And how would it? What exact motivation would publishers and MS have to make the games cheaper?
You answered it down below, when you said competition.
Look at iOS, where games are Freemium - $5 and no dev is putting out something for $30. You get enough competition and it creates a ceiling and it's now possible to price yourself out of the market.
Let me ask you this, did CD's come down in price once they became the dominant form over cassettes? I mean they were cheaper to make than tapes... and yet some how the price never went down. Why? Because there was no reason for them to reduce the price. Just cause their costs got cheaper didn't mean they passed on the savings, they charged what the market would bear, not a certain amount over what it cost them. The market was ok with the higher prices so they saw no reason to lower prices. Only when digital became popular and they had to compete did you see prices lower (and by that time CDs were on their way out).
Part in bold is my whole point, except replace CD with any type of physical media that can be digitally distributed.
And CD's weren't disruptive to cassettes because they were the same exact data in a cheaper physical medium. They were disruptive because they were higher fidelity. People were buying them because the sound quality was superior.
It's only now that everything has been reduced to 1's and 0's, that we can worry about whether we want that digital data packaged physically or off the internet.
In what world are you in? I wish they were. In general, they aren't.
On Day 1, publishers release hard covers. eBooks are always cheaper than these.
Some time later after they've milked all the hard covers, they release mass market copies on cheap paper, which are priced lower. These can be cheaper than eBooks, which is what I think you're getting at, and it's that way because of the agency pricing model, where the publishers set the price and don't bother pricedropping their eBooks in conjunction with the mass paper release because they still act like the eBooks are competing with hard covers. So basically there's a digital price disconnect right now between the hard cover/mass paper pricedrop. Eventually once we're past this whole pricefixing thing and the eBook market fixes itself, I'd expect eBook pricing to mirror the pricedrop.
If you are willing to deal with a lot less selection. I like Netflix, it's great if you can find stuff on there you like, but anytime I am looking for a specific movie, they don't have it. It's only that I was able to look at their library and find stuff I would watch that I use it. Plus, let me add, they had competition (rental stores) so they had motivation to offer a good value.
Blockbuster's old model was $4 for a 2 day rental, per video. So I rent 4 movies, that's $16.
$16 on Netflix is unlimited streaming plus unlimited disc rentals of all movies. That's better value for your dollar.
I don't know, I haven't tried buying a CD lately. But it's only more recently that MP3 albums were that cheap. Last I checked they were the same price as their CD counterpart (but as I said, I haven't tried buying one recently).
At this point one could argue they are more expensive cause they aren't that popular and so they have to charge more to make it even worth offering it in CD form.
Kanye West search on Amazon - every MP3 album except Yeezus is cheaper than the CD. Yeezus is the same price and that's because it just dropped and Amazon is trying to optimize CD sales by offsetting a lower price with high volume. Its in their best interests to do this because whatever CD's they don't move they're gonna have to pay for in the form of inventory costs. Later after volume goes down, they normalize the prices again and it'll look like all the other albums, where digital < physical.
And there are trade offs for that (having to deal with Steam's DRM). And once again, they have competition (boxed copies, other stores to get games). It's not that they are cheaper to make that makes those games cheaper, it's the fact they have competition and need to offer a better value to get customers.
You are ignoring the fact that most of the ones that you are right on (That they are cheaper), it's because they have competition. A game on a console really doesn't. Especially if you want to use MS's proposed restrictions that would get rid of competition to buying digitally (That's pretty much what they were trying to do, force physical discs to be digital). There would be no competition to keep their prices low.
Yeah DRM is a trade off and reaction to it just snowballed and killed off potential game changing digital distribution for this next console generation. Far as consoles though, I think competition is pretty healthy. 3 competing platforms that have all pulled a profit every console generation. And they're all dependent on the same third party IP that would've been subject to competitive pricing. If MS got its digital model to work, it could've priced the digital version of the next BF or COD $10 below Sony's, which would've had to follow or be priced out of the market. We'd have a driver for lower cost games.
