Monday, November 09, 2009

Market Warfare 2

So, we are soon to see the release of Call of Duty: Modern Warfare 2, one of the most anticipated games in living memory. In honour of this several supermarkets are offering it for a bargain price of £26, less than half price.

Here is why I won't be buying.

This isn't just undercutting, this is a drastic loss leader. Selling below their purchase price in a bid to drive market share and other shopping. It's downright anti-competitive, and misleading for customers who start to expect every game to be sold at a huge loss, making real gaming shops (both big and independent alike) look like they are ripping people off.

This isn't some small retailer creating publicity to make a name for themselves, this isn't clever purchasing or out of tax cleverness; this is using market position, big bank accounts and store portfolio to get a foothold in a market in which they are usually pretty expensive (anything not brand new is rarely reduced).

Is this much different to the bus company that ran almost free buses to kill off local competition, then got rid of them and raised prices?

Happily the retailers that actually care about gamers and gaming as a pastime are too strong and have enough unique advantages to avoid being severely damaged by this ploy; but I wouldn't be surprised if it is the nail in the coffin of a few independent stores losing out on sales for the biggest game of the year.

To me it's like buying a car stereo at 75% off from some hooded 17 year old outside Halfords, you can't be that cheap and be totally trustworthy. Like paying £10 for a jacket and then complaining when it doesn't last and was made by a mistreated 3 year old in Indonesia for 12p.

Supermarkets are already killing pubs by doing this with alcohol. If we let this become the standard for games, then don't be surprised when the local stores start dying and the prices creep up.

7 comments:

David Mortimer said...

I'm pretty sure you can't even buy COD4 second hand for £26.

A similar thing happened with Fifa and there did seem to be a bit of concern from certain gamers about this policy.

The trouble with MW2 in particular is that Activision raised the RRP of the game, to see how much people would be willing to pay for it. I think this has made buying it on the cheap a bit of a protest move against them. Plus it's cheap.

Eaon Pritchard said...

yep, this has happened to the book trade for a while too.

Anonymous said...

"To me it's like buying a car stereo at 75% off from some hooded 17 year old outside Halfords, you can't be that cheap and be totally trustworthy. Like paying £10 for a jacket and then complaining when it doesn't last and was made by a mistreated 3 year old in Indonesia for 12p".

It's nothing like that at all.

Rob Mortimer said...

David: True, Activision hasn't helped the situation.

Eaon - Indeed. Harry Potter had the same treatment.

Anon - Of course its not exactly like that, but there are similarities in expecting ever lower prices without there being a compromise. Here it's in anti-competitive behaviour, those it's illegal sourcing and morally suspect production. But an anti-competitive maneouvre can be morally questionable, and to that extent I believe it is at least a bit similar.

domconlon said...

Agree completely Rob. This sort of thing is an abuse of position and will be damaging, in the long run, to consumers. When we eliminate competition we put ourselves at the mercy of whichever store wins.

One thing I'm curious about is whether they will be raising prices at some point to recoup the loss they're making or whether they hope to make it up from other purchases us hapless sheep will make once under their bright lights.

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