Previously, this was something that could not be done. Retailers did give publishers sales details for their games, but the data was always a few weeks late. Not only that, it’s hard to change the price at retail. The retailer might have to update the price stickers on all the game boxes and then make the same change in their database. However, with digital games becoming a possibility, many with no retail presence at all, publishers can now price their games perfectly with demand. They don’t seem to be doing this though.
I can only guess it’s because publishers are still stuck thinking like a retailer selling games. You see with digital distribution services, the system can automatically track various statistics and provide more frequent updates than retailers. In addition to how many people bought their game, publishers can now see how many people visit the digital page for their game, how many people have the game on their wishlist, how many people added the game to their cart but later removed it, and more. All this gives them an extremely accurate picture of demand for the game.
With this data I believe publishers can perfectly cater their game prices to demand. They can create a desired “demand curve” on a graph. This is basically a snapshot of where they want demand at any point in time after release. By lowering game prices whenever demand drops below a certain threshold, they can perfectly fit actual demand with desired demand. This will maximize their profits while at the same time maximizing consumer interest in the game.
They shouldn’t drop the price forever though. At a certain point, demand is so low that a price drop won’t make much difference. Before they even release the game, they should have an idea for the minimum price they will sell the game. For a $60 game that might be $20. Then, they simply watch demand and lower prices as needed to fit their demand curve they created beforehand. I think companies are finally starting to do this with the base game, but they still want to keep DLC prices at full price for all time.
Downloadable content (DLC) or other microtransactions should go down with time as well. There is no reason to have the base game go down but not the DLC. It makes sense for certain games not to do this, for instance, a cash shop in a MMO. Certain items will have continual demand simply due to the nature of the game such as Plex in Eve Online. Other DLC such as Section X in Star Wars: The Old Republic should go down in price. Once that content is old news, no longer the latest and greatest content, the price should be lowered.
In the future, game and DLC prices will go down regularly with time. Almost everyone will be able to get games or DLC for the right price that they can afford. They might just have to wait a little while. This is far better than the old retail-only days when you either bought it at full price or didn’t get it at all. I know lots of people who just didn’t have enough interest to buy various games at full price, but I know they had enough interest if it were half price. A little bit of money from a consumer is better than no money. By the time a game would be priced low enough, retailers had already replaced it on the shelves with the newest full price games.