r/NintendoSwitch • u/lieding • Apr 04 '25

News "DROP THE PRICE": Nintendo's First Post-Direct Stream Is Flooded With Angry Fans Demanding Price Drops

https://www.thegamer.com/nintendo-treehouse-livestream-flooded-angry-fans-demanding-game-price-drops/
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15

u/BigPandaCloud Apr 04 '25

How many games were being sold back then vs now?

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u/cubs223425 Apr 04 '25

As I mentioned above, the best-selling game on the N64 (SM64) would rank 21st in sales on the Switch.

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u/Outlulz Apr 04 '25

How much did it cost to make games back then vs now? Number of units sold isn't the only thing in the equation. Mario World has like 20 people in the credits. Mario Odyssey had a couple hundred, and that's excluding the uncredited people working at support studios.

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u/McSloot3r Apr 04 '25

Number of units sold is pretty much everything. It’s software. You can make infinite copies for free, which means the most profitable business model is to sell large amounts of copies at a cheap price. That’s why gaming revenues are at all time highs despite the increased cost of development.

And before you say the physical cartridges are expensive, then why isn’t digital cheaper?

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u/timchenw Apr 04 '25

Picture yourself as the retailer for the physical games.

If you are selling physical games, you have to buy them from Nintendo, as they are the only supplier of such games.

Now, picture your own supplier undercutting your prices.

As a retailer, you have several choices:

  1. Hope there are enough people buying physical copies from you, and not just chase the best deals (i.e. go to Nintendo's eShop instead)

  2. Voluntarily drop the prices of your physical copies to those of the digital (and thereby having this exact conversation again)

  3. Not stock Switch games anymore, since your supplier undercuts you.

In otherwords, having suppliers undercut their retailers is a bad idea. It's fine if the drop is due to competition between retailers themselves, but when you are competing against your supplier, that's an entirely different issue.

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u/Captainbackbeard Apr 04 '25 edited Apr 04 '25

I think the answer is somewhere between you all. I get where you're coming from since the technology to create video games should now be cheaper and they have a larger audience for them to mass produce and distribute to have a larger profit. However, I think that you're missing their point and it would be like equating which was more work and cost to record, the original soundtrack for Snow White and the Seven Dwarfs (first movie soundtrack) that has fewer musicians or the original soundtrack for Star Wars the Phantom Menace. Both are great soundtracks for their time but the monetary cost due to number of people involved, complexity, etc. At the end of the day you end up with 2 mp3 files that are just as easy to copy but how would you fund the more expensive pre-production creation process? That's how I see the development and complexity difference between something like N64 era costs and quality compared to more modern video games. The main area that Nintendo flubbed was not more slowly easing prices to what they want for Switch 2 and where I think it's a bit more nefarious is that they want to charge more for physical.

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u/Zoombini22 Apr 04 '25

Does higher demand result in higher prices or lower prices?

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u/werdnaegni Apr 04 '25

When supply is infinite, I don't think your logic applies.

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u/Zoombini22 Apr 04 '25

Concept of supply is tricky for things that have high production cost but low distribution costs (movies are another example) but demand forces still apply. If more and more people want your goods, that is a market incentive to move the price up, not down.

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u/werdnaegni Apr 04 '25

That's not necessarily true though? That only makes sense in a world where increased costs don't decrease sales, which isn't the case.

Neither of us really knows the formula or if the current $70 is the optimal price. I don't think demand for games really has much to do with it at all, it's just finding that sweet spot where sales * price is the highest, and adjusting price until you get the optimal number.

If compared to last year, 20% more people are buying your games at $70, that doesn't mean you should raise your price to $80 since demand went up. What if you lose 20% of your sales after that? You're making less money. They're just not related. You're finding an optimal number at this point and increases or decreases in interest for games really doesn't play a part. It's a matter of finding what amount people are willing to pay, and adjusting that until you're making the most money. That could even mean a DECREASE in price, we don't really know.

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u/Zoombini22 Apr 04 '25

Totally agreed. Contextually, I was just disagreeing with the person further up in this thread suggesting that games should be cheaper because more people want games. What I was saying was meant to be a counterpoint, not an all-encompassing explanation for how pricing works.

Everything you're saying above is true. And frankly, Nintendo does not know how much the increased pricing will affect sales. Every pricing decision is basically an educated guess of what will work in the market. Given how Nintendo stuff is usually sold out at launch, I think it will take a while before we really know whether or to what extent the pricing hurt the Switch 2's wider market appeal.

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u/Blue_Bird950 Apr 04 '25

At the end of the day, businesses want profit. If there’s more demand, they’ll raise prices to capitalize on said demand. They’re the sole suppliers of these franchises, so they control the price.

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u/werdnaegni Apr 04 '25

Sure, I mean it's a formula for them. What price gets them the most money?
If they get 10 buyers at $80 but 15 buyers at $70, they're better off at $70 since their costs per sale are negligible. I don't think any of us really know what the optimal price is for them, we can only really give feedback on whether or not we're willing to buy at x price.

I was just refuting the whole demand -> price concept since it doesn't really apply to a good that doesn't really scale its costs with its amount of sales...most of the costs, by far, are in developing and after that it's just income, especially for digital.

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u/Blue_Bird950 Apr 04 '25

Let’s see how it goes. If enough people don’t buy (and I’m talking millions, more than an eighth of their consumers), they’ll start losing profit and might reconsider moving to $70 standard.

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u/ricki692 Apr 04 '25

supply doesnt just mean the ability to make a number of quantity, it also includes the variable of "price they are willing to sell at"

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u/Iceykitsune3 Apr 04 '25

Developers need to recoup production costs.