Online game retailers have been informed by Milestone Interactive, one of India’s largest game distributors, that they are no longer allowed to offer discounts on preorders or games that are less than 60 days old. Further, retailers have been told not to bundle any additional bonus content along with Milestone’s games. Milestone is one of India’s oldest game distributors and releases games from Sony, EA (on Playstation, Nintendo and PC formats), Capcom, and others in India. In theory, this new rule should put an end to the recent trend of online retailers tripping over each other to offer the best discounts and freebies, and it would seem the days of getting sweet discounts from our favourite IVG Vendors are behind us. Well, not quite.
Update: Comments from Milestone
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First off, this only applies to Milestone games, so there’s no rule preventing discounts on games from Activision, Square Enix, Ubisoft, Rockstar, 2K, Microsoft, THQ, etc, which are released here via other distributors. But even for Milestone games, online retailers still have a loophole that they can exploit. While stores have been told not to list games at lower than MRP, there’s nothing stopping them from giving out promotional coupons that let customers avail of discounts on a wide variety of products, games included. Websites like LetsBuy.com are already using this tactic effectively.
Discounts are surely unhealthy for those on the retail side of the business, especially since margins aren’t that big. So you would expect those in retail to take a stand against discounting rather than the distributor, who makes the same margins regardless. It’s also bizarre that retailers aren’t being allowed to bundle bonus content along with games, which only gives the customer more value. It’ll be interesting to see how this works out, and if growing online portals like LetsBuy and Flipkart choose to abide by these new directives. It’ll be even more interesting to see if other distributors follow suit and attempt to curb discounting of games.
We contacted Milestone to try and get behind the reason for such a move. “Organized gaming retail is at a nascent stage of growth in India and we would like to follow the best practices for it to grow at a much faster pace. Our aim with the new policy on containing the uncontrolled discounts on games by the retailers, especially online retailers, is to maintain the long-term health of the industry. Considering the size of Indian gaming market compared to established markets like the US and the UK, it would be inappropriate for us to encourage product discounting at this stage. Indian products are priced very competitively vis-a-is their respective international prices. Thus, from a consumer perspective, the need to discount should not arise,” said Jayont R Sharma, Chairman & CEO, Milestone Interactive Group.
He further added, “While online retailers are offering rampant discounts for games and especially for new releases, they are not the ones contributing to market development activities. This is eventually affecting the whole Indian gaming industry and leading to huge erosion in operating margins of the brick and mortar retailers, who have made huge investments in creating a conducive and engaging environment for potential gamers. If such a practice is not contained sooner, retailers will desist from making further investments in the category, and hence will affect growth. However, we are aware that the Indian consumer is also eager for and seeking attractive deals, and we too wish to support both online and brick and mortar retailers with new and innovative offers with back-catalogue titles as and when possible.”
The first new game to be affected by this new policy will be Infamous 2, so if you plan on preordering it online, make sure you confirm whether or not the retailer will be able to follow through on their promised discounts.