Nemo84
Posts: 115
Joined: 3/29/2010
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quote:
ORIGINAL: hondo1375
I respect your passion Nemo84, and your concern for the hobby, but I'm not sure I follow your argument here. So long as there are no significant barriers to entering the market, keeping prices high is about the worst way of maintaining a monopoly position. It makes the market attractive for others to enter, and provides a price umbrella for them. Especially, if as you say, there is a big untapped wargaming market to be addressed at lower price points. Someone could just come in and set up shop, undercut Matrix by 30%, get lots of new customers, and still bring in lots of revenue. The best way for Matrix to keep out competition would in fact be to discount, as that means it would be hard for someone inexperienced in the business, without a reputation with developers, to set a price point in the market that could make everyone some money.
This would be true for a traditional industry, where distributors shoulder huge overhead costs and can use said existing infrastructure to outcompete newcomers. However, digital distribution and the internet changed all that. Servers and bandwith aren't expensive, PR requires no existing connections and can thus easily be done by yourself as so many indies demonstrate and word of mouth is incredibly fast and efficient. A game that can manage to fund itself to completion (an achievable feat with modern crowdfunding) no longer needs a distributor, and is often worse off when taking one anyway. Thus Matrix simply can not undercut a self-published title, and offers very little advantages for running off with 30+% of profits. As evidence, look at Unity of Command. Matrix did not secure sole distribution rights and as a result has the highest asking price of all distributors ($30, VAT included). The lowest price ($6, VAT included), can be obtained directly from the developers themselves, despite being a tiny studio.
What Matrix in my opinion is attempting is keeping the entry cost for competitors high by tightly controlling both supply and demand. The wargaming genre, which was one of the major players in the 80's and 90's, has been reduced to a tiny group of die hard fans. Said die hard fans by definition will pay almost any price you ask, though as this thread demonstrates even that has limits. The high prices however scare off the vast majority of potential customers, keeping demand low enough to be manageable by Matrix, a very small company. Likewise, that low amount of sales and tiny customer base promote Matrix' PR that wargaming is a tiny niche and that developers need them to survive. This pushes more developers towards Matrix, who tries its very best to secure sole distribution rights, allowing them to control supply as well. And when you control both, no one can challenge your monopoly despite ridiculous high prices. New distributors would have trouble finding interested developers because Matrix seems like a safer bet, existing titles are likely contractually forbidden from seeking multiple distributors and until a new competitor manages to expand the market, which will take time, they are directly competing with Matrix, a well-established player, over a tiny customer base. It's not a fool-proof business strategy, but it's a very smart one for them to follow. But like Iain said about Steam earlier: what's in the best interests of Matrix Games might not necessarily be in the best interests of the wargaming genre.
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