Topic: Wii U Discs Are Cheaper Than Digital Wii U Games - Craziness!

Wii U games on disc are usually alot cheaper than the digital version of the same game. It should be backwards! Printing discs and paper instructions costs money. Shipping those discs costs money. Sending promotional material to thousands of retailers costs money. On the contrary, providing bandwidth for a download costs very little. Market prices should be reflecting these costs. Digital games should be cheaper, not more expensive than disc based Wii U games.
This, of course, is because Nintendo refuses to discount digital games heavily, the way retailers do with Wii U disc based games. Retailers like amazon and toys r us.
This probably stems from Nintendo wanting retailers to have some incentive to sell Wii U games. So, these retailers will market these games and Nintendo will "get the word out more" on their games.

This is old thinking, from old business executives. Kids know they learn about games from online websites and youtube videos. Not from retailers. Sometimes they learn about games from other people. And those other people, most of the time, learned about the games from online websites.

Could Nintendo sell alot more digital games, if they chose to discount them the way retailers do? Of course. Would this make retailers angry? Probably. But things change. There is no point in "sort of embracing the future". Adapt to the future as much as you can. Those are the businesses that prosper.

At the same time, if you lower the digital price, you make less of a profit!

Not necessarily. If a game on amazon costs 18.97 for the disc, and the same game costs 39.99 to download from Nintendo, most people will buy it from amazon. Nintendo will lose out on that direct sale.

Actually Amazon loses most of the profit for lowering the price

So what I heard is, that retailers buy game from companies for $60 each. So since the developers and publishers already have the money, the retailer decides rather they want to drop the price or not. With digital copies, the money you spend goes to the developers, so they won't be as likely to drop the price than a retailer would. That's how Walmart got away with giving away PS4s for $90, because they already payed Sony to have it in stock.

you know this as fact?

that cannot be true. Because retailers sell the games for 60. So they would make 0 money. There would be zero incentive for them to stock and sell the games.

Well, it's an overexaggeration, but retailers do buy the games from them for a certain price to be sold at MSRP. So, the game developers get the same amount of money regardless of the price that the retailer sets for it. So, as @WaLzgi said, retailers lose some profit when they mark down.

I'm honestly surprised Nintendo hasn't tried to make digital sales more important than they are. Nintendo loves doing their own thing so them doing that despite risking angering retailers wouldn't be entirely shocking.

But I want Nintendo to not be ignored at stores so I guess they have to play ball...

It's more obvious in the UK than anywhere else. Though honestly I would like to see them drop prices for old games

If Nintendo will sell digital games cheaper than retail, retailers won't carry/display Nintendo retail discs as they won't sell that much in the long run. Nintendo needs these retailers to increase visibility and awareness.

As for retailers selling cheaper game discs:

I think Retailers like Amazon cuts their profit a little bit so they can sell more in huge volume. Selling 100 games for 5$ less is more profitable than selling 10 games at full price. And sometimes they ask the publishers to cut/discount their share if a game/console isn't selling well. Or publishers will inform retailers that they are lowering their cut.

The super cheap disc was already bought by the store, nintendo has little to do with its price.

Meanwhile, if nintendo decides to offer their digital games at "factory prices", then retailers will lose a lot of business.

I don't appreciate the expensiveness of going digital, either, but I guess it's a necessary evil.

You heard wrong. That's not how retail work. But you're in luck, to not be called meanie by kids here, I'll explain how it works

For one product, you have 2 prices - retail, that you, as customer, pay in the store, and there is wholesale price and that's the price you pay as an retailer and it's also a price lower than retail. With 60 bucks video game, you are looking at from even 30 (depens on publisher and how many copies you will ship to your store) to 53 (that's a max) bucks a piece.
As for lowering the price
Amazon for example is not losing money, because of the price protection from the publisher - when they have a whole stock of games that don't sell, Amazon gets the difference from unselled stock. Not all publisher are doing this, though, that's why Nintendo games are known for not being cheaper even in years to come.

With digital, you get rid off the wholesale price, because you don't need anyone but your own service to sell the game, so why not get the extra money anyway?

But digital being more expensive than retail is nothing new. I mean, go to any country which doesn't have euro, for example. For 40-60 euro for a game on steam for example, I can buy a console counterpart and buy other game on PC. I don't care about steam sales that much, because the price with sale are still higher than what I can get at retail

That is what happens with physical merchandise. Digital games don't have to be cleared out for taking up space on the store front

Amazon has (almost) never made profit in general. Incredible how it is, it is all based on future promise like a startup.

that isn't true. when retailers mark down games, most big retailers will get back the difference from the game maker....like nintendo. So, retailers still make their profit, but nintendo just loses some money on the game.

I don't believe this is true. Old, crusty businessmen might believe this, but the market doesn't. It's like saying, record stores and huge retailers like best buy are necessary to sell music. Not at all.

They wouldn't pay $60, because then they wouldn't make any profit. They pay much less and then mark it up to the MSRP. Max Schaefer, CEO of the company that makes Torchlight, actually said that games sold at $20 only send about $3.50 back.

Digital albums cost as much as physical albums in music

Yeah but there is the advantage of just getting individual tracks if that is what you want. (Or getting the physical CD and free digital copies from Amazon).