Why is the game AAA industry pushing pre-orders so aggressively?

[Majestic Manatee_v1legacy]

In recent years, it has become harder to ignore this. No other artistic industry shows to be as openly reliant and obsessed with them. Now we have multiple games holding back not only content for pre-order bonuses, but also release dates for those unwilling to pay upfront for a comparably expensive product. Publishers are more insistent that pre-order success is more important than post-release success and are placing further incentives to push people into paying early.

These pushes appear to be increasing within the AAA market as time goes on. But these publishers are filthy rich, why are they so focused on the pre-order? They're not financially desperate and require stealth crowdfunding to continue funding development. Is it an attempt to undercut the pre-owned market and reviews? To pump up day 1 sales figures? An inherent addiction for control? Is there anything that would change or diminish this obsession?

I find it frustrating to see this only get worse as we trundle along while not understanding the numerous customers or the skewed focus from the corporate perspective.

 

[BrawlMan]

The answer is simple:


It's why I avoid companies like EA, Activision, or Ubisoft. They have nothing left to offer me and I'm sick and tired of their policies are screwing over the customer. That is why I boycott them. It's usually why I buy from Niche developers are Publishers, because they usually don't pull off this bullshit. But even companies like Arc system works are guilty of this. It's usually the Western developers that do this, but the Japanese have been just as bad about it as well. See Capcom, Namco Bandai, Koei Tecmo, and Konami. All I can say is vote for your wallet. Believe it or not, it does work.

 

[jademunky]

My understanding is that game companies make most of their money from the first few weeks of release. Preorders get that ball rolling for them a little faster and also serve as a barometer for whether or not there is enough buzz in the fanbase to continue to crank out sequels and DLC.

 

[Addendum_Forthcoming]

Preorders extend the window of the greatest possible profitability. Effectively it not only generates sales without actually occupying shelf space, virtual or physical (which is good for both brick and mortar and digital distributors) ... but in a way it generates marketing data and internet speculation about the game. It's effectively zero direct feedback open critique of the game that increases its online profile and thus generates even further sales, even from people that would otherwise learn the game isn't for them if they waited to buy it only once its proper release and realizing it might be shite/not for them.

It's also another way of mitigating the effects of total demand and supply wastage.

 

[KingsGambit_v1legacy]

They use media embargoes and reviewer blacklists to control the message that gets out about their games. So worried they are that a review, which in old days released before a game, would say negative things and jeopardise sales on release. In the age of AssCreeds, Andromeda, BF2 and other EA/Ubisoft style shovelware, the corporations are terrified that people will find out about their games before release.

Pre-orders is in this same vein and is the same as season passes. Paying for content that hasn't yet been delivered (and in the case of DLCs, often not even conceived of) is the best thing for them. If they can take your money before the game is out, it doesn't matter what the reviews say any more. In a market increasingly heading toward digital delivery, gamers often don't even have a disc to sell on.

They make crap, they know they make crap, so they embargo reviews and try to push pre-orders as much as they can. That way they can have your money while selling you crap and saying "No backsies!" when you realise you bought crap. A company that makes a great game doesn't need embargoes, pre-order bollocks and the rest to sell copies because its quality will speak for itself.

 

[sXeth]

Free market research. Not unlike the practice of throwing out a Kickstarter to try and demonstrate interest and encourage more serious investors.

Which segues well into the mainstay, having a number on paper is a much more definitive statement for presenting to your stockholders then most other projection methods. Its not actual money in the bank, but its a solid estimate.

Obviously, enough people pre-order and forget that you might slip something less then stellar by. That ones solely on the people pre-ordering though, and doubly if they don't unpre-order when questionable s*** comes up.

