Thursday, March 13, 2008

Math Is Hard: The Inevitable Correction

Rhys K. pointed out that while my calculations on the Haze promotion were accurate, I didn't complete one of the transactions.

Here's what I didn't complete. It's true that the end cost, to Gamestop, of a used copy of Haze via the promotion is roughly $30, which is the same price they'd pay for a used copy of a $60 game in the first week after launch. However, I said the net difference is zero, and that's not true, because that $30 cost for a used copy isn't a final cost--it's an in-store credit.

So that $30 isn't the end of the transaction. It's really going to cost Gamestop only $27 (if it's applied to a new game) or $15 (if it's applied to a used game).

If you follow both transaction paths to their absolute end, the Haze deal IS more expensive to Gamestop, at least initially. The increased foot traffic, increase in pre-orders, and quick availability of used copies for additional inventory turns should make up the difference, but it does cost them something extra up front.

Really, I need a vacation from math, particularly this kind. My head hurts.

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