex and interesting.

First, I have a longstanding hatred of microtransactions and the erosion of Consumer Surplus that results. You see this in Fallout 76 with the fridge and the junk robot that could have been in-game quest rewards, but you also see it more broadly… everywhere. Guild Wars 2 is an egregious example of how the fashion endgame is essentially co-opted by the gemmed endgame. Sure, you can technically farm in-game gold to turn into gems to purchase new armor models, but why all those extra steps? Because shareholders.

On the other hand, a fridge and repair kits are about the most benign bullshit that I can imagine getting worked up about. Yeah, something something boiled frog, but Bethesda has been exceptionally communicative regarding fan feedback to changes. It doesn’t stop them from slamming their dick in a car door every patch, but I am not getting a nefarious vibe here. Last patch they added an in-game Atom Shop kiosk despite the fact that everyone has to click through an Atom Shop screen on game startup. After fan outrage, that in-game kiosk was removed with the very next patch.

Second, it’s fascinating from the “they lied!” angle. Let’s put aside the question of whether they really lied or misspoke or whatever. Are developers allowed to change their minds? Probably… not, right? A Tweet or interview from before the game was released saying one thing and a change in strategy (to get more money, mind) would rightfully be considered a Bait & Switch. There are X number of people who would not have purchased the game at all if they knew there was a possibility of P2W items down the road (not that these are P2W by any stretch).

On the other hand, Bethesda brought all this up in an April 2019 blog post:

We read tons of feedback and suggestions from the Fallout 76 community, and Repair Kits were a popular request that we wanted to get into players’ hands. We also felt we could try out something new with these, both in-game and in the Atomic Shop. As we look to the future, we’re exploring ways we can bring other community-driven ideas to the game as well, such as refrigerators for C.A.M.P.s, ammo and food converters, and even the ability to send scrap to your stash without having to head home. Repair Kits are our first attempt at a utility item like this, and we plan to make adjustments based on your feedback, so we hope you’ll share your thoughts with us when they go live later this month.

Five months ago, utility fridges were on the roadmap. At some point we are going to see “ammo and food converters” and chances are good that we are going to be here again, having the same conversation about P2W when they come out too. Probably still absent any sort of indication about what someone is winning for having paid.

I’m conflicted with the whole thing. Part of that is probably because I actually really enjoy the Fallout survival game experience, and hate seeing Bethesda snatch defeat from the jaws of victory every patch. Another part is a sort of reflexive “Fake News!” reaction when everyone piles on the game just because that’s the game we pile onto now. It used to be No Man’s Sky and now it’s Fallout 76 until something else comes along. I thought it was still Anthem’s turn, but whatever.

I would say none of this matters and go on my merry way playing the game, but that’s not how games work these days. Even though Fallout 76 is very much a solo survival game for me, its continued development hinges on cash shop purchases and the community reaction to them. Plus, you know, it’s a shame when artistic resources are spent on paywalled material when it could have been integrated in gameplay instead.

So, Bethesda, for god’s sake man, be careful with that car door.

Epic: Bribe or Bust

You are probably aware of the Epic Game Store’s predilection towards bribing indie developers with fat stacks of cash to get them to sign one-year exclusivity deals, sometimes after Steam has been giving the same developers months of free advertising by being listed (and even preordered!) on the store. That can be considered an erosion of consumer surplus or clever use of game (business) mechanics, depending on how you feel about the taste of boots. What has hitherto been unmentioned is Epic’s stick on the other end of the carrot: declined exclusivity will keep you off the Epic store.

On July 27th (Saturday) I uploaded a new trailer anouncing Steam launch date. On July 30th (Tuesday) I was contacted by the Epic Store, proposing that I enter into an exclusivity agreement with them instead of releasing DARQ on Steam. They made it clear that releasing DARQ non-exclusively is not an option. I rejected their offer before we had a chance to talk about money.

