The Future is Still Retail

[RushofBlood52]

1) I feel this point is completely subjective. I am just as content scrolling down my Steam list enjoying my collection as I am looking at my shelf for my console game collections.

2) Flash drives? External hard drives? On Steam, I can simply sign myself into any other computer. Use this idea for a console and it is the same deal.

3) I feel like this is an awfully controlled case. You are being pretty nitpicky, I think. How many kids' sole source for entertainment is digital? Younger kids will always have action figures and the like. At my age, I would love for someone to give me clothes, furniture, accessories, etc. as opposed to simply games or music. And don't forget what is needed to listen to the music, play video games, read books, or watch movies. Gifts can still be consoles, controllers, headphones, iPods, Kindles, etc.

4) I think this part really hurts your point more than supports it. Impulse buys are more common digitally. Think of how constantly Steam has sales. Or how relatively cheap Steam games are to retail games. And look at the iPhone. Would it even have half as many app sales as it does if everyone had to go to the store and buy each app?

5) These numbers will get smaller. And this is where I can bring up what I feel is an over-arching point: new generations will do things differently. For example, my kids will be born into a world where Nooks/Kindles, iPhones, Netflix streaming/On Demand, and PSN/XBLA/Steam/WiiWare, etc. is not only common, but the norm. They will be born into a whole different world. And not only with digital distribution, but with technology in general. Technology is getting way more sophisticated constantly. Finding a 2TB hard drive nowadays is as easy as walking into a Best Buy. A couple years ago, that was unheard of. Think of how this will be in a couple years from now. 512TB?

 

[darth gditch]

This isn't even accounting for internet speeds of connected consoles, as you touched on, in the quote below. Connected could be anything.

Some of those folks simply cannot reach broadband access from where their console is sitting.

When I first got on Xbox Live, the first thing I did was download Shivering Isles. That's the sole reason I got online in the first place, really.

Do you know how long it took to download with my internet at the time?

18 fucking hours. For 1 GB.

That was with DSL. Hard-wired.

I made the Xbox Live version of DOOM lag, with just 2 players.

Indeed.

I love Steam, but when I buy things, it's when I'm about to go to bed because that shiny new copy of Civ V is going to take 18.9 hours to download.

Whereas my 22X DvDROM drive can install the disc version in about 3 minutes.

 

[Dogstar060763]

I enjoy your articles, Shamus, but I think you're wrong on this. I come from that very mindset you're arguing in favour of - the collector, the old retail model, etc. I used to have crates (quite literally) of game disks. I dunno how all that changed for me, but I think XBL had something to do with it - that, and the steady building of a better broadband (here in the UK, at least).

Those first few tentative downloads via XBL were a slow revelation... suddenly, the idea of 'owning' something that could always be recalled from 'the cloud' became an attractive concept; I looked at my room cluttered up with endless game disks and figured 'this could all be virtual' and I'd even get some living space back into the bargain.

Since then I've not only cleared out all my old games, but enjoyed the simplicity, convenience and cost-benefit of downloading entire games - on 360 and on PC (especially PC). I find the very idea of owning another game disk anathema. I like the idea that once purchased digitally, the game is always available for me out there in interwebland should I need it again, but, better - it's always the latest, most-up-to-date version (Steam is great!) - yes, the game will always remind me when it's keen to update itself. I like that.

Online will be the future of video game purchasing, like it or not - and it's practically here, now. Maybe not for those with mindsets still locked into quaint notions of 'owning' a physical disk and case, but for the vast majority of younger people now and in the future it will be the new normal.

 

[Demon_Cow]

Well said on point number four. There are large portions of U.S. where there simply is no real broadband option. Hell, the only time I get to use broadband is when I visit my parents every weekend, who live in another county.

 

[carpathic]

I the end, this move is all about transferring costs from the developer to the consumer. We pay for bandwidth, not them.

I will continue to buy physical versions of games.

 

[Jacob.pederson]

Consumers won't abandon retail because it's the most rational choice. PRODUCERS will abandon retail because it's the most ECONOMICAL choice.

It won't matter what Producers want if Consumers aren't interested in following them. As long as there are enough consumers who want to continue to purchase through retail, then producers will continue to make their products available through retail, simply because it'll be more economical not to cut themselves off from those customers.

Here's how you take your digital copies to your friends house.

step 0: go to friends house
step 1: type in steam account
step 2: type in steam password

I dunno about you guys and gals but my friends and I do this all the time at LANS (who doesn't have an extra computer around for guests nowadays?). Ditto for Starcraft 2.

