What Your $60 Really Buys

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Seven dollars of a $60 video game purchase covers expenses for games never even sold. That's according to a breakdown of retail game cost by an on-demand games service.


OnLive, of Palo Alto, Calif., says that $7 covers, on average, "returns." That's the cost associated with returning unsold inventory - essentially, sales that don't meet expectations. By this analysis it is equivalent to the royalty paid to the platform holder - Nintendo, Microsoft or Sony.

By far the largest portion is to the publisher, nearly half of it. As it should be. But 25 percent of a game's cost is the profit to the seller. That is a very nice margin, and it - plus the fudge factor on the returns, hint at how discounts on some new games can be justified even at release.

Anatomy of a $60 Video Game [Los Angeles Times]



Go Digital and the retailer margin dips to nil, distribution costs go way down, returns become null and void in costs, and royalties would change.

You all were paying $45~60 for Batman AA. The cheapest I saw it hit was close to $35.

I got it for $25 on PC through Steam.

That's the same tale told of many titles like Borderlands, L4D2, Bioshock 2, and more.

For Box Hording folk, Digital = cranky pants. For Gamers who want games and experiences, digital distribution = Money saved! :)