Ubisoft explains why digital games are as expensive as physical games

Digital games are interesting, they require less than physical game releases, there's no packaging and they offer no resale value like a physical game would. Long term, digital games don't often see the same price reductions as physical games.

Ubisoft's CEO Yves Guillemot attempted to explain why digital games were as expensive as physical games during a recent call to investors. 

According to Guillemot, “Digital is more reactive than what we put in stores, but at the same time, it doesn’t react as fast on consoles than it does on PC.” The CEO went on to explain what that statement meant, "What we can say is that when games are older than one year, digital is a lot more dynamic on console because there are less units in stores…at the moment you see all sorts of prices depending on who is doing a promotion for that specific week.”

Digital games retain their price so that when the physical copies sell out they can turn to the digital version and still buy the game at full price, regardless of whether the game was on sale at the physical retailer.

The CEO offered supplemental reasons behind the price of digital games, digital sales and where Ubisoft puts their stocks. "Also, one thing to consider is related to stocks; if we have stock in stores, we tend to make sure we decrease the quantity of units in stores before going digital with lower prices."

The best example Ubisoft could think up for the value of digital games was offered by Ubisoft's CFO Alain Martinez. 

“On digital we will not sell [a game] for a lower price compared to physical. After a few weeks or few months things can change, and as Yves has been saying, sometime you might have a promotion on Amazon [that is] not on GameStop, but we can also react on the digital side.

We are actually more aggressive on the PC side where digital is very, very strong. We tend to be more conservative on the digital side for more console and more flexible on PC.”

It seems a bit confusing and like a lot of words to describe something very simple. Digital games on consoles retain there price long after physical games are available cheaper because people will pay the price for the convenience and because they can. 

[Gamespot]