And for those who don't use steam/the download purchase system of their friends choice?

Oh, and I'm sure there are large numbers of people who don't keep an extra computer around for guests. I know I sure don't. Why would I spend that kind of money on a computer that's just sitting around in case a friend needs to use it?

Also, it really isn't that difficult to pack up your 360 and take it to a friends house either (a little more complicated than typing a password in, but not much). I have a station set up in my living room that has all the cabling run, my friend just needs to pop in a 360 and go. Xbox live is absolutely genius at tunneling multiple 360's through upnp NAT's btw.

Or, with a physical copy, if both you and your friend own an Xbox, you can just take your copy of the game and a memory storage unit (memory stick or memory card or what have you) over to their place and plug them into your friends system. Much easier, if you ask me.

My extra PC isn't just sitting, it is a Minecraft server Also, it didn't really cost me any money that I wouldn't have spent anyways, because it's made up of parts cycled out (due to upgrades) of our other 5 machines. I do realize this isn't exactly the normal set-up, but there are an increasing number of 2-pc households out there, and that's really all you need to play your steam games with a friend.

We also have 3 steam accounts between the wife, kid and I, so if a friend doesn't have a particular game, they can borrow one of those for a bit

 

[Aphroditty]

In short, developers will do what's better for them. They will do like pirates do today (except it will be a legal market) because it's cheaper. Consumerism, as much as the name seems to say otherwise, is not driven by the consumer's need and preference, but by the producer's ones.

Yeah, that last part is actually completely wrong. If producers only offered digital product, and their consumption base refused to buy digital product, guess what would happen to those producers?

They would make little money, and as soon as one producer switched to physical product they'd be selling gangbusters. The reason physical product (although not necessarily retail, I agree with you there) will exist in the future alongside digital distribution is because consumers are willing to pay for it and firms are unwilling to lose those sales. The decision point on whether we finally transition to a video-game market based almost entirely on that lies with consumers--if consumers reject digital distribution, then that's it. Producers can try to push it and advertise it, but ultimate adoption remains out of their power to decide.

If our economy really was powered by supply, as you're suggesting, rather than demand, it would look a lot different.

 

[QuantumWalker]

It's possible to still easily play Origin System games, though: abandonware sites. The legality is questionable, of course, but if we're talking about Things That Can Be Done, playing System Shock and Ultima fall into that category.

So let's say it's 50 years in the future, and you're trying to play Half-Life 3, which was only distributed digitally, but you can't because Valve doesn't exist anymore. Well, the good news is that back in 2015 (and because I'm saying that it means we won't see Half-Life 3 until at least 2030, sorry guys), some dirty, cheapskate, parasitic pirate decided to crack the game and put it on the Internet. Therefore, someone will still have it, and it will be entirely playable.

I'm not here to make any judgement on the ethics of this reality, I'm just saying that this is the reality. In the grand scheme of things, a dead company will not mean a dead game.

But it is important to realize that games from that era only exist today because they had a physical copy to be made from; this is taking into account that the internet did not exist in the state that it is today meaning that storing those games was only practical on a physical copy or stored on a then massive mainframe.

Perhaps I'm misreading this, but it seems like we agree, and you got your quoting messed up somehow.

No, no no no, I agree with you I was just citing your previous statement to save me some time in rewriting a similar argument.

 

[(LK)]

This isn't even accounting for internet speeds of connected consoles, as you touched on, in the quote below. Connected could be anything.

Some of those folks simply cannot reach broadband access from where their console is sitting.

When I first got on Xbox Live, the first thing I did was download Shivering Isles. That's the sole reason I got online in the first place, really.

Do you know how long it took to download with my internet at the time?

18 fucking hours.

Hehe, I remember when I bought Mass Effect off of Steam.

Took me 2 months of on/off downloading for it to finally finish. If I let it download and not stop it(and if my internet stayed on throughout) then it would have taken 2 straight weeks of downloading.

Thats another thing with Digital Distribution. I'm curious to see how many people are willing to sit and wait for 10+ gigabytes of data to download. I don't care how fast your internet is, downloading that much data takes a long-ass time. It'd be faster to just go to the store and buy it.

In my area you can buy internet for a reasonable price that would download that in half an hour. Unfortunately, in so doing you used up 1/4 of the bandwidth you're allowed to use for the entire month, according to a limit that is deliberately buried in your contract and not disclosed to you openly until you're told you're having your internet shut off until next month.

Here, the options are either DSL and cable. You get to choose between paying $30 a month for DSL that will never reach 1/4 of the advertised speed on its' best day, or cable that is so fast that you're able to use all the bandwidth you're allowed to use for a month in 2 days.

