Stores Up Prices After VAT Rise

Sure, back in July we were told that games retailers would be taking the hit from the then-recently announced rise in VAT and not raising prices, but now we’ve actually got to it, it seems like that might have been a little bit of a lie. We’ve engaged the TSA Re-pricing Confirmation Force (yeah, I went outside) and checked out the three major high-street games chains to see how hard the new rules will be hitting your wallet.

As it turns out, not so hard: of the three stores we checked, two had indeed upped their prices slightly, but the other had seemingly stuck to their guns and not adjusted the RRPs of games. The main point though is that there are no massive price jumps, and those that have increased theirs have listened to the words of Activision’s UK MD back in July: “In this industry retail tends to work in large price steps rounded to the nearest £5. Is it likely £39.99 will become £40.84?” said Andrew Brown. “Perhaps the VAT change will drive retail to re-think the large price steps being used.” Most of the price increases are indeed only a pound or so.

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GAME appears to be the store with the most adjustments, with a lot of the new releases and chart games now up to £40.99 from the usual £39.99, and the same also applies to all of the recently-released Kinect titles. In addition, those big releases like Call of Duty: Black Ops and Gran Turismo 5 have gone up from £44.99 to £45.99. Gamestation appears to be doing much the same, and although my local store hasn’t got round to pricing up yet, online reports say that new releases are now £40.99, with the Move Starter Pack now up from £49.99 to just over £50. Assassin’s Creed Brotherhood and Black Ops were both £45.99 in my branch, though. HMV is the winner out of this one, not upping any of their prices past last week’s levels. Having said that, they still like charging a good £45 for most games out in the past couple of months, so maybe they’re not your best bet for a bargain.

On the plus side, online retailers seem to be keeping to their guns, with Play*, ShopTo and The Game Collection all keeping their prices the same. GAME, Gamestation and HMV’s websites also still have prices at the £39.99 level, not matching the new, higher in-store levels.

So, if you’re looking to avoid the VAT increase, your best bet is still, as usual, to shop around online before heading into stores. Of course, it’s likely that once the current “sales” finish up, we’ll see more games heading up to the new prices.

Are the retailers where you are raising prices to match the new level of VAT, or keeping pre-rise prices and taking the hit themselves?

*Editor’s note: Play are based in Jersey where VAT gets a bit weird. As the Channel Islands are not part of the EU, companies based in Jersey can sell goods on the British mainland without charging VAT at 20% per cent.

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56 Comments

  1. Well there will always be a competitive price on the internet, just means more internet and less high street shopping.

    • Nothing I have ordered online in the past couple of weeks has arrived though. Seems Royal Mail have a huge backlog due to the snow and im starting to get a bit fed up of having to wait so long when I could go into a store and get it instantly just for a few extra £’s.

      • Yeah I’m waiting on stuff too but at least we don’t have to battle with the weather and pay the instore prices.

  2. Interesting seeing as they only passed on the VAT cut for the 1st fortnight, before pocketing the rest for the next 50 weeks

    • also, online retailers are surely selling for a profit too – so that shows you just how much profit there is to be had in the sale of each copy. Seems to me the VAT-rise was just welcome cover for something they wanted to do anyway. competition will win out though, and even higher pricing will ensure that online sales grow whilst bricks & mortar sales continue the downward spiral

      • the vat reduction in my opinion was put in place to help buisness rather than the consumer, most small buisnesses kept prices the same which reduced their vat bills which in turn helped them out when sales where lower than normal.

      • Oh most definitely the VAT has risen to help business. Im not saying that its a bad thing per se, but it definitely hasn’t been done to help the likes of me or you .
        I would also bet my house on the fact the Corporation Tax for large businesses will be cut from 28% to 25% in the 2012 budget announcements later this year, therefore effectively giving large businesses a 0.5% rise in next years profits, because lets face it the VAT is not going to go down

      • VAT has now risen to the European standard of 20% and our corporation tax is amongst the highest in the G20 and bringing it down will make it the amongst the average, the thought is that it makes the UK more attractive to do business, presumably with the aim of creating jobs or job security.

        My point was that an online retailer was selling NfSHP for £23, they’re not going to be making a loss there is still going to be profit in that amount, so when another retailer is charging £39.99 for the same product, there is more than enough profit in the item to swallow the rise themselves, at least in the short term.

