With Activision pricing Modern Warfare 2 at £/$54.99, retailers have been informed that other publishers are likely to raise princes as well, thanks to sinking pound and US dollar values.
“Exchange rates between the Euro and the pound are making it very difficult for publishers to show an acceptable operating margin in the UK,” THQ’s Ian Curran told MCV. “You can’t continue to trade as normal when the biggest territory in Europe has seen cost of goods increase by 30 percent due to the strengthening of the Euro.
“Publishers somehow need to offset this drastic increase in costs. I’m not surprised to see the [Modern Warfare 2] SRP go up and I feel this will continue across more key titles.
“Also, development costs for next gen software has increased at a time when the take-up on these machines is slower than expected and therefore the opportunity to sell more units is limited. The increase in cost of goods due to the weak pound has added to this burden, and therefore something has to happen to ensure publishers’ return on their investment.”
In response, a games buyer at one of the UK’s largest retailers told MCV that because of the climbing Euro, publishers were having to raise prices.
“A couple of months ago a few publishers mentioned that they were being hammered because of the Euro. To combat this they decided that certain titles would have a higher RRP,” said the unnamed source. “You can guess the reception this got from retail.
“The fundamental problem is that the customer will feel conned that the latest triple triple-A is £50 at retail when last year it was only £40.”
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