Digital Only Distribution

[gahnzz]

Today comes the announcement for GTA V... and with it the rumour that it might be digital only in an attempt to combat second-hand and used game sales.

 

This move, if true, on a title like GTA is not just a warning shot - it's a blow to the whole concept of video games being sold in brick & mortar stores. It's a bold move, regardless of your stance, and could be really polarizing - particularly for those who live in areas where high-speed connections are hard to achieve.

 

Now, I don't have internet at home. It's a personal choice. I live in Seattle, so high-speed is completely an option, but I've made the choice to not have internet at my home as I find it's very difficult to not work at home as I work in marketing and promotion. When I need to download something, I do it at work and just take it home on a flash drive. If I need it on one of my consoles, I bring them in on a weekend to grab stuff in my Xbox or PS3 queues. But that's not an option for many out there...

 

The question: How would this affect your gaming if the industry were to move to download only with no physical media?

[marharth]

I have a pretty fast connection so it wouldn't matter to me. I can download a gig in a few minutes.

 

Hopefully the communications companies will starting charging reasonable prices for fast connections like in other countries. That's what it really comes down to.

[ginnyfizz]

I'm with marharth on this one, in the UK we are robbed blind for fast connection. I have fast broadband, but it is not a reality for others, rural areas especially.

[Ghogiel]

I personally don't like it. I am against removing the ability for second hand sales. It has helped fund my gaming since the 80's. I could care less what some execs think about it, fact is, that money helps fund my future game purchases, if only by proxy.

[Nintii]

I have DELIBERATELY avoided ALL games that require a "PERMANENT INTERNET CONNECTION" ... this will just widen the circle a bit more ... I don't care how good the game is. Edited November 2, 2011 by Nintii

[gahnzz]

I have DELIBERATELY avoided ALL games that require a "PERMANENT INTERNET CONNECTION" ... this will just widen the circle a bit more ... I don't care how good the game is.

 

I actually think this is a different issue. I agree on persistent internet connection is nonsense - but digital only distribution is more to compete with used sales. The whole Cerebus Store on Mass Effect and Catwoman Bundle on Arkham City were moves to try and limit the used market. I don't know how successful they were - but this is a blow aimed directly at the brick & mortar distribution.

 

The main reason I think Rockstar is possibly looking at it is simply one of money. Instead of having to pay for a retail distribution network to ship and sell the game for them, this way they can distribute it to a very small number of vendors (Microsoft, Sony, Steam, maybe a few others) and that's it. Bigger piece of the pie for the creators of the content. Same thing that is killing the recording industry... instead of going to the big record companies for the music you want - you have the option of getting it directly from the artist - who sees a much higher share of profit which enables them to make more content down the road.

 

Makes sense to me.

[hoofhearted4]

not that i plan on getting GTA5 anyways, but i do think its stupid how we are moving away from disks.

 

i like having my disks. that doesnt mean i wont by a game online, i buy games off of Steam, but i do like to get my games in disk form.

 

the thing is, is if GTA 5 or any other game is sold only as a download, its still gunna be $50-$60 or whatever. being a download, shouldnt that make the game cheaper? it should. but will that happen? probably not....i would consider downloadable only games being a good thing if it meant a drop in price, but it wont, so until then, its an idea i disagree with.

[marharth]

hoofhearted is right.

 

Game devs end up cutting the price a lot of digital distribution, the game price should decrease but it never does.

[gahnzz]

not that i plan on getting GTA5 anyways, but i do think its stupid how we are moving away from disks.

 

i like having my disks. that doesnt mean i wont by a game online, i buy games off of Steam, but i do like to get my games in disk form.

 

the thing is, is if GTA 5 or any other game is sold only as a download, its still gunna be $50-$60 or whatever. being a download, shouldnt that make the game cheaper? it should. but will that happen? probably not....i would consider downloadable only games being a good thing if it meant a drop in price, but it wont, so until then, its an idea i disagree with.

 

I agree - it should cause a price drop but probably won't. The whole reason why we have the higher price tag was directly influenced by the number of competitors entering the market in the mid-late 90's. Once games started getting accepted by popular culture, more sellers got interested in making a buck - which means a rampant growth in distribution partners who want a piece of the ever-growing pie. Things have pretty much hit a plateau at the $60 range. If a developer truly wants to go digital only and make a real blow at the brick & mortar stores, they'll offer the game at a reduced rate since their getting a larger piece of the pie.

 

I read that Beth makes about $10-$20 per sale on a given game. That's fully $40 that goes to manufacture, duplication and distribution. They could turn around and sell a game at $45... keep $25-$30 of it and still double their money. And virtually all the money goes to supporting the creators of the content.

[Ghogiel]

not that i plan on getting GTA5 anyways, but i do think its stupid how we are moving away from disks.

 

i like having my disks. that doesnt mean i wont by a game online, i buy games off of Steam, but i do like to get my games in disk form.

 

the thing is, is if GTA 5 or any other game is sold only as a download, its still gunna be $50-$60 or whatever. being a download, shouldnt that make the game cheaper? it should. but will that happen? probably not....i would consider downloadable only games being a good thing if it meant a drop in price, but it wont, so until then, its an idea i disagree with.

 

I agree - it should cause a price drop but probably won't. The whole reason why we have the higher price tag was directly influenced by the number of competitors entering the market in the mid-late 90's. Once games started getting accepted by popular culture, more sellers got interested in making a buck - which means a rampant growth in distribution partners who want a piece of the ever-growing pie. Things have pretty much hit a plateau at the $60 range. If a developer truly wants to go digital only and make a real blow at the brick & mortar stores, they'll offer the game at a reduced rate since their getting a larger piece of the pie.

 

Probably the reason why the games haven't actually changed in price so much is that it basically found the market equilibrium, even under changing market climate. The influx of developers and games being released, I would guess this is PS1 era, would account for increased amount of total sales in the market. So having both more people buying games, and more games being made was just keeping up with demand. and I'm sure other various factors played a part in it, like increased development time and costs, since the 80's widening economic division in classes but also cheaper computer goods, things like that. But I think the fact is that the consumer surplus isn't all that high, and hasn't even been that high. So the price has been fairly static.

I read that Beth makes about $10-$20 per sale on a given game. That's fully $40 that goes to manufacture, duplication and distribution. They could turn around and sell a game at $45... keep $25-$30 of it and still double their money. And virtually all the money goes to supporting the creators of the content.

It's advertising, publishers, M$ fees, and retail mark up.

 

not manufacturing and distribution which take the big cut. Actually it would probably cost less than a few bucks per disk to have the disks pressed, manuals, boxes, and be distributed.

Edited November 2, 2011 by Ghogiel