Topic: NWR Round-Table 1: The Future of Gaming Retail

[NWR_Lindy]

This thread is for the discussion of our NWR Round-Table 1: The Future of Gaming Retail article.

Read more here...

[Jonnyboy117]

That's a big-ass wall of text. Maybe we can include our Miis or something? Random pics of puppies?

[NWR_Lindy]

My thoughts exactly.  I wanted us to get this one up quickly, however, so we eschewed any fancification.  I wanted to see how people liked the concept.

[Crimm]

The next one is substantially shorter, so I probably should have led with it.

It's a work in progress, so feedback is always appreciated.

[broodwars]

It'd be great to have these roundtables in audio format, similar to the discussions on Radio Free Nintendo.  Or better yet, they could be a segment on Radio Free Nintendo...*hint* *hint*.

But if that can't be managed, yeah something visual like Miis for the various panelists and maybe screenshots of any games that are part of the discussion would do wonders to improve the presentation.

[that Baby guy]

I think in several years, we'll potentially see game consoles engineered to specific specifications, like television broadcast signals.  From there, console-makers will create their systems with unique feature-sets, like the ability to pause at any time, specific types of memory, saving replies/video of any point in the game, and the like.

Companies can also create other hardware, different variations of controllers, and such, but the base hardware that plays the games will probably become an industry standard, like DVD, USB 2.0, and the like, approved by video game boards composed of various publishers.

In this sense, Nintendo may be ahead of the game, considering the Motion+ and Wii Balance Board as "base" hardware, itself.

So, if you want to get into games retail, you'll likely buy a license to play the game, like on the PC, either in a store or online.  The purchase of the license will allow you to play any iteration of the game you can possess, but only on a console that has the license.  Virtually the same as how it works on the PC.

I'd predict not next generation that someone will begin to dabble it, and license out their platform to different manufacturers, rather than manufacture it themselves, once they figure out that the hardware can cost too much to make in a way the consumer would like it.

[Stogi]

Digital distribution is too risky a venture.

I suggest to cut cost, do what the book industry has done and allow people to go to a kiosk, pick the game the want, then have it written and packaged right there on the spot.

[BlackNMild2k1]

Digital distribution is too risky a venture.

I suggest to cut cost, do what the book industry has done and allow people to go to a kiosk, pick the game the want, then have it written and packaged right there on the spot.

This would be a great idea, especially for more niche games that are hard to find, but you would need a much faster way to write data on disc than what we are currently using. Right now, you would have to order your game about 1hour to 1day ahead of time just to make sure it's ready for you to pick up, like the old photo mats.

So unless we move to holographic storage, every system better have a SDcard delivery system. BYOSDCard kiosk.

[Stele]

Steam is great.  I love it.  I generally shop the weekend sales there, which are often 50% off a game that has been out 1-3 months, which is a fantastic deal for anyone with a little patience.

Of course I do the same thing with most of my Wii/DS titles.  I wait 1-3 months and games will pop up in the Amazon gold box or just in the video game deals section for $20-30 instead of $40-50 for Wii or $15-20 for DS instead of $30-35.

The most frustrating thing about Steam has already been mentioned in the article.  There's no discount.  A few titles you get for $45 instead of $50 if you pre-order.  But from release day until the sale a few months later, the game will be the same $50 that it is in store.  And it makes no sense at all.  The publisher is saving gobs of money by not paying for discs, boxes, and most of all shipping to retailers.  Dollars per pound shipping vs pennies per gb digital distribution... it doesn't compare at all.  For all intents and purposes digital distribution is free to the publisher.  They're already paying for some type of broadband internet as part of their day-to-day business, and consumers are already paying for it in their homes.

Competition is coming though.  Impulse has weekend sales as well, although their library isn't as big.  Direct 2 Drive is having an amazing $5 game sale the last few weeks with various titles each week.  And Amazon released Tales of Monkey Island ep1 for free on Talk Like a Pirate Day... but for anyone who "purchased" ep1, you get $2 off the future episodes, so it's actually cheaper than the 5-part bundle on Steam.