 

[Booze Zombie]

I agree with you whole-heartedly and on a related note; I believe that Carmack is not only a genius, but also "a tiny bit" naive and optimistic.

 

[Quizza]

In short, developers will do what's better for them. They will do like pirates do today (except it will be a legal market) because it's cheaper. Consumerism, as much as the name seems to say otherwise, is not driven by the consumer's need and preference, but by the producer's ones.

Yeah, that last part is actually completely wrong. If producers only offered digital product, and their consumption base refused to buy digital product, guess what would happen to those producers?

They would make little money, and as soon as one producer switched to physical product they'd be selling gangbusters. The reason physical product (although not necessarily retail, I agree with you there) will exist in the future alongside digital distribution is because consumers are willing to pay for it and firms are unwilling to lose those sales. The decision point on whether we finally transition to a video-game market based almost entirely on that lies with consumers--if consumers reject digital distribution, then that's it. Producers can try to push it and advertise it, but ultimate adoption remains out of their power to decide.

If our economy really was powered by supply, as you're suggesting, rather than demand, it would look a lot different.

Look, we could argue forever to decide if consumerism is the complete freedom of economical choice (U.S.A.! U.S.A.!) or a brilliant facade designed to let you buy whatever they want you to buy (I'm a communist, after all), or something in between, but I think that would be way off topic.

I'm just saying that, in my opinion, producers have the right to choose what to produce and the power of making us accept it and buy it, whatever it is, through advertising and market saturation. And they will be very happy if they manage to make us switch to digital. This is already happening and not only in the gaming industry, but it will take time. I was arguing Shamus points about the FUTURE of gaming, and I firmly believe that the gaming industry won't need retail.

Just a couple of things:

- Somebody is comparing games with hardcover books, saying that since the latter are not disappearing, the same will be true for physical copies. Sorry, but this is mixing apples with oranges: first of all, books have alway been physical objects, indissolubly mixing content and support. The same is not true for games, which need a support to run the content. Cutting the physical copy, which is just a bridge between the content and the support, is not cutting much. Also, remember that the entire book market is in crisis: people read less and buy less books, and in times of crisis producers stick to what is old and familiar to avoid alienating the few consumers they have. And YET, the e-book market is rising every year. As much as I prefer books, I believe they will be less common in the future.

- People arguing that their connection is too slow to download games and forget physical copies: remember when dowloading a single song took, like, 3 hours? That was 5 YEARS ago. We are talking about the future here. Who knows what internet connection will be capable of in the next five years?

 

[PlasticTree]

If only we were able to get a response from Carmack and the gang..

 

[Chimpster]

Long time lurker, first time poster.

I recently had this debate with a friend. I personally believe that digital downloads will completely replace retail sales eventually. I'll preface this by saying I'm a huge Steam fanboy and have 200+ games currently on my account.

I do think it'll take a lot longer on consoles than it will on the PC but eventually, it won't be profitable for people to release a boxed product.

Look at the music industry. How long do we genuinely believe that people are going to buy CD's en masse? Yes, people will still buy them - people still buy vinals, but that doesn't change the fact that eventually, CD purchases will be seen as just as backward as buying a record.

Games are next up. How much space do you generally get in a games store for PC games nowdays? 1 Shelving unit at a push I'm guessing. That's because PC gamers don't buy retail any more, it's usually nothing more than a waste of time and money You can get PC games cheaper and with less hassle digitally, in almost every normal instance.

At the moment, not everyone has a decent internet connection, or doesn't have their console hooked up to it etc but eventually - everyone will. Then, retail will die a very quick death because there won't be any money in it, I mean - look at Virgin, zavvi & Fopp (UK). They all went bust because no-one was buying CD's any more. Even HMV nearly folded.

As soon as consoles click onto the fact that people will be just as frivolous with their money online as they will be in a shop, then it will only be a matter of time. I for am very interested to see what features Steam will have on the PS3! That could be a real game changer!

I do normally agree with you Shamus, but I think you're dead wrong this week and would argue that every one of your bullet points can be overcome eventually. I think we can all agree that retail isn't going anywhere in the near future, but the writing is clearly on the wall for retail gaming (hell, even Grannies know what an Itunes gift card is these days )!

 

[Azulito]

Good read!

Despite these facts though, I still feel (And I'm unhappy with the idea) that it'll slowly go digital. Although they miss out sales from the above stated, it cuts costs in packaging, printing, logistics, taxes and so on, they'll also gain more sales from those lost in second hand games.

