Discounted Cash Flow (Destiny)

by narcogen , Andover, Massachusetts, Wednesday, June 24, 2015, 22:44 (3446 days ago) @ unoudid

And I did it for the bonuses. Having unlockable bonuses ensures I will not ever pre order a game. It is why I didn't get a PS4 for Destiny, too. I knew I would get that stuff eventually, so I thought "eh, no biggie," and stayed within my ecosystem.

So yes, 343 has stuck to their principles, which I applaud. They will probably lose a ton of preordery sales they could have had, though.

343 has gone up in my estimation because of that, BUT, preorder bonuses are good for business.

Which is better. Guaranteed pre-order sales and then subsequent returns, or just straight sales?

The discounted cash flow model says that guaranteed pre-order sales are better because money now is worth more than money later. This is partially because inflation is assumed, and partially because a preorder now, even with the chance of a return later, is viewed as less of a risk than straight sales later, and the discount rate goes up the longer you wait for "later" to get here.

Whether it is true in practice or not depends on whether or not the financial loss represented by the returns is greated than your assumed discount rate.