Now yes it's going to be some time before consoles get to where PCs are, or farther.  And used game sales is the big thing that's holding that up probably.  When's the last time you saw more than 1 rack or 1 wall-section at Gamestop devoted to PC games?  There's always just the one little area, and there's never more than 1-2 copies of the new releases. They really only stock PC games if customers pre-order.  It's a little better at Best Buy, Target, Walmart, etc... you get a full aisle of PC games, vs  a full aisle for each of the separate consoles.

But honestly I can't tell you the last time I bought a PC game at brick and mortar.  Gamestop never has the pre-order swag for PC games like they do for consoles.  And there's always a pre-order discount on Amazon, as long as you don't have to have it on release day. 

But console games... I still reserved Smash, Mario Kart, Prime Trilogy, and even Tiger Woods to pick up in store.  There was some swag and midnight releases involved with most of those.

Ah well.  I guess my TL/DR is PC games will get there first, and consoles will follow the generation after that, whenever it is.

[Killer_Man_Jaro]

Interesting feature indeed. I'm curious as to how this discussion took place. Was it a case of typing down new thoughts whenever they popped up and forwarding an email to everybody?

I think the downloadable games scene is quite a way off from reaching acceptance from the general consumer bases of each console. We must remember that many people still don't have a working internet connection, many more have a primitive connection that would not suffice for this level of downloading and most importantly, a very large proportion of the market is completely unaware that their are download services for videogames right now. As it stands right now, there aren't nearly enough people adequately prepared for a change in distribution as drastic as this one. The stable connection issue is a major problem for many, especially with a lot of broadband providers now imposing restrictive limits on their customers' use.

A very good point that Nick made which wasn't elaborated on too much is the used games market. With the loss of physical retail, that disappears entirely. I don't sense any appetite from companies to allow you to receive your money (or a portion thereof) back after deleting the download that you no longer want. As for buying used downloads... well, that doesn't even make sense, does it?
Another thing that occurred to me is that the download scene also takes away the borrowing and trading element with friends. Loads of people still like to borrow discs from their friends to play for a while before returning them and I cannot see that working well with an all-download distribution system.

Basically, a future of downloadable gaming is certainly coming, but I'd agree with Andy on a time frame of 10-15 years before such a movement could fully set in. Currently, none of the download services, PSN, XBLA or WiiWare, have an infrastructure that is ready for this and there needs to be a lot of modification & development on policies, agreements on profit stakes, data compression techniques, etcetera, before any of the three top dogs could begin to support this sort of future.

[ShyGuy]

Mmmm Chick-Fil-A. I've only had it once a few years ago, but it still haunts my dreams.

Keep in mind Digital Distribution isn't cost free. Bandwidth costs money and all indicators point to more and more congestion online in the coming years.

[disake]

I was just about to bring up that point that shyguy made. Digital distribution does not have a zero cost to it. There is also a bandwidth cost that data centers would have to payout to transfer it from the company to your console, energy cost to maintain those servers 24/7, in addition to what I will call digital inventory costs" to allude to what Jon said about physical games having to be sold to clear up space. While I agree that technology is always improving from data storage to trafficking software for the world wide web and beyond. Data is still tied to real world constraints of storage. And storage is not infinite. One harddrive takes up a finite space in a data center that must be linked to other data centers to insure that the data is not simply lost to the void if disaster happens.

There is no free lunch.

[NWR_DrewMG]

Interesting feature indeed. I'm curious as to how this discussion took place. Was it a case of typing down new thoughts whenever they popped up and forwarding an email to everybody?

It was simply an email discussion.  Each note in the feature is an email that was sent out to the group.  It's been edited a bit to make it more coherent, but that's the gist of it.

I enjoyed contributing to this feature, looking forward to future editions.

[KDR_11k]

Resale is not the only freedom of use you lose when going digital, DRM was designed initially to allow remote access denial and the Kindle that was brought up is a great example: When the publisher of the book 1984 backpedalled on the agreement (or something) Amazon remotely deleted all copies of the books on all Kindles out there (they refunded the money of course). This killswitch is the greatest fear of people who know what DRM really means. Also see Wal Mart, they had a DRMed download service that wasn't profitable so it got shut down, including the authentication servers so all downloads became unusable (I think they released a decrypter after massive backlash or something).