        A rise of £19.99 to £20.99 is profiteering and such greed should be highlighted

        also the change from 17.5% VAT to 20% VAT doesn’t equate to a 2.5% rise in prises as its actually less than that as its the cost price that increases not the ticket price

      • i was under the impression most new releases had like 3-5 quid profit in them at retail, which is the main reason most indies are either dead or have dropped new releases for preowned only?

      • GAME have increased the prices on certain consoles including the 360:

        http://www.game.co.uk/Consoles/Xbox-360/Xbox-360-250GB/~r349710/

  3. game hmv amazon all have bases out in jersy as well now i think as its impoissble for them to compete online for games/dvds/music if they dont.

  4. Good thing I managed to buy GT 5 Signature Edition for £39.99 and a PS3 250gb with ModNation Racers for £169.99 before the VAT increase on the GAME website! :P Ah, I love being a bargain hunter lol.

    I hope GAME stores suffer, they deserve it for some of the prices they charge. Although I hope the GAME website continues to prosper as you can find some great bargains as demonstrated above.

  5. It’s weird seeing platinum games going for £20.99

    • ….and well above a 2.5% VAT increase!

  6. Gosh, are the major recently released games really £45 now?

    Recent purchases for me have been Heavy Rain and Uncharted 2 at £12 each, games I would consider to compare favourably to the most recent releases.

  7. What will happen to all the 99p and £1 shops now.

    • lol, good point!

      Also, wont the shops have bought all their junk pre-VAT increase, or is VAT paid backwards for them, i.e. they pay the VAT on goods they sell rather than the stock they buy???

    • Poundland will have to be renamed to One Pound and Two Point Five Pence Land now! :O

    • Nothing… everything the buy costs pennies to 50p at the most and they’ll swallow it easily.

      Also, most VAT-able items have 150-200% mark-up so most retailers will swallow it, however games are lower margin than most of retail

  8. I’ve got lots of boxed SNES and MegaDrive games from the early 90’s with various original price labels ranging from £29.99 to £44.99. On the whole I don’t think game and console prices have shifted a huge amount in the last 20 years.

    • exactly, I remember that nearly all releases on the N64 were £49.99, and that wasn’t just for premium games!

    • I have a SNES magazine from ages ago with a feature about the original Donkey Kong Country. They had prices listed at the sides from various retailers and if my memory serves me, Toys’R’Us were flogging it for £55.99!

  9. It won’t be games that are affected by the VAT increase, it will be the TV’s, the surround sound systems, the gaming chairs. An extra quid is nothing added on a 35 quid game, but a £1000 TV..

  10. I’m gonna be a bit contravertial. If prices are too high, save your money and wait til they drop!

    • I totally agree, I dont think Ive ever lived in a world where I can get a game for as cheap as I can these days.
      Frugal Gaming and Post A Bargain are amazing for video game deals. Unless you absolutely have to have the game on release then modern gaming can be quite cheap.
      I got MoH in December for £17.99, you can’t say fairer than that

      • “I totally agree, I dont think Ive ever lived in a world where I can get a game for as cheap as I can these days.”

        Well, my old ZX Specturm games used to cost £3.99, £7.99 or £9.99 depending on how big the release was; but yeah, other than that games are the cheapest they’ve been in years.

      • Follow @ukgamedeals on Twitter, or check out CheapArseGamer (same site), they are the best for deals.

    • I agree , there where only 2 games i have bought fullish price (£34 on the net) in the last 12 months that where bought new (most where used for under £15 ) and i expect the same to continue in 2011 .
      Thanks to HUKD (Hot Uk Deals) i get so many great deals and have saved a fortune . Heck thanks to one of the deals posted there a few months back i can rent any game out on a wednesday for 7 days for only £1 so i get the games like Enslaved , Vanquish , GOW III etc and finish them in a week unless their crap !
      I bought over 20 games last year and probably 10 on the PSN store . Too have only bought 2 new games (GT5 and BFBC2 incidentally) shows that im doing nothing to help the games industry i so love , sad but im on minimum wage so not my problem as i just do my best to get games as cheaply as I possibly can and where is the harm in that .

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