Deep price cuts for CoD4. What's going on?

CoD4 CartNo doubt, during the holidays, many of us have seen Call of Duty 4 going on sale for as little as $38 at major retail outlets such as Target, Best Buy, and Circuit City.

These deep discounts have caused some to wonder if CoD4 is in trouble, as far as sales are concerned and if Activision is trying to drum up more business because of lagging numbers.

Analyst Michael Pachter has a reasonable guess for the low pricing–stores are trying to get customers into their shops by luring them in with what is known in the business as a "loss leader." The idea is to advertise a popular commodity at below cost in order to draw people to their stores in the hopes that they’ll browse and buy more things.

Pachter of Wedbush Morgan said,

COD4 is selling very well, so much so that I think it’s been positioned as a loss leader to drive store traffic, particularly at Circuit City. I’ve seen the same ads, and it is a retailer price cut, not a publisher price cut.

There are differences in terminology between how the two cuts are advertised (long story). So the answer is that holiday software sales were great (more from GameStop on Jan 10), and retailers know that they can offer discounts to drive customers to their stores. COD4 has been holding its own at $60…"

According to recent sales figures, CoD is raking in the cash with well with over 2 million copies sold for the Xbox, PS3 and PC during the month of November, so concerns over CoD4 not doing well don’t agree with the sales numbers.

[via newsweek]


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Author: GamerNode Staff View all posts by

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