AFAIK retailers won't stock a (major) game if it's sold digitally for cheaper or ahead of the launch date, hence all big new games on e.g. Steam arrive only at their store release date and cost as much as they do in stores.

I don't think the XBLA specials are big deals, nothing compared to Amazon's deals of the week. Steam is pretty good with deals but that's because Steam competes with many other services and regular retail and the deals are likely to bait more people into using the service. Console-bound services will not have local competition because the console maker will not allow it. And licenses that allow you to put it on any system? Dream on. Some companies even require separate Windows and Linux licenses for the same software.

Anyway, we'll probably see some major changes after the collapse of the core game industry. Nintendo isn't big on going download-only, Miyamoto is one of the "I want something physical" people and Iwata believes most people are like that.

The downloading worked well with music as it offered something new stores couldn't, the unbundling of songs from albums. I don't see digital game distribution being able to offer anything stores just plain cannot.

[BwrJim!]

To Zachary Miller:

  I've both worked and run a couple game stores and worked in the coperate environment for selling Video Games and the margin isnt what you think..  Most of the time, a retailer is lucky to get 4-5 us dollars per game while the usual is just 1.80 or so.   When a game has been out for awhile and stores begin to slash the game price, they are usually taking a rather large hit to clear those titles out.  Sometimes companies will offer a rebate of sorts for the retailers, but this rarely happens and its not very well practiced at all.   When the game on the shelf comes into competition with its own players choice title that may get released, the wholesale cost of the orignal doesnt change to the new SKU.  So its really a no win situation from that angel for the retailers.


Edit :: At this point in my gaming career I welcome and embrace the digital format.  No body actually owns they game they buy in the stores and with the damage they can take along with the space needed to hold on to them has grown beyond my means.  With the digital distribution, things can stay nice and neat.  While Brick and Mortar will be around for a while, I can see them changing drasticaly in the next few years.  I was talking to Seth from Capcom about 2 years ago and he believes DD will be in full swing by 2012.   I always took his comment as something kind of pointing at the next generation of consoles.

  I may miss the breaking of the cellophane and checking out what I just got, but in the end.. it doesnt even matter....   So, through out my gaming career, I have gone from hoarder to clean and neat (and it only took 28 years!)

Thanks for your time,
J!m

[vudu]

I concede that the used game market is a definite sacrifice to the move to digital distribution, but I take issue with people claiming that they lose their freedom of use with a digital game. The fact is that you have no freedom of use with a traditional retail game (short of the already mentioned used game market).

How about losing all your games if something happens to your system?  Nintendo recently revealed that you can't transfer your DSi purchases to a new system if you buy a new DSi.  While I have no doubt that they'll make exceptions on a case-by-case basis if your system gets destroyed, it's ridiculous that you have to jump through hoops because you gave Nintendo more money.  What if my DSi gets a little scratched up--or I just want a new color--so I give my old system to my little cousin?  Why do I have to give him a $100 worth of DSi games, too?  Why do I need to physically break my system beyond repair in order to convince Nintendo to let me keep the games I already paid for?  And what happens if my system gets stolen?  Am I just completely screwed?

However it took a long time after MP3s became available for them to replace CDs, and they still haven't entirely yet. CDs still take up shelf space in every Best Buy, Target, Wal Mart, and FYE on the planet. Apple popularized another option, but it hasn't eliminated the first option yet, and I don't think it will any time soon. I worked in a Sam Goody music store in 2001, and they still carried cassette tapes. This was long after cassette tapes became irrelevant. CDs aren't going anywhere just because there is a more popular option, and games will follow the same pattern IMO.

Keep in mind that with video games there's a natural breaking point in format changes every 5 years or so (i.e. whenever a new system cycle repeats itself).  Unlike with movies or music, content providers aren't going to keep making games for multiple formats.  The latest movies come out on Blu-Ray, DVD and (maybe) VHS.  Nintendo isn't going to release games on multiple formats on a regular basis (Twilight Princess was a fluke).

