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Game Retailers Facing Digital Distribution Transition

This editorial at Eurogamer examines how the games industry is dealing with the growth of digital distribution — a transition they're handling better than other entertainment industries, but not without a few stumbling blocks of their own. "The examples from other industries undergoing this transition are not promising, since they tend largely to focus on metaphors involving creeks and a distinct lack of paddles. Bricks-and-mortar retailers of music and movies have largely sat back and grumbled while their businesses were hijacked, first by online retailers of physical product and then by digital distribution services. ... Specialist games retailers who follow that model face little more than a decline into insolvency in their medium-term futures. Worse again, they face competing with far bigger companies to retain their slice of an already shrinking pie — as boxed game retail sales fall off in favor of digital distribution, supermarket chains are increasingly seeing high profile games as a worthwhile loss-leaders."

25 of 155 comments (clear)

  1. And the hardware? by houstonbofh · · Score: 2, Insightful

    Something tells me that it will be harder to download the game hardware itself. And yes, you can buy it online, but there is a huge "I want it NOW!" market that online and shipping will never satisfy. But the margins will have to come down on many things, and value (Expertise perhaps) will have to go up.

    1. Re:And the hardware? by Opportunist · · Score: 2, Insightful

      Quite the opposite. A specialized store will probably have it, or at the very least know immediately where to get it within 2 days. A big store using computers as a sideline, additional income will only offer you what's mainstream and most of the time won't bother with special orders at all.

      Especially with hardware I do not want to deal with stores that sell it alongside of consoles, dvd players and toilet paper. Neither with online stores. The reason is simple: It's cheaper for hardware manufacturers to deal with RMAs than to bother with QA. In other words, more and more hardware you buy simply does not work out of the box. And then I want to deal with a store that will give me immediately a replacement instead of sending it in and waiting 3-4 weeks 'til they get a replacement from their distributor.

      --
      We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
    2. Re:And the hardware? by WhatAmIDoingHere · · Score: 3, Insightful

      They would love to offer the games for cheap on Steam, but the game publishers don't want to piss off the B&M stores.

      Also, 90% of the games I buy through Steam are weekend deals, where you can find new releases for maybe 30% off. Impulse is the same, I just bought the new Red Faction game for $15.

      --
      Not a Twitter sockpuppet... but I wish I was.
    3. Re:And the hardware? by sopssa · · Score: 2, Informative

      Games are computer software, and usually you pay for a license with them too (be it Photoshop, Windows or Visual Studio). Just because they're entertainment it doesn't change the fact.

    4. Re:And the hardware? by Vaphell · · Score: 2, Interesting

      it's an entirely artificial distinction and it's bullshit. I know it is in the law but it should be straightened up. I guess we just love to have overly complex laws to screw us from behind
      Music, movies, books and software share similar model - pay a lot in advance, product supply is unlimited and copyright is supporting the business model to recoup the initial investment. Hell, movie dvds shine exactly like game dvds. Why the games are allowed to play by the different set of rules?
      If one day MPAA started to put some EULA like bullshit into the dvd movie releases Joe Average would just think they are fucking insane, ignore it entirely and continue to do his thing... yet game publishers have such privileges and nobody questions it.

    5. Re:And the hardware? by shentino · · Score: 2, Insightful

      I can download hardware, sorta:

      Project64
      Dolphin
      GnuBoy
      ZSNES
      Gens

  2. Why are there still game retailers? by Animats · · Score: 4, Interesting

    Record stores are dead. Video rental stores other than a few major chains are dead. Why should game stores stick around? The only one near me is a tiny one next to a Cartridge World (ink, not ammo).

    The A titles may still justify some shelf space at WalMart, but I don't see any remaining need for standalone game stores.

    1. Re:Why are there still game retailers? by badboy_tw2002 · · Score: 5, Insightful

      Two words: used games. You can't sell a digitally downloaded game back after you've played it. A game store will take a box title back. Though I guess if there were digital download rentals that would put another nail in the coffin.

    2. Re:Why are there still game retailers? by sopssa · · Score: 3, Insightful

      That's probably some people, but most also don't care about it. For me it seems just a lot of work to get something like $10 back from it (and then you really lose the value you spend for buying the game because you dont have it anymore).

    3. Re:Why are there still game retailers? by Ifandbut · · Score: 4, Interesting

      1) If I lose internet one day and I want to play a random game I have it is alot easier to install it with an actual disk (however some DRM is making this moot).

      2) If I move and have to go back to 1.5Mb internet connection then it will be faster to install from a disk then patch online instead of downloading the whole game.

      3) For some games the manual is extremely valuable (NWN, KOTOR, even WoW for the lore) and it is easier for me to thumb through a hard copy instead of a PDF.

      4) This may make me appear old fashion but I still like a physical version of the product.

