Earlier this year there was some concern in the gaming community as the price of new games from triple-A studios started touching the R1,000 mark.
A handful of console titles, such as Microsoft’s Quantum Break on Xbox One, even exceeded R1,000 at launch.
Distributors have told MyGaming that they have worked hard with partners to keep game prices below R1,000, but there is only so much that can be done against the weakening rand.
Dion Wired, for example, is selling FIFA 17 for both current and previous generation consoles on its website for R1,150.
They’re not the only one either. Perusing stores like BT Games will reveal games like Attack on Titan selling for R1,099 online.
In fact, visit any large games retailer in South Africa and you will notice that prices have creeped past R1,000 for a handful of titles.
If you shop around a bit (both locally and internationally) you’re likely to find better pricing, but we’re more concerned that these prices set a precedent as they continue to soar upwards.
We’re also not saying it’s the fault of retailers – there are a number of factors that cause increased retail pricing, including the exchange rates, and forward cover (or forward exchange contracts).
Exchange rate and forward cover
These prices are usually set well in advance and accommodate both for market need and what people are willing to pay.
We asked AWX, Incredible Connection, and BT Games about forward exchange contracts and the recent sudden increase in video game pricing.
AWX explained that forward cover could work both ways, sometimes hindering local pricing if taken at the wrong time.
“Often, forward cover is purchased that allows for a more stable price point for a period, but this is only functional for a limited period and can also have the inverse effect,” said AWX.
“If forward cover is bought at the wrong time, even if the rand strengthens, games will still have to be purchased from the publisher at that higher forward cover rate.”
The company also said that gaming prices tend to be stable and gradually increase or decrease, and that if devaluation of the rand occurs for an extended period, then gamers should expect to see prices change.
Incredible Connection and BT Games did not respond by the time of publication.
*Prices were correct at the time of publication.