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One small point: profit on retail games are at most 7% and frequently no higher that 3 to 4%. We often saw brick and mortar stores lose money on new releases as
by mrweasel 5y ago
One small point: profit on retail games are at most 7% and frequently no higher that 3 to 4%. We often saw brick and mortar stores lose money on new releases as advertising and try to upsell electronics. Clothing, toys and electronics do have much higher margins. Toys are at least 40% and I worked with a team dealing with eletronics, if they couldn’t make at least 50% they didn’t want to deal with it. Gaming console is the exception, here margins are 0% or less.
- AnIdiotOnTheNet 5y agoI stand corrected. I was only second-hand aware of the kinds of markups you see on physical goods like toys and electronics you see in B&Ms and didn't realize that software was different.
- mrweasel 5y agoPlease note that those 3-7% margins only apply to games. I never dealt with other types of software. To make money on reselling games from Blizzard, EA and others you have to be an insanely talented buyer and have very little overhead.
- judge2020 5y ago> Gaming console is the exception, here margins are 0% or less. For reference: https://www.gamesradar.com/ps5-is-being-sold-at-a-loss-but-has-generated-record-gaming-revenue-for-sony/ https://www.gamesradar.com/ps5-is-being-sold-at-a-loss-but-h... For both game consoles and phones (mostly on the iOS side) the post-sale revenue is part of the overall profit scheme - PS5 hardware is sold very near-cost but all the money Sony makes off PSN and their cut of game sales becomes profit. Apple makes up-front margin from the hardware but also expects profit from in app purchases - if that wasn’t guaranteed, they might raise prices to make up the difference. Is it anti-consumer? Probably, for both the game console side and the phone side since the consumer ends up indirectly paying more after purchase.