While there's a strong argument for releasing games on multiple formats (Microsoft's games on demand is a good example) there's an equally strong argument for changing formats when a new console cycle starts (like has happened every single generation to date).  A brave (foolish?) console manufacturer might just decide to make a clean break and go entirely digital sooner than you expect.

[Pale]

Edit: The following post was made before reading Vudu's above me.

Is anyone else stoked about the PlayStation Store update tomorrow?  Tons of PSP retail titles are gonna be available for download!  No more UMDs!

But yeah, I'm of the same opinion as Jim.  I'm really hoping that MS stop being hard drive nazis and let me get that 250 gig drive coming in the modern warfare bundle for an affordable price.  Then I can start taking advantage of their games on demand service!

[vudu]

HE LIVES!  Where the hell have you been for the past two weeks?

[Pale]

I concede that the used game market is a definite sacrifice to the move to digital distribution, but I take issue with people claiming that they lose their freedom of use with a digital game. The fact is that you have no freedom of use with a traditional retail game (short of the already mentioned used game market).

How about losing all your games if something happens to your system?  Nintendo recently revealed that you can't transfer your DSi purchases to a new system if you buy a new DSi.  While I have no doubt that they'll make exceptions on a case-by-case basis if your system gets destroyed, it's ridiculous that you have to jump through hoops because you gave Nintendo more money.  What if my DSi gets a little scratched up--or I just want a new color--so I give my old system to my little cousin?  Why do I have to give him a $100 worth of DSi games, too?  Why do I need to physically break my system beyond repair in order to convince Nintendo to let me keep the games I already paid for?  And what happens if my system gets stolen?  Am I just completely screwed?

Again, don't damn the concept of digital distribution just because one company currently involved is being asinine with their policies.

At the risk of coming off anti-nintendo and thus pissing off everyone on the boards, Nintendo is the only one taking part in this absolutely ridiculous practice.

If you get a new PS3, you simply put in your PSN credentials and re-download your games.  If you do this more than five times you simply call customer service and have them deactivate one of your past registrations.

If your 360 hard drive crashes, you still have your Live account that allows you to redownload all your games without ever talking to customer service.

The problem here isn't with digital distribution.  It's with Nintendo being cheap and frustrating.

[Pale]

HE LIVES!  Where the hell have you been for the past two weeks?

Was, and still am, dealing with a metric ton at work while trying to close on a house that currently contains a tenant that needs to be evicted.

[ShyGuy]

Again, don't damn the concept of digital distribution just because one company currently involved is being asinine with their policies.

At the risk of coming off anti-nintendo and thus pissing off everyone on the boards, Nintendo is the only one taking part in this absolutely ridiculous practice.

If you get a new PS3, you simply put in your PSN credentials and re-download your games.  If you do this more than five times you simply call customer service and have them deactivate one of your past registrations.

If your 360 hard drive crashes, you still have your Live account that allows you to redownload all your games without ever talking to customer service.

The problem here isn't with digital distribution.  It's with Nintendo being cheap and frustrating.

Also, like Jonny said, big walls of text are ugly. Pictures, even trivial ones, are a necessary part of human attention on the web.

[Stogi]

Digital distribution is too risky a venture.

I suggest to cut cost, do what the book industry has done and allow people to go to a kiosk, pick the game the want, then have it written and packaged right there on the spot.

Right now, you would have to order your game about 1hour to 1day ahead of time just to make sure it's ready for you to pick up, like the old photo mats.

How do you know this? Where is this technology present?

[Pale]

I'm confused? How does me contentedly having a Wii Remote in my head make me anti-Nintendo? =P

[ShyGuy]

Portrayal of the Empire in a negative light.

[vudu]

I'm confused? How does me contentedly having a Wii Remote in my head make me anti-Nintendo? =P

This kind of stuff wouldn't happen if you tightened your wrist strap and used the jacket.