When I was younger I always seemed to have some spare notes in my pocket, if there was anything left after spending most of it on alcohol I’d buy myself the odd game or two. Sadly those days have long since gone and I rarely even hear a jangle of coins in my pocket never mind notes, in fact I don’t have a jangle of coins in my pocket at all as my missus sees to that. the result of this is that my alcohol and game consumption is at all time low, but as we move towards the end of this year things could be about to get a whole lot worse.
There has been some worrying chatter across parts of the Internet about pressures to increase game’s retail prices for UK consumers. The pressure is coming from the consistent weak Pound vs the Euro and the inability for publishers to make any margin from sales in the UK, due to this long term decline in the UK’s currency.
The Pound has declined approximately 25-30% against historical rates compared to the Euro, in practise this means that all overseas publishers (just about all of them now) are seeing a 25-30% lower return from the worlds second largest consumer of videogames. Whilst publishers appear to have been willing to swallow this shortfall in the shortterm, they now appear to be making moves to increase the SRP of retail games in the UK.
The PSN Store actually increased its UK prices some time ago with the popular £4.99 price point falling in popularity and being replaced by £6.29, just over a 25% increase. It will be interesting to see that if the pound does recover against the Euro, whether Sony will reverse the price-points popularity moving away from £6.29 and making the £4.99 more popular again. Microsoft and its MS Points system so far seems to have weathered the currency storm with 800 & 1200 points still being the popular price point and the cost of points has so far not being increased, with 2,100 MS Points still costing £17.50.
Although 25% of £4.99 isn’t too much money and the increase in price probably hasn’t effected sales too much or maybe not even at all, It’s is a different matter though with retail games which receive a SRP of £39.99-£44.99 a 25% increase here will see SRP’s of £49.99-£54.99 which appears to be the case with Modern Warfare 2, which is said to be receiving a SRP this isn’t the case of Activision profiteering out the UK market, the increase will only see them making the same money as CoD4 did.
It’s not just Activision though, as THQ, EA and a Japanese publisher all have concerns at the continued depressed rate of the GBP. Nintendo went so far as to put the trade price of the Wii up by £20 sometime ago, although this hasn’t caused a probelm to the end user because of the high level of competition from various websites and between the two remaining big players on the high street, GAME and HMV.
Obviously games often sell for far less than the SRP, but if the trade price of nearly all retail games was to go up by 25% in the UK, I’d be surprised if retailers would be able to hold off an increase in prices to consumers, because most of their margin comes from game sales, and very little from actual hardware sales anyway.
The low rate of the GBP is ‘generally’ caused by a lack of confidence in the financial markets that investors have in the financial path the government is steering the country down and the actions they are taking to combat the recession, when compared to the actions being taken in other countries. Unfortunately there isn’t anything anyone can really do about it, until next May anyway.
If games were to sell for an extra tenner would it effect you? Would you buy less? Would you look to rent more if you don’t already? Let us know in the comments below.