I also feel that digital distriibution is better for impulse buying than physical retail shopping. When you go out into a store, you have a limited amount of money with you and that money is physical and has a value to you. You see the values of other objects and compare them. With online, the value is stripped to just a number on your screen. You see it and many dont see it as being "This money could be used to buy me a few days food". It's made even worse when they have deals such as 66% off. People will naturally buy a game thats 66% even if they had little interest in the game to begin with, digital distibution isn't limited by stock so this can be a huge advantage for them.

I'll always prefer a physical copy, there is something nice about being able to read the manual, seeing the box art and 'showing it off'. Plus I'm always frightened of the concept that my steam account could be banned or my internet down so I'm without games. ¬_¬;

 

[Sutter Cane]

Digitial distribution = End of game libraries

I'm not even that old, but I'm old enough to appreciate my atari and NES and Genesis games, even my classic PC games. If everything is digital or requires server activation/connection, then that's the end of re-playing your favorite games down the line. Enjoy trying to play your Assassin's Creed game in 10-20 years when the company takes those servers down, or has been purchased by another company, or has gone bankrupt

I know, right? I mean, I love going back and playing the atari and pc games from when I was a kid. Wait, that isn't true at all, because I haven't managed to keep track of them this entire time. In fact, the latest trips down memory lane have all been via Good old Games or Steam. Did you know you can get EVERY COMMANDER KEEN GAME EVER for 5 dollars? All them, 5 bucks. Downloads in like 20 seconds. Or do you remember where you keep the 19 floppy drives that contain that data? Gosh, I hope they aren't scratched.

If Steam and Id can connive to bring back such an 'ancient' as that without any previous infrastructure, you don't think they'll have a way to keep it alive down the road?

wow, just wow. part of your argument seems to be, "Well I didn't keep track of the games from when I was a kid, so therefore the ability to keep playing older games doesn't really matter." I also don't understand why you think its a good bet to assume that a company that exists now will always continue to exist. I don't want to have to rely on some other company to provide me with a product that I already bought, and that I may still have kept track of,but cannot use due to no fault of my own. maybe i'm weird in that i like to take something i've bought look at it and say, "I payed money for this, I own it, it is MINE."it also doesn't help that my xbox isn't hooked up to the internet, as it seems I would have to buy an adapter to use wireless.

 

[TiefBlau]

I disagree.

1. There will always be collectors in much the same way that there will always be people who want to listen to music on records or get their news from a paper. It's just a fact of life.
2. I think the industry would be all too happy to destroy your ability to share games with your friends. That's more potential customers for them.
3a. You can't destroy the stimuli of gift-giving just because your gift is physically smaller, or not even physical, for that matter. Traditions change.
3b. Anyone who goes on Steam can assure others with great confidence that impulse buying is alive and well in the digital realm.
4. This is the only point I see in retail. People may be getting stronger connections day by day, but long download times are going to plague the digital distribution industry for a while. Like I said, I don't think any of your other points play that large a factor, so I'd say connectivity is the only leg retail has to stand on. If they eliminate this, digital distribution really will be our future.

 

[justnotcricket]

I don't think it's just that they think it's better, but it's cheaper. It's just a matter of waiting for society to adjust to it slowly. I don't think it will happen tomorrow but saving money logistically reads a lot clearer on paper than the inconsistent irrationality of shoppers.

But is it always cheaper?

A while ago, I went to get a copy of Dragon Age Origins Awakening for PS3, only to be told that the PS3 version was download-only. This irritated me, because instead of being able to just buy my game and go home and play it, I had to go through the whole download process (using internet that I also pay for, I might add). Anyway, I consoled myself with the thought that the game would be cheaper because it was just the data, not all the box and marketing and whatever. Well it wasn't. It was the same damn price, PLUS the cost of the internet I would have to use to download it. (And before anyone claims I had to pay for fuel to go to the store...I walk there ;-P)

If downloadable games want to be my future, they'd better damn well be cheaper than the tangible versions, that's all I'm saying.

 

[TaboriHK]

I don't think it's just that they think it's better, but it's cheaper. It's just a matter of waiting for society to adjust to it slowly. I don't think it will happen tomorrow but saving money logistically reads a lot clearer on paper than the inconsistent irrationality of shoppers.

But is it always cheaper?

