In other words, if an electronic version of a $50 hardcover book is regularly discounted at 35% off (the current Paizo sale and regular Amazon print price), the customer perception is the book has a value of $33. Buying that book for anything over $33 is foolish, or so the Internet logic goes. It's the Amazon effect, but it's perpetuated with electronic products. So what was the response to the WOTC debacle from digital RPG providers? Lets have a sale! Paizo, Green Ronin and others went on the offensive with a sales drive. No offense to them, but as a retailer it makes me wonder if they understand how to actually sell things. Or perhaps my brick and mortar sensibilities are irrelevant in a digital world.
So what's so wrong with sales and product devaluation? First, from a retail perspective, customers are being trained for sales and will learn to only buy items when on sale. It's retail 101. It's Pavlovian; shopping dogs that we are. Second, whether or not digital products are supplemental or replacement products, the perception is that of a lower value, which eventually translates into lower sales for products at full price. As a customer, that sounds great, but the reality is that stores simply won't carry products at a reduced margin. They can't keep the lights on. They'll move on to selling other things.
The theory goes:
- Reduce the brand value of the product
- Force sales to Internet discounters (electronic or print)
- Which guts RPG sales for brick and mortar stores
- New player growth stops, as it's believed brick & mortar stores introduce players to these games
- Destruction of your segment is complete
That's rather simplistic and it ignores the fact that free is the ultimate brand value eroder. Pulling out does nothing to stop piracy. Still, if your company is all about selling stuff, wouldn't you want to avoid this issue for as long as possible? Isn't there potential that an iStore or a DDI solution could come along in the future to preserve your brand value, make you money and ensure your survival?