Welp, it’s a new year. The holidays are over and it’s time
to get back to our trudging daily lives. If you are anything like me, however,
you have lots of new games to play thanks to holiday deals like the Steam sale.
The Steam sale was very good to me this year, and even though I only spent
about $50, I’ll have games to play for the next six months.
Interestingly though, most of the games I bought were not
actually through Steam itself, but rather through a number of sites that sell
Steam product keys, sites like Amazon, Green Man Gaming, and Gamers Gate. I don’t
have anything against directly giving Steam my money, although it’s not like
Gaben needs anymore of it.
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| You beautiful man, you. |
I buy these games from other retailers because they are
offering better prices. How does that work though? It’s not like the product is
any different at all, either way you just get a Steam game. You would think
that the same product would be the same price everywhere, maybe a few dollars
difference, but on cheapshark.com you can find prices at some retailers at half
the price of others.
These crazy discrepancies in prices are the result of the
magical new system called digital distribution. See, when you buy a physical
item, say, a television, there are a lot more costs than just the manufacturing
the television itself. Cables have to be bundled up, instruction booklets have
to be printed, packing materials have to be put together, the whole thing has
to be shipped, and so on. Someone is paying for that shelf space it sits on for
six months waiting to be sold too. All of these costs add up, and create a sort
of “minimum price” that the object can have; the lowest price that television
can be sold at while still covering all of those costs, but digitally
distributed games have no minimum
price. Sure, there’s still things like bandwidth, but for a big retailer like
Amazon, the bandwidth consumed by one purchase is inconsequential, literally
fractions of cents.
For these big online retailers, sales like this create this
interesting parallel version of reality, where they are making more money off
of things like advertising space and loyalty programs than they are off of the
product itself. That’s why you’ll find crazy deals, like Scribblenauts
Unlimited for $7.50, where everywhere else it was over $20, at certain
retailers but not others. That money they are discounting off the price of the
original game is worth less to them than the customer loyalty, website traffic,
and sales numbers. Amazon and sites like it are only able to give consumers
those kinds of deals because the product is effectively just a code in an
email, rather than something that has to be stored and moved.
This of course leads to a very interesting situation, what
do you charge for digital goods? After all of the production cost is recouped,
does it matter? We’re through the looking glass here people, basically all
entertainment media has gone at least partially digital. How long will it be
before we are taking virtual museum tours in our own homes, thus eliminating
the need for real museums? This is
just for entertainment media too, what happens in the future when Star Trek
style matter replicators exist? Can you just go down to the store and have them
replicate you up a new television for pennies at a time? Or better yet, have
their replicator make a new replicator for you,
so you can make whatever you want whenever you want.
It’s a fun thing to think about, but in some ways, the
future is already here. Then again 80’s movies predicted we’d have flying cars
by now, so I’ll take what I can get.
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