1_YW8HKZCAxiFigsVHsVTu3A

Now, maybe there is a less nefarious reason for why the Epic store “is not in a position yet to open the store up to games that simship.” Perhaps it is related to the reasons why a Shopping Cart or Wishlist are apparently impossible to implement even with bigdick Fortnite money in a digital game store in 2019. Maybe Tim Sweeney is just an odious asshole, celebrating a “multi-store future” with GOG – a competitor in financial trouble – but not with Steam, which would invite embarrassing comparisons.

The bottom line is that the developers of DARQ turned down Epic’s exclusivity deal and now they will not be able to sell their game on Epic. Because “reasons.” It makes me slightly more sympathetic to the (indie) developers of these games, as it was not just the ready cash, but also the threat of losing out on tens of millions of other eyeballs on other storefronts.

As a reminder, none of this exclusivity bullshit is necessary. Epic could simply undercut the Steam price by 5% forever AND grant developers a larger percentage of the cut, and I would buy all my games in the Epic store. I do some ridiculous shit to save $1-$2 after all. Maybe that’s Plan B for when they run out of exclusivity money?

Oh well. Let’s see how they spin this.

Subscription Pass

When the videogame historians look back on this particular monetization strata, it will undoubtedly be the Season Pass era. Or perhaps the Microtransaction era more generally, to include loot boxes, but with legislators and science slowly turning against loot boxes, I feel like more and more games will be making a hard turn into the Season Pass model.

To be clear, I am not referring to the Season Passes of yore, in which you essentially pre-ordered DLC. The new hotness is basically a month-to-month subscription. This most recently slapped me in the face in Clash Royale:

Clash-Royale-Update-Pass-royale-1147670

The new troop doesn’t even officially get released until Season 2…

Someone on Reddit wrote up all the incentives that your $5 will purchase, and the list is somewhat enticing. None of them are technically P2W, which is itself a moot point because you could drop $99 on shit from basically day 1 in Clash Royale anyway. Indeed, if you look at the package in comparison to what your hard-earned cash could buy normally, you’re effectively getting 10x-11x the normal value. Five dollars will get you 500 gems, which can convert to 10,000g or two emotes or two Lightning Chests… or basically give you 40,000+ gold, 800 more cards (including 60+ Epics) and a bunch of other stuff.

Of course, Supercell doesn’t want it to be an either/or scenario. You can do both. Having an exceptionally generous Season Pass can lure F2P players into making their first purchase, after which it is easy to make another. One of the “perks” of the one in Clash Royale is an auto-announcement in Clan chat that you purchased the pass, and thereafter your name shows up in gold coloring in chat and battling. Turns out that adding gold leaf to a scarlet letter makes it rather desirable.

The dilemma I face is the same as always: I am caught in eye of the monetization storm.

ClashRoyale_AlmostMax.jpg

Could I be any more off-meta?

As the screenshot shows, I am one Miner card away from having a fully-maxed deck. I am sorely tempted to purchase the Season Pass entirely to get that last Miner card. It would normally not be too difficult to trade for it within my current clan, but there are at least three other members currently asking for Miners themselves, and none seem keen to trust me in giving up one of their so I can max the card and satisfy an effectively infinite number of trades thereafter.

After that though… what then? I have dozens of technically maxed cards that I cannot actually max out because I lack the gold to upgrade them all. Not that I would need to max them out in the first place, considering I don’t use them in decks. The deck I have is the one I enjoy the most. The last two slots are technically flex slots, but I have tried a bunch of alternatives and found them lacking.

Would the new Fisherman legendary card be a good fit? Completely irrelevant. New legendaries may as well not exist, because I would need literal dozens of them to get them anywhere near usable levels where I’m sitting on the ladder (~5800 last season) and in 2v2. Granted, the Fisherman has some utility outside of his base HP and damage – the ability to hook and pull troops around like Roadhog from Overwatch – but I’m still not bringing that to match that matters.

In any event, the Season Pass model gives me pause. In the context of cash purchases within Clash Royale, it’s a great deal. Would I pay a $5/month subscription to Clash Royale though? Nope. It’s not a subscription though, as there are no reoccurring payments. “Cancel any time!” And yet there will be tens of thousands who do re-up every month, for the rewards or the conveniences lost.

