The real cost of video games for independent stores

Independent UK video games retailers are finding it harder than ever to compete with the aggressive loss-leading prices of video games at supermarkets, reports MCV.

One retailer told the trade magazine that the situation is “worse than ever”.

“Everyone is trying to have a £40 price point for the games – which is much lower than the £55 RRP,” said the indie retailer. “It’s just not happening.”

MCV says that multiple sources have placed the cost price of Fallout 4 at £42, yet larger outlets were selling the game to consumers at a loss leading £40.

With Black Ops 3, Activision lowered its cost price to compete with what one store described as “grey stock”, giving the independent stores a better chance to be price competitive with the supermarkets and national chains.

Another store manager said hardware, too, is hard to make money on, so much so that it turns to GAME to grab some bargains.

“We tend not to buy consoles direct from any major distributor, because it pays us to go to GAME, buy one of their bundles, sell an Xbox One for £300, take the games out and make an additional £90 by selling them separately.

“That’s our profit margin. If we were to buy a console direct, we’re only making £25 if we’re lucky.”

Source: MCV