Since we are dealing with the bad news of the Xbox One only coming in October and the lack of local cloud power I thought we may as well make this a day of abject misery and point out a really depressing fact that is about to hit all of us.
All our current game prices are about to go through the roof and as much as we don’t like it the distributors like it even less.
Our local distributors need to order their stock quite a way in advance of retail release and at that time they peg the US Dollar to the rand and place their orders. They also then take out some insurance on the exchange rate changing to protect everyone concerned, and later games arrive on retail shelves.
Oh wait not before they put on a standard profit margin and the couriers, customs and others do the same. We can claim that this happens all over the world but the number of gamers in Europe gives them a bulk discount as well, plus the fact that there are no customs duties moving between countries in the EU means that all games can enter together and be distributed from a central place.
Anyway moving on. As much as we all love to hate the likes of Ster-Kinekor, Megarom and Apex and claim that they are raising prices to line their own pockets it simply isn’t true. These are all companies that need to make a profit but at the same time are well aware that as prices go up the number of sales dwindle as people simply can’t afford to spend so much money on what is a blatant luxury.
So why are the prices about to escalate if everyone in the industry is desperate to keep prices down? Well when was the last time you looked at our exchange rate?
As of today it will cost you R18.68 to buy a single British pound compared to R12.81 exactly 12 months ago.
That’s an incredible 50% increase. Now exactly a year ago games were going for around R550 – R600 each at retail. So without adding in inflation or anything else it is only reasonable to expect games to now sell at between R825 and R900 a title. Including inflation and e-Tolls costs that have to be passed onto consumers in some form we shouldn’t even be surprised to see the top titles selling for over R1000 in the near future.
And before everyone screams that they are going to import just remember this isn’t a local company problem. Te exchange rate is the issue so even buying directly from Amazon in the UK it’s still going to cost R803 + delivery and customs and therefore will likely still be cheaper here.
You know who loses out in all of this? Everyone in the industry. Gamers can’t buy as many games at that price so we lose our entertainment, distributors and retailer sales drop meaning they need to cut back on costs like staff and marketing. And we suffer badly because they are cutting down on marketing.
2014 is looking like a terrible year for gaming in South Africa and the most depressing part about all of it is that the only people who can fix this are the government and these clowns just recommended a convicted criminal to act as the police watchdog and the official opposition have named a member of an opposing party as their presidential candidate even though she hasn’t given up leading her other party.
I’m normally truly optimistic about our country but I have to say the last 2 weeks have sent me down an emotional borehole. I’m just hoping someone smacks some sense into these two parties before election day.
Last Updated: January 30, 2014