Why New Video Games Are Always $60 at Stores
Consumers are often told that competition will cause prices to come down in the free market.
However, that logic doesn't apply in some markets, such as new video games, reports Kotaku.com.
Video game brick-and-mortar stores usually don't undercut each other on prices, thanks to some behind-the-scenes price-fixing by video game publishers.
According to The Consumerist, almost all stores sell new video games (on the week of their release) for $59.99 because, if they don't, those stores will find themselves "out of favor with the publisher for future shipments."
This type of price-fixing agreement is called a "minimum resale price maintenance," which guarantees the video game publishers a certain amount of profit. Meanwhile, the stores get a reliable number of customers.
But the customers are the ones that pay the price (literally) unless they are willing to wait and wait for prices to go down.
The good news is that customers can catch a break at digital distribution hubs such as Steam or by being subscribers at online sellers like GamersGate, GOG and GameFly.
Amazon has reportedly adjusted its prices accordingly to Steam's markdowns.
Of course, all this online purchasing may ultimately send brick-and-mortar video game stores down the same drain as record and book stores.
However, these online price breaks do not apply to Xbox Live and PlayStation Network games as Sony and Microsoft sell their games directly.