Posting on two blogs at once, because I can

NOTE: Due to the fact my 1up blog has limited readership and my strange compulsion to blog at 3:45 AM, I'm going to be posting this on my blog at 1up as well as my class-related blogspot blog.

I was browsing 1up's Holiday Buyers Guide, checking out the PSP games they recommend. One game that I've been interested in, but because of a $40 price tag I've ignored, Rock Band: Unplugged.

I thought to myself "Woo, that's a bit pricey, maybe I'll give it a buy once the price drops." Not exactly the problem right now, the problem in the not too distant future once the digital download takes hold, but that won't ever happen.

From what I understand with my enormously extensive knowledge of economics, with two (2) under my belt, the price of something goes down when nobody wants to buy it. With games, this usually happens when new releases come out, and older titles, because of limited shelf space, are left by the wayside. In the world of digital distribution, where there is no shelf-space, and all titles are as readily available as the day they were released, so the price of digital goods will never decrease.

There are examples of the price of good decreasing to match retail, my personal favorite service Steam does this well, like how The Orange Box has lowered to $30 from it's initial $50. But that's just the issue, they do it to match the retail prices, so what happens when there isn't a retail anymore? What will be the incentive to drop the price?

Demand may drop, and interest in the title may become nonexistent, so the title may go on temporary sale; selling the game at 75% off for a weekend wont make very much money, but it will sell spectacularly. You could apply this to the "retail price", if the price gradually reduces over time, sales will be steady with the cheaper price bringing in buyers instead of whatever other appeal there was.

For now though, looking at both Xbox Live and the Playstation Network, there is content on there from 2005/2007 that has stayed at exactly the same price because it never had a retail version to compete with. Geometry Wars was available at launch for 400 Microsoft Points($5), and four years later it's still at that. Will it be at that in another year? Five? Ten? I have no idea, but I'm doubtful it will ever permanently drop.

I'm very pessimistic when it comes to the future, so maybe I'm just seeing things as bad as they could be. To be dramatic, imagine a world where the concept of the bargain bin is something of the past and you'll have to forever pay the full retail price of "Big Daddy" or "School of Rock" except for the occasional sale.

Instead of hosting a sale to clear stock, because the stock and space are both infinity, it's just a temporary incentive. Also, because it's limited, you're probably more likely to buy it, because who knows when it'll be on sale again? May as well get it cheap, because it's impossible for it to ever be this cheap, besides the sale.

Also of note, because of the pricing mechanism as I understand it, digital price drops are not decided by the "retailer" alone, but the developer as well. Retail on the other hand, their merchandise has been bought from the distributor or warehouse and it's the retailer's choice to price it however.

Then agian, maybe I'm a little depressing.