    4. Re:Why are there still game retailers? by Narpak · · Score: 2, Insightful

      Personally I believe that digital distribution will continue to grown. I have a 12mb internet line that is very affordable and have no qualms about buying games through steam or other such services (though predominantly I use steam). The games I have bought is in a nice list that makes me able to reinstall at a whim. Nothing being able to resell my games isn't really an issue for me since I didn't use to do that before anyway; however I can see how those that do that regularly could see this change in distribution method as a bad thing. Though I believe that for good or bad it is a change that is inevitable, if nothing else it will reduce resource consumption to a certain degree by eliminating a part of the packaging and shipping associated with traditional distribution.

      These events have lead to many shops relying on the sale of entertainment distribution in various forms to close their doors, and will probably continue to do so. While this is no doubt a tragedy for those either making a living in that sector, or enjoy frequenting such establishments, it is inevitable fallout from our technological advance. It is not the first, nor the last I assume, time such a thing has happened.

    5. Re:Why are there still game retailers? by Blue+Stone · · Score: 2, Informative

      >Why should game stores stick around?

      Well with the European Parliament being bought off by the large music and movie cartels, such that somone who is caught downloading a few dodgy torrents is kicked off the internet, and can no longer spend ANY money online, I'd say all those bricks & mortar distribution points may well see a resurgence in use!

      Nice to see those large monopolistic bastards and their political bitches doing something for the little people, no?

      --
      Corporation, n. An ingenious device for obtaining individual profit without individual responsibility. - Ambrose Bierce
  3. If I can't sell if used on Ebay... by commodore64_love · · Score: 3, Insightful

    ...I'm not buying.

    The Digital download would have to really, really cheap (less than $10) to make it worthwhile for me to participate in this new economy. Why 10? Because oftentimes I buy a game on DVD for $20, play it, and then sell it used for $10-15, so my actual out-of-pocket cost for most games is less than $10 overall.

    --
    "I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
    1. Re:If I can't sell if used on Ebay... by Junior+J.+Junior+III · · Score: 2, Informative

      If you wait about a year or so, or sometimes longer, depending, games come down in price. Buying immediately at full retail when they're released is foolish unless you've got a ton of disposable cash.

      As an example, when Half-Life 2 first came out, I waited, because my PC's hardware wouldn't have been up to running it, and I didn't want to spend $1000 or so just to upgrade to a new box so I could play one game. Within about two years, I built a PC that exceeded the high end specs from back then, for about $400, and took advantage of a deal where I got the Platinum Edition of HL2 for $5 on clearance at Best Buy.

      I generally buy games "behind the curve", after they've come down in price, and after enough time for the hype to wear off, and for it to become common knowledge whether the game is actually that awesome or not.

      --
      You see? You see? Your stupid minds! Stupid! Stupid!
    2. Re:If I can't sell if used on Ebay... by Junior+J.+Junior+III · · Score: 2, Insightful

      That's totally fine by me. I depend on people like that to stock shelves in used game stores with stuff they bought and don't want anymore. I'm more of a collector, and don't generally sell off anything I own, unless I have more than one of it. A lot of people buy a game, play it until they beat it or are bored with it, and then sell it. Some people really want to be the first to play a new game, and enjoy being the one in their group of friends who has all the insider knowledge, and who has gotten there first -- it gives them a certain social status as an alpha geek.

      Once you have a house payment and a car payment, and you want to sock all extra money you possibly can away for retirement, buying new seems a lot less appealing. And I'd rather not waste my time and money on stuff the industry over-hypes, over-markets, and fails to develop and deliver fully on the promises that their hype machines make. I got sick of the fanboi mentality years ago, and quit buying things as soon as they came out, only to discover that they weren't anywhere near as fun as I'd been lead to believe by the marketing machine, and reviews weren't any help either. And waiting for months and years for some game to come out. It's a lot better for me to cherry pick A titles at bargain bin prices long after the hype of new has worn off them.

      And trust me, they're still as fun to play. Pac Man and Asteroids are still a blast to play. New isn't what makes it fun for me. If I ignore for the most part what's happening in the current generation, I can act like it's cutting edge even though the game is really 5-6 years old.

      --
      You see? You see? Your stupid minds! Stupid! Stupid!
    3. Re:If I can't sell if used on Ebay... by carou · · Score: 3, Funny

      I generally buy games "behind the curve", after they've come down in price, and after enough time for the hype to wear off, and for it to become common knowledge whether the game is actually that awesome or not.

      Oblig xkcd.

      The cake may or not be a lie! (I wouldn't want to spoil the ending for you).

  4. One thing though by dagamer34 · · Score: 4, Insightful

    Digital downloads need to be loads cheaper because of the following reasons. They can't be: 1) Borrowed 2) Rented 3) Returned which means that if someone wants to buy a game, they have to get it straight from the publisher. Plus, our broadband infrastructure isn't really equipped to download GBs of data as the primary way of purchasing games. And then you have to factor in the cost of bandwidth that we'll probably pay for in one way or another and you begin to see that the real benefits are only for the publisher and not for consumers. I'll stick with discs, thank you very much!

