ASDA Selling Games at a Loss - Will It Kill Innovation?
All in the spirit of competition
It appears that ASDA - which is owned by everybody's favourite American stores, Wal-Mart - has owned up to selling video games at a loss. The company's games buying manager, Duncan Cross, told GI:
"It might surprise Chips MD Don McCabe and others, but we aren’t making any money on FIFA 10 because the price we have had to pay to the supplier is more than we are charging our customers."
Therefore ASDA is paying EA more than £38.91 for the game.
Cross then makes the kind of argument regarding under-cutting the competition based on being able to use loss-leaders that would probably please a shareholder but not fool a child: "I am sure the other supermarkets are in a similar boat, so to criticise them as 'bully boys' doesn’t make sense to me – how can you be a bully if you are selling something for less than you buy it at?"
He then supports the uncompetitive practice via the use of the sacred customer: "Our customers continue to tell us that computer games are an expensive product in today's economic climate so we are working hard to try and offer them consistently good value for money within the games category."
So, are ASDA and other supermarkets providing excellent value for money? Or will the death of the independent prepared to stock all manner of games (and have the expertise and interest to help its customers) result in the death of innovative but poorly selling titles? A leading question and a biased one, we admit. What do you think? To the Forum please.
"It might surprise Chips MD Don McCabe and others, but we aren’t making any money on FIFA 10 because the price we have had to pay to the supplier is more than we are charging our customers."
Therefore ASDA is paying EA more than £38.91 for the game.
Cross then makes the kind of argument regarding under-cutting the competition based on being able to use loss-leaders that would probably please a shareholder but not fool a child: "I am sure the other supermarkets are in a similar boat, so to criticise them as 'bully boys' doesn’t make sense to me – how can you be a bully if you are selling something for less than you buy it at?"
He then supports the uncompetitive practice via the use of the sacred customer: "Our customers continue to tell us that computer games are an expensive product in today's economic climate so we are working hard to try and offer them consistently good value for money within the games category."
So, are ASDA and other supermarkets providing excellent value for money? Or will the death of the independent prepared to stock all manner of games (and have the expertise and interest to help its customers) result in the death of innovative but poorly selling titles? A leading question and a biased one, we admit. What do you think? To the Forum please.
Games:
FIFA 10
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Comments
realvictory 28 Oct 2009 13:02
1/6
I thought the death of innovation had already come and gone.
On the other hand, I don't believe this will kill innovation - people generally already know what they want based on previews/reviews, and will look for it. They're not going to buy a different (i.e. less innovative) game just because it's cheaper, in my opinion.
On the other hand, I don't believe this will kill innovation - people generally already know what they want based on previews/reviews, and will look for it. They're not going to buy a different (i.e. less innovative) game just because it's cheaper, in my opinion.
Anon 28 Oct 2009 13:09
2/6
Surely it's more likely to promote innovation? Same as the rest of technology goes about making things that will be better, cost less to produce and in turn be cheaper than they're previous counterparts to sell to the consumer, so could video-games. I mean just look at the success of all those little bits and pieces that already pop up on Marketplaces and Networks and Shop Channels, like Braid, etc. The again as always there's the inevitable likelihood that EA will then "pull a wii" and make lots of cheap to produce and to sell games, which are all generic. Can anyone say wii party games?
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Anon 28 Oct 2009 13:10
3/6
@Anon *their - damn my bad grammar >.<
bertybassett 28 Oct 2009 15:18
4/6
just another nail in the coffin of retail products. Long live the iTunes app store.
DoctorDee 29 Oct 2009 09:07
5/6
Consumers are also saying that televisions, George Formby Grills (the good ones with the removable plates, and the timers) and Food are expensive in today's economic climate. But I do not see Asda selling THOSE items for less than cost.
Joji 2 Nov 2009 20:30
6/6
Naturally, its the small stores that will suffer, but the likely hood of every gamer running to buy from Asda is unlikely. Dedicated stores just offer extra stuff you can't find in supermarkets.
Most of us shop online now anyway.
Most of us shop online now anyway.