A while ago, I went to get a copy of Dragon Age Origins Awakening for PS3, only to be told that the PS3 version was download-only. This irritated me, because instead of being able to just buy my game and go home and play it, I had to go through the whole download process (using internet that I also pay for, I might add). Anyway, I consoled myself with the thought that the game would be cheaper because it was just the data, not all the box and marketing and whatever. Well it wasn't. It was the same damn price, PLUS the cost of the internet I would have to use to download it. (And before anyone claims I had to pay for fuel to go to the store...I walk there ;-P)

If downloadable games want to be my future, they'd better damn well be cheaper than the tangible versions, that's all I'm saying.

That's not what I mean. I mean it's cheaper for them. It costs less for them to produce and distribute.

 

[Aphroditty]

Look, we could argue forever to decide if consumerism is the complete freedom of economical choice (U.S.A.! U.S.A.!) or a brilliant facade designed to let you buy whatever they want you to buy (I'm a communist, after all), or something in between, but I think that would be way off topic.

Whether you are a communist or am I patriot is irrelevant to the question at hand. Are you trying to prove some other point? Ah, the point is that I am a mouthpiece rather than an agent of rational inquiry, as a communist like you is. I appreciate the sentiment.

You're probably quite right in thinking that the western world is in the grip of a massive conspiracy to get people to buy pornography, marijuana, everything else that has ever been sold, and purchase games off Steam.

I'm just saying that, in my opinion, producers have the right to choose what to produce and the power of making us accept it and buy it, whatever it is, through advertising and market saturation. And they will be very happy if they manage to make us switch to digital. This is already happening and not only in the gaming industry, but it will take time. I was arguing Shamus points about the FUTURE of gaming, and I firmly believe that the gaming industry won't need retail.

Of course producers have the right to choose what to produce; they do not have the power to make anyone buy it. And of course they would be happy; it's more economical for a video-game producing firm to get their sales online. But the point is, there's nothing magical about marketing that can compel people to do its will--in fact, economic theory provides the fairly compelling idea that that marketing is often a zero-sum game (the gains from advertisement are, economy-wide, equivalent to the costs of marketing). Marketing can produce short-term increases in demand, but long-term it has little-to-no effect; which is why marketing is always and forever focused in the short-term--its staying power is very small. In fact, we only perceive marketing as powerful. If you're buying soda, advertising and brand loyalty can convince you to only buy Coke, for example. But, in reality, no demand is being created--you already wanted a soda. If there had been no advertising there wouldn't have been one less sale, what's happening is the demand is being shuffled around rather than increased. Even the creation of soda itself did not suddenly invent a demand for soda--consumer choices did. They tasted soda, liked it, already had a demand for luxury goods (that is the key point), and the supply then moved to match the demand for it. Then marketing came in and started shuffling that demand around.

That is the same property we can apply to video game sales. It's demonstrable that many consumers want to shop online and buy digital product--it's simpler and more efficient for them in many ways (less space taken up, far less physical effort required, far simpler overall). Producers doubtless want to be in digital sales. However, physical sales will never go away because consumer demand for it is not going away any time soon. Your conclusion is as follows: Because firms have the ability to permanently affect markets via marketing and market saturation, they will unilaterally cause a permanent shift away from retail and into digital sales.

Well, in the end I suppose it's implicit in your ideology that firms do have the power to generate demand, so I don't really know how to argue against that idea any further. However, I do understand that if you accept that producers (which necessarily includes all firms, mind you, including family farms and small businesses) have the inherent power to force people to buy, then naturally that's something you'd want a communist for fixing.

In that way, you are attempting to create a demand for your own supply. A brilliant facade. (I jest, even if that were more than a weak jab at best.)

 

[Sud0_x]

I'm not sure how this thing will pan out to be honest, I'll just sit back and watch.
Digital Distribution is not fit to take over the market in its current state.
It clearly doesn't cater to everybody, therefore I don't see it being the last man standing. I'll shift from my normal stance and offer a prediction, though these tend to bite people in the ass, and say that things will largely stay as is with the market divided.


The last few games I bought were in stores, which, here in Australia, are MASSIVELY over priced. Then again, STEAM is priced to match.
I imported a couple games via ye olde eBay:
6 months ago I got Metro 2033 for AU$12
I also got ArmA II on release for AU$15
I waited a couple weeks to get them but it was worth it for the money I saved.

There are still plenty of avenues to go down for games and quite frankly I don't think this discussion is an important one. The only thing that concerns me is one medium holding market monopoly and taking away our options.

EDIT
Oh and thanks Shamus for not being a rambling mess this week

Editx2: And let us not forget the black sheep competing in the race ARRRRRRRRR it be piracy.
The market is a big one and I still think they'll all be taking a slice.