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Re: Microsoft Flight Simulation and piracy [message #59718] Wed, 08 May 2013 22:08
pournell is currently offline  pournell
Messages: 12
Registered: May 2013
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Junior Member
Message-ID: <660@sdcsvax.UUCP>
Date: Tue, 10-Apr-84 16:55:29 EST
Article-I.D.: sdcsvax.660
Posted: Tue Apr 10 16:55:29 1984
Date-Received: Fri, 13-Apr-84 05:59:28 EST
References: <212@felix.UUCP>, <1@ucbvax.UUCP>
Organization: U.C. San Diego; freelance writer
Lines: 61
Re: software costs and theft of games:

In reply to the arrogant gentleman who claimed that "..he'd been an
Apple II programmer and knew exactly how much these things cost" and
"that there was no possible justification for charging $30-$40 each":

Take a marketing course, or just go through third grade mathematics
again.  It may only cost $4 to $7 each to package a game (sometimes
more, depending on the package), but have you ever heard of overhead?
There are some other costs:

1) Advertising.  Between 10% (industry low) and 35% (industry high) of a
company's gross is usually spent on advertising their new babies.  How
much do you think it costs for a full-page in a 100,000-circulation
magazine, let alone a large one like Byte?  For those who don't know,
it's about $10,000 plus color charges (about $750 a color) for Byte, and
that's much cheaper than a "real" (non-computer industry) magazine.

2) Markup.  Look, mack, most people can't sell very many games through
the mail; nobody trusts a game they can't try out.  So they get sold
through  retail stores, all of whom require a markdown of between 30%
and 55% of the games' cost to even look at the thing.  And *THAT*'s if
you deal directly with the retail stores.  If you go through a
distributor, they take another 20% to 35%.  That doesn't leave much for:


3) Taxes.

4) Shipping, office costs, up-front costs (how much does four-color
process embossed on a box cost?  Any ideas?), disk costs, show costs,
etc.  Not to mention:

5) Salaries and royalties.  The effing programmer, the poor sod who
(yes, Virginia, he is) is being ripped off when you buy the "overpriced"
game, his office-mates, etc., usually come last.  They get paid out of
what's left.

Oh, yeah, if the game is on a cartridge, you have to pay the ROM mask
charge, plastics mfgr, PC maker, etc. etc..

All of you out there who feel that games cost too much can congratulate
yourselves.  You'll probably drive the cost of games down, simply
because the really huge distributors/publishers will be the only ones
able to keep the costs down enough to satisfy you.  Of course, that'll
drive out the small guys, creativity, and innovation, but you'll have
your lower prices.  Take a bow, gentlemen.

Have any of you out there even priced blank disks in bulk?  Try a little
arithmetic, folks.

Oh, and if you doubt `my figures:  why is Sirius (a mfgr/publisher of
Apple games) now in recievership?  Why is Activision losing money?
Certianly it doesn't seem to be because of obscene profits.

The many of you who do pay for games may now know why you pay so much.
Remember, the guy who buys mail order pays the same as the retail buyer
because no retail store will stand for price-cutting competition from
their own suppliers (not that way, anyway).

Sorry if I was acrid, but this guy ticked me off.

Alex Pournelle
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