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The inevitable end of game retail (1 Viewer)

Sam Posten

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Latest evidence that it's real:
http://www.stardock.com/press/CustomerReports/Stardock2014.pdf
http://www.reddit.com/r/Games/comments/2cfcwx/stardock_customer_report_2014_pdf_retail_is_dead/
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Retail is dead
Only five years ago, our survey showed that 58% of our customers bought their software in a box, at retail. Further, 24% of them expected to be still doing so five years from then. In reality, it turned out to be 6%. Retail disappeared even faster than our tech-savvy customer base imagined it would.
On mobile
Mobile development is [generally] not viable as a business model...yet
We’ve spent the past 2 years interviewing countless developers (big and small) and concluded that making games or software for mobile (iOS or Android) is not a viable business model yet.

[*]Discoverability is terrible. It is difficult for quality products to float to the top. They’re flooded with drek and the user experience for exploring what is available is terrible. This is not something easily addressed.
[*]Price sensitivity is too severe. Prices are traditionally determined by supply and demand. There are not remotely enough active consumers to justify $2 on any mobile platform.
[*]Attachment rates are terrible. This is the nature of a mobile device. We do not expect to spend a lot of time actively interacting with our mobile device as compared to other devices (TVs with consoles or computers). As a result, users do not tend to become very attached to any particular item (with notable exceptions, which is why they’re notable).
[/list]Once a game or piece of software leaves the very very top of the sellers, the income fall-off is severe. Our poorest-selling DLC for PC games generates more income than nearly every iOS or Android developer app we’ve gotten numbers for. Let me emphasize this, we’ve talked privately to a considerable number of developers who have made “successful” iPhone/Android games, games you’ve probably heard of, and their numbers are depressing.
 

Morgan Jolley

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Whose customers? I think GameStop and Best Buy are doing quite well. Amazon's move into selling digital copies of games on PlayStation is genius, since it allows them to undercut Sony's PSN prices.
 

Sam Posten

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Um, as a fan of Amazon's announcement on that the actual results have been REALLY REALLY POOR. Not much past the launch lineup has been available from Amazon and NO DEALS to speak of.
 

Chuck Anstey

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That survey is too skewed to be of general value and if you include mobile game apps, then it will obviously be super skewed towards downloads as that is the only way. For PCs and mobile. downloading wins. I think the more interesting retail vs download is in the consoles because consoles have been pretty independent of the internet their entire existence and are expected to run as stand-alone boxes. I don't think consoles have reaches the point where consumers have an equal choice of buying a disc or downloading for the same game.

I still think on consoles, disc is the better way. My son has had friends over many times to play PC games and every time at least one of them had to wait for a few hours to download some game off Steam. If we had a console it would be just slip in the disc and go. I just can't quite see a console download only world where when friends come over you have to wait for hours to download 'their' game or people will burn up precious HD space to store their friends games so it will be available immediately when they come over.
 

LeoA

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Retail has a lot of life left in it for the console marketplace and the dedicated gaming handheld business. I suspect we'll enjoy at least one more generation after this of retail software.

Download got its start in this realm on the original Xbox, became an important secondary distribution system in the previous generation, and seems pretty much on par this generation especially on the PS4 and XB1.

Seems reasonable that retail will have a presence for one remaining generation at least. Especially if the console makers view DVD & Blu-Ray video playback as still important enough to maintain a a disc drive in their quest to be the center of our living room entertainment when the XB1/PS4 are replaced towards the end of this decade, I wouldn't be surprised in the least to see them take advantage of the feature as a secondary distribution mode for gaming as well.
 

Morgan Jolley

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The fact that this is the digital distribution generation but the consoles launched with 500GB HDDs and all games must be installed leads me to believe that an all-digital future is at least a full generation off, if not more.

The iPod has been huge for over a decade yet people still buy CDs. Heck, CDs have been out for 20+ years and people still buy VINYL. There will always be a market for physical media.
 

Aaron Silverman

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There are still way too many people for whom bandwidth is a major issue for digital distribution to replace discs entirely any time soon.
 

Chuck Anstey

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Aaron Silverman said:
There are still way too many people for whom bandwidth is a major issue for digital distribution to replace discs entirely any time soon.
But I wonder if those that distribute games don't care? Rather, once there are enough people who can download games then they are quite willing to lose those remaining customers for the near term to achieve the control that download only gives them. The attitude seems to be "It isn't how many games / movies we sold. What matters is how many were illegally (to them but not necessarily to the courts) copied or used." I bet you anything that if you could offer distributors a deal where they would only sell 50% of what they sell now but there are zero illegal copies they wouldn't hesitate for even a millisecond to take the deal. They are convinced that every illegal download or copy is a lost sale.
 

Sam Posten

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Yep, PC gaming and mobile gaming have both essentially written off those with limited bandwidth with zero repercussions. It's really not as big a factor as people want to believe today and in certain ways it's still chicken v. egg.
 

Chuck Anstey

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Well to be fair here, mobile has data as part of its requirement. Good luck just buying a phone and only pay for talk minutes. For a computer at this point in time, internet connection is pretty much guaranteed. A computer today without internet isn't really that useful for most owners.

Consoles on the other hand are still stand-alone gaming machines. Internet connections are used for multi-player gaming but that isn't required to play solo and many games are not multi-player.
 

Aaron Silverman

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Chuck Anstey said:
The attitude seems to be "It isn't how many games / movies we sold. What matters is how many were illegally (to them but not necessarily to the courts) copied or used." I bet you anything that if you could offer distributors a deal where they would only sell 50% of what they sell now but there are zero illegal copies they wouldn't hesitate for even a millisecond to take the deal. They are convinced that every illegal download or copy is a lost sale.
That seems to be what they want us (or at least politicians) to think. But I highly doubt that they're unaware of the current profitability of physical media (whatever it is). They won't write it off completely until packaged media sales no longer justify the effort. For the moment, Gamestop and the video game aisles at Walmart and Toys R Us are still packed whenever I go there.
 

RolandL

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I might be a small percentage of people who play PS3 games but, since I signed up for PS + , I have downloaded so many games that I don't have time to play them all to the end. Why buy when I get them for the $50 a year subscription? I know the games aren't new but what do you want for $50! :)

Bioshock Infinite, payday 2, beyond two souls, Tomb Raider, Batman Arkham City, Dead Space 3, Crysis 3 and others that I can't remember the titles.
 

Aaron Silverman

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No, the local GameStops tend to be packed with people all the time. One is in the mall, and the other is in a shopping center almost directly across the street!

The funny thing is, there used to be FOUR of them all along the same block, within a mile or so. (Two EB-branded stores and one GS, then the fourth opened up after the merger, with two closing over the next couple of years.) Even the two that closed seemed to do great business, although that was a few years ago now.
 

Aaron Silverman

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RolandL said:
I might be a small percentage of people who play PS3 games but, since I signed up for PS + , I have downloaded so many games that I don't have time to play them all to the end. Why buy when I get them for the $50 a year subscription? I know the games aren't new but what do you want for $50! :)

Bioshock Infinite, payday 2, beyond two souls, Tomb Raider, Batman Arkham City, Dead Space 3, Crysis 3 and others that I can't remember the titles.
If I were spending anywhere near $50/ month on buying/ renting games, I would be all over that. As it is, I probably spend $50 a *year* on games these days (and that includes my $15 Game Informer subscription/ Powerup Rewards membership :) ).
 

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