A move to digital also works to kill off the second-hand market, which I imagine the industry would not be unhappy about. I agree it seems to be going that way. There are already quite a few games you can only get digitally.
I’d say we’re at least 5 years from the digital market replacing the physical one in the same way that itunes replaced cd stores. Honestly, though, I think it’s more like ten.
It’s clearly coming, but we just don’t provide internet speeds that can safely accommodate the download size of new games in a convenient way, and we’re a long ways off streaming AAA titles. Games will only get bigger too, in ways that video and music don’t.
It’s common place that digital launch dates get a 2 day window in lieu of the physical launch, because that’s the given time-frame to download modern games at the rate of a normal household would have.
I think that (like other fields like music and books) we’ll still see physical media hang in to some extent. For some people it isn’t practical to download or stream, and for others there is still a collectibility or attraction to owning something tangible (especially when it comes to collectors editions, or games that come with maps etc.).
But digital is becoming and has already become much more common way to buy games, and I don’t see that trend reversing. Even if people do have to pre-download games ahead of release (which is already pretty commonplace as you say).
I maintain that we’ll never see a digital market for beer though - I think people just cherish the physical product too much.
And hairdressers. It’s very difficult to get that done well over the internet.
I don’t know … you could have one of those automated things and you just load up your app and select the style you…
Umm… off to the patent office!
For all I disliked Game buying up Gamestation, fortunately their shops are nowhere near what you describe for Gamestop.
Last story I read they still sell more music via CD in the UK than through downloads.
I still see the eventual end result being even the (dedicated) hardware will go, Sony have experimented with it for PS3 games where you access over any standard operating system and the processing is done at their end.
I think downloads are probably the future of gaming but it is a ways away. Tim is right. And keep in mind people still buy physical copies of music, books, and movies in high numbers. Even if it’s much lower than their respective peaks it’s big enough that the companies will never give it up.
A few other things, in addition to the collector mentality and piracy stuff:
That kind of high speed internet isn’t available or affordable to a lot of people who play games in the US, more than I think people realize.
For a lot of people the used market makes gaming affordable. Not even necessarily because they buy used, but because the new game they bought has resale value. The same people may not be able to pay for systems with that kind of storage.
The video game industry relies heavily on Christmas and it doesn’t have the same zing to put a digital download under a tree.
I think downloading has been great for small publishers. Personally I don’t use it as I think Sony’s security is pretty sloppy. Aside from the big hacking in 2011 there are lots of small instances.
Digital’s been a total game-changer for the PC market and indie gaming across all platforms, but I don’t see the mass consumer base wanting to switch away from physical products for mainstream releases, if only because the high price tag makes the ability to sell them on a necessary compensation. Are people really going to still buy £50 games in large quantities if there’s no safety net of return or intrinsic value attached? That digital market places don’t release sales data doesn’t convince me it’s surging ahead of physical.
This is what deters me from digital in the main.
I buy a physical copy and don’t get on with it, I can always flog it, that’s not so with digital.
I think that’s true most places. The tech press get excited by the latest stuff but it can take a long while to filter down. What people on average have for internet speeds is a fraction of the fastest available, which is only in selected areas and often expensive.
In the end though I think it’s pretty inevitable but something that will take a fair amount of time to come to pass.
One thing to factor in though is they don’t necessarily need to. I don’t know the computer game market but in books half the cover price goes to the retailer, actual physical production is pretty cheap but you also have logistics and warehousing which means for a $50 item you’ll get back about $20 at best. So for a direct download they could halve the price and make back the same money.
You can see that in music where the price of a single now is cheaper than what I paid for my first single in 1982 but for e-books the publishers have worked hard to retain a certain price level so they aren’t really much cheaper.
And I also wonder if that $60 US price tag for games is high in part because it is factored in that it must offset some losses due to the used market.
There’s also the issue (which is maybe more unique to console gaming) where some of the cost of the hardware is recouped through software sales for some of the big firms, which has an effect on pricing.
(Pretty much every big new console gets some news story about how it’s actually sold at a loss, but the company ultimately makes a small profit so long as the buyer also at the same time buys a game or subscribes to a service or whatever).
That may make it unlikely that we’re going to see games (from certain publishers at least) plummet in price any time soon.
I think they charge $60 because they’ve found the market is willing to pay $60. Price is one of those things that’s hard to calculate (the Price is Right gameshow proves you can’t instinctively know the price of anything). So they start there, which really means companies start around $30 per game with the rest going to distribution and retailers. We’re so used to those price points that we don’t challenge them. And they represent good value for money compared to other entertainment medium.
Direct digital then is a much more attractive offer for developers - you can cut prices and increase profits. I think the future is buy on demand, accessing new levels and such - that’s pretty obvious these days. In an entertainment saturated market it’s more important to get players to play your game first, so I can see a time where you buy the first couple of levels and then buy the rest - removing the block of having to pay alot up front (which others have mentioned is a factor in deciding to buy physical games). Hell, I think the subscription model will eventually take hold where you pay $10 a month to access every EA game including new releases (unless consumers are will to pay more, which they probably are).
Gamestop have 4000 stores in the US. They’re closing the 150 worst, but I expect more to close over the next few years. Like PC World, Radioshack, Comp USA, Circuit City and so on, retailers in the tech space are on deaths door. At a certain point in loss of business the company just isn’t viable any more. Someone mentioned high speed internet as a barrier that necessitated brick and mortar, but we’re already talking about the PC and console owning households - I doubt very many of them don’t have internet already. Hell, Netflix is in more homes than cable. And as for big games, you don’t download everything before you start playing. The imports can be drip fed over the course of the game.
Here’s the path for physical retail sales. They’ve fallen in half in 7 years. Gamestop is going the way of Blockbuster, and I don’t know if their diversification play will prevent that. If they continue on this current rate you’ll see very little retail sales in 5 years, and what there is will have to be thru big box retailers who themselves might cut their investments in video games like they’ve done for DVD’s.
The only play is a lifestyle hobby store that combines merchandise, comics, video games, movies and so on. Lots and lots of companies have tried to do that and utterly failed. I’m not sure what the secret is that the right entrepreneur would have to bring. A degree of exclusivity would be nice but it’s unlikely to be offered. Still, it’s such a big market that it feels like someone will crack the code and deliver an outstanding retail experience for gamers and comic fans.
GameStop already does this. The only thing they don’t sell is comics.
The crazy thing is that they’ve been $50-$60 since the days of Atari. They literally have not gone up with 35 years of inflation.
You are right with the future being on demand, but that is also a challenge they’re facing. How do you convince people they’re getting a complete game if you’re going to sell more of it later? Some publishers have figured out the sweet spot but others have not.
It’s a big sign that consoles and games have always been roughly the same price - compared to increases in movie tickets or comics