    1. Re:One thing though by Narpak · · Score: 4, Informative

      I have a 12mb line and always seem to get a nice 1.2mb/s download rate from Steam. Also I find using Steam for the majority of my computer game purchases very handy, I can buy it from home, set it to install (and it does relatively quickly with my line), have it automatically update to the latest patch, and during those rare moments when I lose my DSL connection (happened twice last year, both lasting about two days) I can set it in offline mode and continue enjoying my games. Visiting my parents I installed steam, logged on my account, installed one of my smaller games (their computer is getting on in years), played it until I left and un-installed. Everything worked without no fuss. Considering that, for me, a computer game only have a few years (at best) expiration date this system suits me fine; and it is so convenient that I now buy more games than I did the years before I started using steam.

  5. NO!NO!NO! by XPeter · · Score: 3, Insightful

    Uggh. I've had some HORRIBLE experiences with digital distribution for games (EA Download Manager, Steam).

    Give me a hard copy over digital any day.

    --
    "The difference between genius and stupidity is that genius has it's limits" - Albert Einstein
    1. Re:NO!NO!NO! by MetalPhalanx · · Score: 4, Informative

      The tl;dr version: Steam Support can really suck and that is the reason that many people hate it. See below for an example.

      In my experience, there are three camps for Steam. Those rabidly against it due to the rights management, those who love it, and those who have had an experience with Steam "Support" and now loathe it. I'll give personal experience as an (anecdotal) example for you:

      I bought Champions Online off of Steam on Sept. 7th.
      To my dismay, when I attempted to activate my CD key, it was already activated. I called Cryptic for support, and after speaking to a couple of employees, was told that since Steam was my distributor, I needed to contact Steam to get a new CD key. i.e. it was Steam's fault. I submitted a support ticket with the requested information within an hour of buying the game. I received the confirmation email and a ticket number from Steam Support, everything to verify that they actually did receive my support ticket. Researching their average response time, I gleaned a community accepted value of "3 to 5 days".

      Fast forward about 4 weeks (October 9th).
      After weeks of checking, my ticket was closed with no reply. I logged in to check it, and status was set to closed. There was no indication that anyone had even looked at the ticket. I re-opened the ticket, left a polite but firmly displeased message about the quality of the support and restated my request to get this resolved.

      Fast forward another 2 weeks (October 23rd, this past Friday).
      I FINALLY receive my first reply from Steam support. It's a one liner asking me to paste my conversation with Champions Online support into Steam. Since I talked on the phone, I can't do that. I sent a note explaining this, and have yet to receive another message back.

      The situation as it stands now, is that the close group of friends I bought Champions Online to play with spent about 5 weeks intensively playing it, and have since moved on to other games (Our usual schedule for many games). I'm now left paying $50 for a game I never got to play, and by the time their glacial support gets around to solving it, I've lost all desire to play.

      I'm now a wary customer as well. I've been burnt and am now much more reluctant to deal through Steam, with their lack of phone support and awful online support. Given that my friends and I tend to consume at least one new game a month or so, they've lost a pretty regular customer. Due to my experience, some of my friends are also starting to buy games elsewhere as well.

    2. Re:NO!NO!NO! by Eevee · · Score: 2, Insightful

      Did you pay with a credit card? Chargeback time. Product was defective (bad CD key) and Steam hasn't fixed it.

    3. Re:NO!NO!NO! by MetalPhalanx · · Score: 4, Informative

      If you chargeback they suspend your account, removing access to all the games you have ever bought.

      I looked into it and discovered that little gem. It seems almost criminal.

    4. Re:NO!NO!NO! by Alpha830RulZ · · Score: 3, Informative

      If they do that, report it to the card issuer (VISA/MC) . The card issuers are quite firm about how the people who use their cards are treated. Retaliatory behavior not supported by a court judgement could result in the vendor losing their capability to take credit cards. That's a healthy sized hammer.

      --
      I was taught to respect my elders. The trouble is, it's getting harder and harder to find some.
  6. Re:DNAS Error -103 by commodore64_love · · Score: 2

    Online play? What's that? (I kid.) No actually I have no interest in being harassed by a bunch of kiddies that lack manners, so the problem you describe has never happened to me. I prefer standard offline games - me versus the computer.

    --
    "I disapprove of what you say, but I will defend to the death your right to say it." - historian Evelyn Beatrice Hall
  7. Re:Steam As An Example... by sapphire+wyvern · · Score: 2, Informative

    Your point 2 on non-portability is incorrect. Right-click on the game you want to back up and select "Back up game files", and there's a wizard that will step through the creation of a back-up archive that you can easily burn to DVD. The back-up archive includes a reinstallation utility that puts the games back into Steam without any messing around, and the wizard includes the choice of whether you want CD-sized volumes, DVD-sized volumes, or larger, and they're just standard Windows files so you can burn them onto whatever media you like using whatever program you want.

    I keep backups of all my Steam games on my file server so that I can keep current games on my laptop's hard drive and store other games elsewhere, and so that I can migrate the games onto alternative devices without re-downloading, and it works well.