Ubisoft Explains Why Digital Games Stay More Expensive Than Physical
Why do digital versions often cost twice as much as physical ones in the months after their launch?
While we've come to expect digital and physical versions of games to cost the same at launch, it remains somewhat bizarre to see physical versions discounted heavily after launch while digital ones maintain their pricing. This point was raised during a Ubisoft investors call today, prompting CEO Yves Guillemot to shed some light on why this is.
During a post-earnings conference call Q&A session, Ubisoft was asked this digital/physical pricing disparity. For instance, Far Cry 4 still sells for the same $60 on the PlayStation Store that it did last November, whereas you can pick up a PS4 copy on Amazon for $24 on any given day.
"Digital is more reactive than what we put in stores, but at the same time, it doesn't react as fast on consoles than it does on PC," Guillemot said. "What we can say is that when games are older than one year, digital is a lot more dynamic on console because there are less units in stores. It's a new business, a new trend, and we think all this will get more in line with time, but for sure, at the moment you see all sorts of prices depending on who is doing a promotion for that specific week.
"If you look at the PC [post-release discount] trend, I think you will see that on consoles, but you will have to wait a little bit of time for that to happen with the same speed," he continued, suggesting Ubisoft could become more aggressive in discounting digital console games in the future.
Ubisoft CFO Alain Martinez added, "On digital we will not sell [a game] for a lower price compared to physical. After a few weeks or few months things can change, and as Yves has been saying, sometime you might have a promotion on Amazon [that is] not on GameStop, but we can also react on the digital side.
"We are actually more aggressive on the PC side where digital is very, very strong. We tend to be more conservative on the digital side for more console and more flexible on PC."
Guillemot also pointed to one other factor that needs to be taken into account, which is how many copies of a particular game are left on store shelves: "Also, one thing to consider is related to stocks; if we have stock in stores, we tend to make sure we decrease the quantity of units in stores before going digital with lower prices."
Ubisoft is hardly the only company with games this is true of; we know Nintendo deliberately sells digital games for the same price as physical ones in order to avoid lowering the value consumers place on its games. Even so, GameStop has voiced concerns about digital games getting too cheap, although consumers--at least in the US--have been shown to still prefer physical games to digital ones.
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