We should not be surprised that day one sales of video games are now beating movies. In fact, we should be saying – ‘New Movie About Blah Opens to Larger Sales Than Popular Video Game’, here is why…
For the weeks and months leading up to the launch of a major video game, the words ringing from the mouths of the video game marketing departments is ‘pre-order, pre-order, pre-order!’, which is the life blood of a video game release.
The idea is simple; the retailer offers customers who come in and pay a part of the cost of the game a guarantee that they will be able to collect the game from the day of release. Sometimes there is a benefit for doing this beyond guaranteed availability, such as a price discount, bonus merchandise or other relevant items of value to the customer.
Some retailers base their initial purchase of video game units on a formula worked out on the number of pre-orders received – if a game gets a high number, the retail chain stocks up on the number of units order, multiplied by the formula. It’s a very important part of video game marketing for a block buster.
This pre-order campaign can run for months leading into launch day, and are usually targeted at the enthusiast gamer market, but this depends on the release. The enthusiast gamer obtains a benefit from getting the game first. Not only have they been waiting for the release, but in the days of online play, are wanting to jump online with their friends and get active in mastering the game. Game communities also regularly run tournaments, ladders and other organised events where the highest level of skill is required to be successful. Having the product first is obviously a help in such instances.
All of the retailers, weeks and weeks of pre-order sales AND opening day sales, are counted on day one, giving us the staggeringly high figures reported here.
Beyond the pre-release marketing, the cost of a video game is more than a movie ticket, and on day one, sell for the closest price possible to the recommended retail price. So AAA titles like Call Of Duty Black Ops, which RRPs for $119, (however I noted it for sale at Harvey Norman for less). Within a couple of weeks, the price of the game begins to head south. The timing of this discount depends on the on-going sell through, and the time of the year. Around Christmas, a popular game will stay higher priced for longer. However, with a movie ticket, the price you pay on day one, is the price you pay while the movie is being shown.
Finally, there are more people with a console under their TV than ever before and the price to access video game entertainment is getting cheaper all the time. Xbox 360 launched in the US market in November 2005. I remember it fondly, I was one of two Aussies who was at the US launch! The Australian launch was March 2006, and the opening price was around $650. The price today for a basic Xbox is $300, and there are many available for sale second hand. So with the drop in price, there has been an expansion of ownership across all platforms, allowing for a larger customer base and more game sales.
To sound surprised that a video game can outsell a movie in total revenue on day one, is like sounding surprised you get wet when you jump in the ocean. There will be more and more games that release under this headline.