Retailer pressure. You notice all those store exclusives in pre-orders right?. The brick retail side of game sales has been struggling to keep itself present for awhile now. Exclusives help direct people to specific big influence retailers, and while pre-orders can be cancelled, its often only for credit at that retailer unless you jump through some serious hoops. They're the ones that have your money largely on lock if you pre-order. Also to some degree, retailers won't stock the game (significantly or entirely) without enough pre-orders, so the publisher needs the pre-orders to put their game on the shelf for the impulse buys.

 

[Kerg3927]

Because they can. It increases sales, which increases profits.

The more people they can get to buy something before critical reviews, user ratings, and word of mouth and other online criticisms are available the better. Because once a game is released, and more information is available to consumers, if there is a lukewarm or bad reception, a lot of people who were thinking about buying it will decide not to. So they try to head that off and get sales to go through while the consumer is at his most ignorant about what he is actually purchasing.

But these publishers are filthy rich, why are they so focused on the pre-order?

A company can never have enough money. It is the duty of the executives to their shareholders to maximize profits. That is their sole purpose for being employed there. And if they don't do that, they will be fired and someone else will be brought in who will maximize profits.

 

[Vanilla ISIS]

Wouldn't you want to sell as many copies of your game before the reviews come out?

 

[Exley97_v1legacy]

A lot of different reasons, but a lot of it is metrics (garnering interest, allows them to work out advertising plans, etc.), assuring sales, and general marketing hype.

In addition, it helps public companies better track/estimate the projected revenue for each quarter, which is important because if quarterly earnings forecasts are under even by a penny, that's bad news for the company.

 

[Basement Cat]

Pre-orders were more common a few years ago, IIRC. Then there was a spree of studios rolling out buggy games (Mass Effect: Andromeda, for example) which left many buyers wary of pre-ordering.

I myself wait until a game has been released so I can learn if the game is buggy or not.

 

[Yoshi178]

My understanding is that game companies make most of their money from the first few weeks of release.

this is true for alot of developers. but alot of developers games don't have much longevity in their game sales as well.


alot of why Nintendo has managed to stay around for so long is because they keep their price's high and they are consistent sellers over long periods of time. like Mario Kart Wii for example. that didn't sell 32 million copies in the first couple of weeks or even months.

it took Nintendo years to achieve those type of sales for that game.

 

[Kerg3927]

I myself wait until a game has been released so I can learn if the game is buggy or not.

I've gotten to where I expect a new game to be buggy, and so I try to not just avoid pre-order but also wait a few months for the developer or modders to fix the bugs before buying it.

I don't do that with every game, but if one can be patient, it's the best way to go. There are a lot of games that get slammed by critic/user scores upon release simply because of the bugs, but a few months later, most of those bugs are gone.

 

[jademunky]

My understanding is that game companies make most of their money from the first few weeks of release.

this is true for alot of developers. but alot of developers games don't have much longevity in their game sales as well.


alot of why Nintendo has managed to stay around for so long is because they keep their price's high and they are consistent sellers over long periods of time. like Mario Kart Wii for example. that didn't sell 32 million copies in the first couple of weeks or even months.

it took Nintendo years to achieve those type of sales for that game.

This might be why I have not bought Nintendo products in the longest time. I'm simply not willing to pay launch day prices for a decade-old game.

 

[Richard Kain]

The easy answer is interest. Money you have now is better than money you get later. You can do whatever you want with money you have now, including investing it and earning interest off of it. Money that you get later you don't have access to until later, which means that you can't exploit it. It doesn't even matter if the customer asks for their pre-order refunded. For as long as you had that money in-hand, you had the opportunity to use it to make more money. Even an eventually cancelled pre-order has value to a corporate entity.


And there are the other reasons as well. If the pre-order item is physical, the number of pre-orders can help the publisher to estimate how large of a print-run they need to make. The ideal for print-run productions of physical games is just enough to satisfy demand. You don't want extra stock lying around, that's practically throwing money away. This is why Nintendo always seems to have stock issues. They are very conservative, and always under-produce to help insure that they don't get stuck with extra stock.