Konami to UK Retailers: Stop the Price War

September 1, 2011 -

Konami Europe's top executive says that publishers are taking a shellacking from retailers in the United Kingdom because of their competitive pricing and constant sales battles and he's had enough. Speaking to MCV, the publisher’s European chief Kunio Neo said that the UK market is suffering, while other territories such as Germany are thriving. He blames the constant sales battles among retailers in the UK and he has a message for them: Stop the price wars.

“UK games pricing is very poor,” said Neo. “Retailers are always reducing prices and the profits for publishers are getting smaller. The UK is really suffering. And he said that Konami is far from the worst-off publisher in this situation.

“We’re based in Germany and despite the economic conditions in many other countries, Germany is doing alright. So we’re not as affected as a US publisher that has a UK office. They’re suffering because they focus their sales on the UK.”

Konami’s European GM of sales, marketing and products, Martin Schneider offered a more succinct message:

"Tell the UK shops to stop the price war."

We wonder if they are actually listening, and we have a pretty good idea of what consumers in the UK think about all the sales..

Source: Konami


Comments

Re: Konami to UK Retailers: Stop the Price War

Hmm, lets investigate a few games that pop up on web pages of the console section of the leading UK high street games retailer... in fact, the ONLY major high street retailer specialising in video games as far as I'm aware.

 

GAME - FIFA12 or MW3, £45.  Dead Island or BF3, £40.

RRP - FIFA12 or MW3, £55.  Dead Island or BF3, £50.

US prices - $59.99, equivalent to £36.99 at current exchange rates.

Maybe the UK retailers are undercutting recommended retail prices, but we're still getting gouged in comparison, so what I'm thinking is, "you dont know what the hell you're drooling about, Konami, you insane morons."

Re: Konami to UK Retailers: Stop the Price War

So he wants to UK to stop selling games at cheaper prices. I take it that he believes that £55 for COD is acceptable then?

Games at £30 are still too expensive, and considering that the UK has to pay more for hardware and software, well he just needs to take a long hard look at those comments.

Re: Konami to UK Retailers: Stop the Price War

£30 can be a substantial amount of money compared to ones budget but £30 for a product that, in some cases, gives you hundreds of hours of entertainment is practically a steal.

Re: Konami to UK Retailers: Stop the Price War

Lol. You know you are full of yourself when you make this statement publicly.

On the other hand, UK, could you teach other countries how to be more competitive?

Re: Konami to UK Retailers: Stop the Price War

Would Mr. Neo prefer price fixing, instead?

Re: Konami to UK Retailers: Stop the Price War

wait a second...wouldn't retail sales come out of the store's cut of the sale? unless Konami's lowering what they sell it to the stores for, how could that have an effect on them?

Re: Konami to UK Retailers: Stop the Price War

So Konami is basically saying "Screw the free market! Sell stuff at the price we want them sold for, not what their market says they should be sold for."

Re: Konami to UK Retailers: Stop the Price War

I wouldn't go that far, but if something doesn't happen soon, there won't be much of a market left.  If something's not profitable, there's no investment. What most people fail to realize is that games are not a labor of love. It's a business. If there's no money to be made, investors take their money elsewhere. If there's no investment, there's no product.

It's the same thing with reserving games at Gamestop or Target. If there's no pre-orders, that tells the publishers there's no interest, so they cut their losses and move on to the next project. One of the big reasons that games are canceled is lack of consumer interest.

Re: Konami to UK Retailers: Stop the Price War

The question is what exactly is supposed to "happen soon"?

Now we don't know what kind of supplier contracts are in place here, but Konami should theoretically be able to refuse to sell their product to retailers below a certain point, setting a price floor for any retailers that want to carry the merchandise and be able to sell it at a profit. However, the effectiveness of that depends on how much the retailers value Konami products versus how much they value the increased business from all of their sales. If the Konami products aren't "must have" big sellers, then they may have their answer why they're having a hard time holding a higher price point.

My question is, where is the problem here that is inhibiting normal correction if prices are truly too low from a market standpoint, rather than just "too low" from what the publishers would like? If the UK market really is doing so bad, the retailers ultimately are going to hit the bottom on slashing prices and still being able to sustain themselves, and the weaker competitors are going to start dropping. One would assume the reduced competition at that point would see prices start to rise again.

It is entirely possible I'm missing something, but I'm not sure where any of this is deviating from normal market dynamics to the point that the whole UK games market could implode.

 
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