Technically this should be positive Consumer Surplus territory… so why do I feel so dirty?

Possibly because I felt the hook twitch. Supercell isn’t reeling in the line yet, but it’s there. Subscription versus Season Pass is a distinction without a difference, and yet those who would riot about the former in their game are praising the latter. It is a trick of psychology, a stark reminder we can be tricked, and evidence that we face amoral corporations that have a fiduciary obligation to their shareholders to trick us out of as much money as possible.

For however bad loot boxes may seem, never forget that loot boxes are apparently not enough.

GameStopped

Gotta love this news headline: GameStop’s stock in free fall ‘as business burns to the ground‘.

Couldn’t happen to a better company, am I right?

Still, I am a touch concerned. As the article notes, GameStop revenue is down as more and more gamers rely on digital purchases and streaming services than physical games. It’s been more than five years since I bought an actual physical game, myself. But it is vitally important to me that physical gaming continues to exist because otherwise we consumers lose the ability to resell our games.

While there have been attempts to make inroads in digital resell, the lack of recent headlines leads me to believe things have stalled. The most recent article I could find was from last year, wherein a new storefront (sigh) was going to be launched that could allow digital resell based on blockchain technology. Except, you know, the consumer’s own cut was going to be only 25%.

Which kinda makes GameStop look downright charitable in comparison, yeah?

In any case, if GameStop goes away, I am not entirely certain what fills the gap. There are a few off-market used game stores in my area, but none of them have any particular web presence or meaningful sales. Perhaps we will see more eBay storefronts open up, but where are they sourcing the games? My fear is that once GameStop goes under, there won’t be a big enough lobbying voice to dissuade game makers from pushing an all-digital future and thereby removing one of the last bastions of gaming Consumer Surplus.

Epic Shenanigans

In case you haven’t seen the news, the Epic Store has poached another timed-exclusive game release: Metro Exodus. The wrinkle this time is that rather than being planned from the start, Deep Silver must have been given a fat stack of secret cash because the game was already available on pre-order from Steam (which are still being honored, until removed from the Steam store). And, you know, the game was all set out to be released in 2.5 weeks.

I mentioned “fat stack of secret cash” because while the revenue split is more generous in the Epic Store, they are actually doing the only thing I said would matter in the competition space: Metro Exodus had its MSRP lowered from $60 (on Steam) to $50. Which means the gross revenue from this game would be:

  • Steam = $60 * 0.7 = $42
  • Epic = $50 * 0.88 = $44

That calculation demonstrates how a developer could still make a higher profit on the Epic store by dropping the price to $50, but here’s the thing: they are going to be losing a non-trivial amount of sales for not being on the PC’s largest storefront. Enough to matter? Remains to be seen. The Metro Redux (aka remasters) of the first two games sold 1.5 million copies back in 2016. That would be $3 million more in Deep Silver’s pocket if they sold the same amount of games… at full price… as the remasters of the last two games combined.

That $2 difference between revenue is 4.5%. If Deep Silver sells 4.5% fewer copies due to not being on Steam, then they lose almost $3 million. I mean, without even doing much calculations, you gotta know that for every Steam sale lost, they have to sell 22 copies in the Epic Store to break even. Ergo, I suspect that Epic was waving something more than simply the 88% cut in Deep Silver’s face.

And that’s kinda the baffling thing about all this. I’m not opposed to competition between companies, especially when it results in a gain in consumer surplus. Competing on price is a huge deal, and I’m sincerely amazed that Deep Silver pulled that trigger to sell at $50. But… why then yank the title from Steam as a “timed-exclusive release”? That isn’t consumer friendly or useful to anyone at all. Why not let the same title be purchasable on both platforms, and allow nature to run its course?

We’ll have to see how things shake out a year from now, when the game is finally released on Steam… presumably at a huge discount because it will have been a whole year.