Death of a Salesman

Submitted by Nick on September 26, 2006 – 7:15 pm7 Comments

The Changing Face of Gaming – Part 1

This is the first of three articles in Aeropause’s The Changing Face of Gaming series. Today we look to the future of the games retail market. I talk about who you’ll buy your games from, how you’ll pay for them, and what all this means for game makers, publishers, retailers, and players.

Keep reading for the entire article.

The Current Retail Market

Like most consumer goods, games are mostly sold over the counter at retail outlets. Increasingly, large retailers like EB and Gamestop are focussing on second-hand (or “pre-owned”) game sales. The reason for this is that they make a much larger profit over a second-hand game than a new game. By offering no-questions-asked return policies, they can alleviate consumer concerns about possibly damaged second-hand goods.

This practise hasn’t gone down well with publishers because they make no direct income from second-hand games sales. Last September, Epic Games‘ Mark Rein talked to CVG. Among other things, he talked about the current retail market:

“If you walk into EB in the US, they try and sell you a second hand version of a game before a new one. I think that’s bad. It would be fine if they share that revenue with us. They can also be marketing partners with us as well. We can have an official refurbished games policy. That’s the problem. Those resold games use server resources, tech support. The majority of guys calling up saying “I don’t have my serial number”, I’m sure a lot of those are resold. It costs us money. Those customers think they paid for it, and they’re entitled to support. The reality is, we didn’t get paid. They didn’t pay us.”

Them’s fighting words!

Online Distribution: A Solution for Publishers?

One way in which game developers and publishers can make more money from sales is by cutting out the middle-man. That’s right, the games retailer. We’re already seeing signs that this is in their sights. Xbox Live Marketplace, Nintendo’s virtual console, and whatever-Sony-has-planned-to-copy-these all appear to focus on making “classic” or “casual” games available for download.

Are they just testing the waters for “full” game downloads? Are they waiting for network speed and storage capacity to increase? The PC world seems a bit more advanced in this area. Valve‘s Steam service launched their biggest game ever (Half-life 2) and they continue to add a wide range of games. A possible advantage to working in the PC space is that PC gamers are more likely to have high-speed internet access than other consumers. How else are they going to play Counter Strike:Source or World of Warcraft?

Look at these WIRED Magazine article quotes from Peter Moore (Microsoft) and Phil Harrison (Sony):

“Years from now, the concept of driving to the store to buy a plastic disc with data on it and driving back and popping it in the drive will be ridiculous,

The Todd

Yeah you make a lot of good points but until everyone gets high speed interent I still see consoles having physical drives for at least one more cycle.

http://nick.onetwenty.org Nick

Yeah, I agree. I think that that (manufacturer) hopes for a physical-drive-free Xbox720 or Playstation4 are a little bold.

However, online distribution will play a major role in the upcoming generation and it can only get bigger. Retailers have to start thinking about how they can work with publishers to ensure a smooth transition (which keeps them in the loop).

SP420

Hmm, call me old-fashioned, but there’s just something about owning the CD and box that I enjoy just slightly more than downloading the game to my computer. I think it’ll be quite awhile until full game downloading will catch on, especially to the mainstream public, who could possibly meet it with reluctance, or just ignore it altogether. Just look at all the music downloading stores. Their sales have been far from impressive, and don’t seem to be picking up anytime soon; the gaming audience can’t be much more varied than them. As mentioned in the article, retail stores play a big part in getting new gamers to fill the publisher’s pockets; their roles won’t soon be filled by some online service.

Peter Herrin

SP420, it’s good to read someone else thinking the same thing. I’ve read and listened to game industry types who love to talk about how it’ll all be downloads to a hard drive eventually. They don’t seem to understand the idea that people prefer to own something tangible. With online music, we are “licensing” the right to listen to it, even though you paid for the song. People don’t like that. I like my snazzy metal Halo 2 boxes and my Oblivion special edition packaged with maps and coins. I don’t like downloadable content, because it lets the developer say “Oh, well that can just be an add-on later” when it should be part of the full game. Things will change, but not as much as some would like.

Shane Peery

“I’m sure a lot of those are resold. It costs us money. Those customers think they paid for it, and they’re entitled to support. The reality is, we didn’t get paid. They didn’t pay us.”

This is completely ridiculous. Why is it that the product, which is bought and paid for by the retailer, then again by customer should not be supportable? Who cares who owns it in the end. The product was shipped and sold so why shouldn’t they support it? If the auto manufacturers worked this way, cars would have as short a shelf life as the crap that game manufacturers are spewing any more.

http://nick.onetwenty.org Nick

Shane:

I *think* this quote was in reference to returned copies of games that you have to register. So someone buys a game, copies it and registers online, then returns it (within 7 days) for a refund. Then the publisher gets calls from the next owner asking why they can’t register the game.

Not sure if that changes how you feel at all. I was pretty pissed when my copy of Phantasy Star Online (for Dreamcast) was already registered; I had to get EB to give me a game that was “really new” (not returned by anyone else). Personally that’s my biggest gripe with 7-day return policies; you never know if the game you are paying full price for is *really* new (or second-hand).

tippy

when will ps4 and Xbox 720 come out