Capitalism strikes again as Amazon phases out its preorder discount program for Prime members and looks to replace it with a $10 credit program.
The discount program, which launched back in January 2016, gave Prime members a 20 percent discount on all video games ($12 on a $60 game) during pre-order periods and within the first two weeks after release. That program was later restricted to just pre-orders in 2017, and now will get the axe in less than a week. Prime members are now restricted to $10 credit on pre-orders for “select video games.”
Best Buy ended a similar program called Gamers Club this summer and replaced it with their own $10 credit program, with no replacement on the horizon.
Amazon will also be ending certain benefits to its Twitch Prime program. Customers who view content on the popular streaming site will no longer be able to skip ads starting on September 14. Monthly subscribers will keep ad-free viewing until October 15, and annual subscribers (or anyone who picks up an annual subscription before September 14) will keep ad-free viewing until their next renewal date. If users subscribe to Twitch Turbo, their older premium program, they can retain ad-free viewing.
“Advertising is an important source of support for the creators who make Twitch possible,” Twitch wrote in a statement. “This change will strengthen and expand that advertising opportunity for creators so they can get more support from their viewers for doing what they love. We want Twitch to remain a place where anyone can enjoy one-of-a-kind interactive entertainment, and ads allow us to continue making Twitch the best place for creators to build communities around the things they love and make money doing it.”
GameDaily reached out to Twitch to clarify how this will impact streamers on their platform. We will update our story should we receive any additional comments.
Prime members are going to be understandably upset about losing the discounts and Twitch benefits, but it’s not entirely without precedent. As GameDaily contributor Mike Futter remarked on Twitter, moves like these are all about increasing market share. One day, Prime may not exist if Amazon feels like it can maintain its profit margins without the service.
The reason companies willingly take a hit on discounts like Prime is so they can strongarm competitors (GameStop in particular) out of the market. Amazon is notorious for putting a pinch on Barnes & Noble and similar stores by offering books at a bigger discount than even their membership programs can account for, but they make that profit back on premium items like refrigerators and laundry machines.
Should Sony or Microsoft find themselves in a position where PlayStation Plus’ free games and Games With Gold are no longer serving their purpose, they would phase these benefits out over a period of time. The problem with how Amazon is the Twitch Prime changes is in how sudden it’s coming to fruition for customers. Amazon’s challenge will be managing customer disappointment. Customers have a tendency to view these programs as entitlements, rather than the reality of cost versus benefit. And if there’s more profit to be made by cutting services, then companies are going to follow the money every single time.
For more stories like this one delivered straight to your inbox, please subscribe to the GameDailyBiz Digest!/* =$comments; */?>