Game Retailers Hurting Themselves With Digital Distribution

GameBiz recently had the chance to speak with Brad Wardell, CEO of Stardock, about pricing and distribution within the games industry. Wardell follows up a bit on the Demigod piracy fiasco from a few days ago, and mentions that retail outlets may be on their way out. "Retailers need to be careful about this stuff. They're kind of signing their own death warrants once they push digital distribution at the store. Once you have the thing set up — once you've experienced how to purchase the game or deal with it online — why would I go back to the store for the next purchase? Especially if the store isn't providing added value. If you're a retailer, you're killing yourself. If I can't get a game off Impulse, I'm going to Steam. I like stores, but I'm really lazy."

Comments

why the devs / publisher's LOVE online distro

[SethJohnson]

Online distro favors devs / publishers for several reasons:

• Cut the retailer out of the cost column.
• Reduce packaging expenses.
• Reduce overhead.
• Small guy boutique can make a fortune with just a spare-time effort..
• End user can't re-sell the purchased product.

The last is the huge one. Adobe and Microsoft have tried all kinds of tactics to supress consumers' ability to re-sell software. The game companies no doubt hate seeing used game transactions taking place without them getting a cut. With online distro, the re-sell market is crippled.

Seth