It’s Not The Answer: A Look At Digital Distribution

First Published April 8, 2012 via Xtreme Gaming 24/7

The fall of a certain video game retailer has put all of us, players and journalists alike, into a bit of a headless chicken frenzy. On the one hand we really want a shop like GAME, we care that they specialise in our chosen devotion and we are very sad that jobs have been lost and lives affected. On the other, we are absolutely livid that the company let this happen and really want to point some fingers. There has been a complete mismanagement of the retail sector here and in the (apologies for the political rhetoric) current economic climate and times of austerity, this is has been simply a long drawn out suicide. What qualifies me to say that? I worked for Woolworths (and left before the closure of the business) and the similarities of what was happening within the company appear to be uncanny. It also doesn’t take Robert Peston to work out that, in my town at least, three stores, all owned by GAME Group (2 GAME, 1 Gamestation), within 150 yards of each other is absolutely silly.

One of the key factors that many people have raised is that GAME had a prime opportunity to adopt a Digital Distribution model or at least adapt their business to cope with what the Next Generation of consoles were providing. So let me give a very sweeping statement right now.

Digital Distribution is not the answer.

Well at least not for consoles yet anyway. Yes it’s convenient, yes it’s economical for all concerned and yes, it does the job of completely taking out that troublesome “pre-owned” market that game publishers hate. But with the rumours that the next Xbox maybe digital only, this can only mean one thing for you, the humble consumer, and me. Empty Wallets.

You’ll see that, using Xbox Live as a model, I’ve researched some prices of games recently released on the shop as well as their counterpart prices on arguably the two biggest entertainment retailers online. The difference in prices is ridiculous, especially when the model is cited and marketed as passing savings on to customers. The price comparisons will speak for themselves and I have no need to sensationalise them. But the problem here is that the games industry is so completely out of touch with its consumers that digital distribution is just that. Another means of distribution. Where, I argue, is the saving for me as a consumer when I pay nearly £20 more for a game on my console than I do at Amazon? If a gamer core age is teenagers upwards who live in families with fairly middle income, how does that extra £20 sit on their credit card bill? It doesn’t sit pretty I imagine. Where are the savings on production costs and physical distribution?

A few prices for you to compare:

Correct as of April 7, 2012

FIFA 12 – Released September 30, 2011:
Amazon.co.uk (£24.99)
Play.com (£29.99)
Xbox Live (£49.99)

GEARS OF WAR 3 – Released September 20, 2011:
Amazon.co.uk (£21.12)
Play.com (£39.99)
Xbox Live (£49.99)

SINGULARITY – Released June 29, 2010:
Amazon.co.uk (£13.30)
Play.com (£14.99)
Xbox Live (£19.99)

DEUS EX: HUMAN REVOLUTION – Released March 2011:
Amazon.co.uk (£17.94) – Note: this is “Limited Edition”
Play.com (£12.99) – Note: this includes a bonus mission pack
Xbox Live (£24.99)

CALL OF DUTY: BLACK OPS – Released November 9, 2010
Amazon.co.uk (£17.26)
Play.com (£24.99)
Xbox Live (£44.99)

HALO REACH – Released September 14, 2010
Amazon.co.uk (£19.47) – Note: the Limited Edition box is only £25.95
Play.com (£14.15)
Xbox Live (£24.99)

 

I know the argument from studios will be that a game should be fairly priced, and yes, when new, I understand and happily accept this and will plough money into the industry. I know another argument is that the prices are such because of the overheads of distributing your game via Xbox Live of PSN. Which is where this entire model becomes ridiculous. Any fairly sensible consumer will wait for the price to drop or find a cheaper alternative. We’re very savvy people us gamers and we know how to hunt a bargain. The fear is that if a console such as an Xbox successor became digital only, how it would kill the market and monopolise the cost of games. If you have no choice but to pay £40-£50 for a game online, then you do. If you have a choice between a few £20-25 games online, new or recent, then you’re more likely to get both.

This article obviously omits the great work that the model does for highlighting independent developers and innovative gaming. PSN and Xbox Livendue to the nature of their model have been able to release, quite honestly, some of the best games to ever grace us. Limbo being a case in point. But they could be doing so much more for the main studio blockbuster games. I’ve also not got on to the cost of movies and such, especially as now Netflix and Lovefilm (Sky as well to some degree) have provided an incredibly cheaper alternative to the film rental systems that are in place from Microsoft and Sony. The market for releasing high-end big games on the digital console market needs to change and fast.  It’s not broken by any means but it needs to take a reality check. If our biggest video game specialist retailer went under, then what does that say about what we consumers can afford?

In some ways we will always lean towards physical distribution because we like to accumulate things. It’s part of our capitalist state of mind that we must be able to show our status by what we possess. Music has overcome this by making the digital player itself a symbol of status, but games will not be so lucky. Music as well lowered and changed its prices in order to compete against physical distribution and it has succeeded. Don’t get me wrong, I don’t want to lower the cost of games, or pay less to the overworked souls that toil to make us these graphical extravaganzas. I don’t want to pay over the odds to big publishers when it really isn’t on.

You may think it’s rather British of me and you’re probably right. But let me pose you this dilemma. You want to buy a game that’s been out for a few years. You missed it first time round and now you have the time and inclination to play it. You can pop to a store and find it pre-owned for about £8-10 (“Boooo, Hissss” – Publishers), pop online to a retailer and find it new for £15-20 or download it for £30-40. What are you going to choose? Exactly. Now, same scenario, except there’s no pre-owned option. Go to an online retailer for £15-20 or download it at £17-25. What would you do? Remember the cost of postage and packaging as well as the time it will take to deliver it. I think digital wins hands down, don’t you? That’s all it takes, a little give from the price deciding powers to make us happier and less frugal consumers. Like I said that model isn’t broken at all, it’s just not ready for our pockets yet.

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