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Blitz Economics - WG Discounting strategy - Who benefits?


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stubbo66 #1 Posted 15 May 2019 - 12:30 PM

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You may have read in my "is it worth it" thread that WG strategy for how they discount tanks has changed somewhat since the start of the year.

 

A classic example was todays ISU-130 entry in store. Let's look at it's price history and break things down.

 

Sale Date Price Discount Slots Camo Other Notes
31st August 2018 15,000 gold --- --- --- --- Basic tank first sale
31st August 2018 16,000 gold 10% 6 --- --- First sale
31st August 2018 14,000 Gold 15% 9 --- --- First sale
5th December 2018 12,500 Gold 15% --- --- --- Second sale
Today 8,000 Gold         Third sale, compensation 3.1M Credits (7750 Gold equivalent)
Today 9,500 Gold 30% 9 Yes   Third sale, compensation 3.1M Credits (7750 Gold equivalent)

 

So the lines to really look at are the ones without slots (in red above). Now then the tank first went on sale it had a heft price tag, 15K gold, but when it returned in December, it obviously came out cheaper and was sold with an advertised discount of 15%...which was more or less accurate based on the launch price.

 

But today, the tank landed in store again, this time for only 8K for the same offer....but apparently no discount at all, when in reality it was a 46.66% discount. So why the change in the way the offers are shown. And this isn't a one off, this has been the case since January as I stated.

 

The other thing that has been prominent in sales this year are the compensation values on all tanks sold. Now a really telling story here was the new OBJ252U, launched in store for a standalone price of £38.99 here in the UK, which in gold terms is worth about 16,000. But the compensation value for the tank was only 7,500 gold.

 

Now compensation is a good thing, more so in bundles of multiple tanks, but it helps us to understand the real value that WG attribute to the tank and what it will reach eventually in store (if not lower).

 

So the change in policy on how discounts are shown seems to be a way of hiding how much tanks were sold for before, and not letting those know who bought them how much they could have saved if they had waited. In the case of the ISU-130, if you waited 9 months and saved 47%....that may be something real you would want to consider in future.

 

In fact more and more people, CC's amongst them, are no longer buying tanks when they first come out just because of the massive over pricing.

 

And that's the real story here. We have always recognised how much new tanks cost in game, it's a premium pricing model for the privilege of offering a new tank, call it a luxury tax.

 

Going back to the OBJ252U, how many people would buy the tank still if the offer was listed as  113% luxury tax on the price label, which is basically what WG is doing with the pricing but just not spelling it out in the offers.

 

Now in many ways the previous discounting model was flawed as it set the launch price as the value of the tank, but that didn't match with the compensation model but it did make every offer afterwards valid for discounting terms. Think of it like a retail model. The launch price is the RRP and every offer after that is on sale.

 

Now consider in any other walk of life where something is sold in limited numbers on first release with a luxury tax to drive the price up, only for it to drop in price later to make it less of a luxury item until it finally does reach its true RRP (or value)...I can't think of anything outside of the gaming industry where this happens.

 

In normal market situations, this would be how you control supply and demand, if you know you can't supply enough of something, you push its price up so only those that can afford it will get it but keeps your costs in check and allows you to recover on them while being able to ramp up that supply chain if the demand is there. WG don't have that situation, except for wanting to recover the costs of development, but there is no need to over price it to do that as more would buy the tanks if sold at lower price points.

 

So who are WG trying to benefit with the higher price launch models, it isn't the buyers, they don't feel like the lucky ones for getting a limited edition...because it isn't limited...just expensive. It isn't WG as higher prices restrict sales opportunities. They aren't in competition with anyone, so they are free to set their own pricing model, but they have a customer base to supply and keep interested and a need to satisfy then with new content to keep the game fresh, but at what cost?

 

All the change in discounting has done is highlight how much of a premium you are paying for tanks on the first and second drops in the stores....surely that's not a good thing to focus on, but it's certainly something I will more and more in the economics threads.

 



_diabolique_ #2 Posted 15 May 2019 - 12:58 PM

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It's all true but if you like certain tank there is risk you can not see it again for a long time or only in crates. Look at Scorpion G or Wz120-1G - it's like over 6 months with no 2-nd sale.

Mjr_Eazy #3 Posted 15 May 2019 - 06:41 PM

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Gr8 work Stubbo, my guess is the data they have shows people will pay a premium for a new tank, you always see afair few event tanks gold-ed to completion day 1...

 

To me the model is similar to electronics, new tech gets a premium and prices come down, I know there are other factors such as reduced manufacturing costs as production evolves but they could factor that in to pricing but they don’t need to, large plasma tv’s were 10k plus on launch and dropped on each iteration, same with lcd, dvd, blueray, cd etc etc. People pay a premium to be the 1st to have something, they know they can buy 6, 9, 12 months down the line for a fraction of the cost.  I think WG are trying to use/create the same demand.


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stubbo66 #4 Posted 16 May 2019 - 12:06 PM

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It's a shame really, but launch tanks, especially at tier 8 often come out at more than double their actual worth. Now part of that is bundled content like slots etc., and you feel like you're getting better value on those, but for many (and I count myself amongst them) credits are just not an issue and would much rather get the base tanks and supply it myself....but without the discount it feels like a painful purchase and you almost feel compelled to go for the larger offer...that's a marketing trick of course, you feel like you're getting better value for money when you never needed to spend the extra in the first place.

 

I really object to the selling of tanks for hard cash though instead of gold for anything except the beginner (low tier) bundles. The small bundles at least make it obvious to buyers what they are spending, gold is a hidden currency especially designed to obfuscate the real monetary cost of your purchases but hopefully now many of us are well clued up on sensible gold management. But selling high tier tanks for hard cash when gold is the core in game currency and provides benefits to WG and the players to encourage its use just gets my goat!






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