Value Capture
June 1st, 2009Can someone explain to me the value proposition to gamers behind downloadable games from Xbox Live? The only - and I mean only - benefits I can see from this development are for console manufacturers, since most everyone else loses.
- Retailers no longer get to provide distribution or act as a middle man for the publishers, losing revenue and margin.
- Publishers presumably lose margin to the console manufacturers (and may get cut out of the loop entirely, since their distribution and packaging functions disappear).
- Developers find that their choice of console is ever more important to their existence and lose even more negotiating leverage.
- Gamers get to pay essentially the same amount of money for a significantly cheaper product, yet have to compress it onto fixed hard drive space, lose the tangible product of a CD/DVD, and potentially subject themselves to ever more intrusive DRM and support restrictions (and anything else companies seize on to further “monetize” their content).
Perhaps more worrisome, I don’t see this even being reported in the mainstream press… it’s like gamers have decided to collectively plug their ears with their fingers. Hopefully this does not catch on.
Posted in Geoff, Idiocy |
June 2nd, 2009 at 5:40 am
What? Excuse me why are you complaining about publlishers losing revenue? Who cares about publishers but their mums? Encroaching fiends pick and choose which games to actually advertise.
DLC on playstation store has been said to leave games at a level playing field, since gamers get the same exposure in the store to all games released that month. There is also the possibility of having a customised store directing you to games in genres that interest you.
Also, I don’t get how developers “lose negotiating leverage…” this is just an option for them to have their games downloadable. It brings more options to them if anything.
Hard drive space? Something tangible? Your stuck in the past on this subject man: I think we are realising games were never all that tangible anyway, and regarding hard drive space you can delete it but Live still knows your account owns it so you can redownload, or I think you can.
The only real problem is that they won’t let you sell or trade these games and they don’t offer them at a sygnificantly reduced price despite the nonexistant shipping and retail fees.
If the games were put up at like half price, but there were tradeable versions that were full price and you could browse and post them easily on an Ebay like application from the 360 menu, it would be picture perfect.
The almost gamer-hub of retail, where gamers of all kinds bump into each other and mix a little bit, is becoming more obsolete is sad. But there should be an increase in arcades and smaller weekly events in people’s local area some time anyway. You could get together for the experience like you get together for the cinema. Videogames are gonna break the convention of being loner, inactive inside activities you wait and see
June 2nd, 2009 at 6:41 am
The main benefit is the “I don’t have to leave the house to buy a game” factor. I agree, though, in the current setup it’s not good for consumers.
I love Steam, but Steam also lets publishers set their own pricing, and runs ridiculously cheap weekend and package deals. Microsoft’s idea of a weekly deal is, currently, a car pack for Forza 2.
June 2nd, 2009 at 6:32 pm
While I’ve long advertised my worries about downloadable games, in theory I don’t have a problem with them. The main problem now, as it has been for quite some time, is that the publishers typically pass absolutely none of the savings from eliminating distributors and manufacturing (which, lets be honest, is a pretty large part of the cost) on to the consumer. In fact, you can often find the resellable/tradeable/lendable physical product for less than a digital copy, especially in regards to older games/digital content. If publishers want us to save them money they need to pass some of their savings on to us in the process.
It’s possible that the death of physical media could really kill off a big portion of the game industry as well. While the more core gamer may have no issue paying full price for all the games they want, there are a lot of people out there that do rely on older cheap or used games for the bulk of their purchases (not the “CheapAssGamer” type, but rather many parents, etc). These customers could very well just leave the gaming market entirely, or scale back their purchases quite a bit if they’re suddenly limited to just full-priced games. Maybe publishers don’t care about this, since they don’t really get any money from used games or games that are basically marked down in clearance, but if these people stop buying games that could significantly shrink the market in general, and that’s something they probably will care about.
June 2nd, 2009 at 11:55 pm
@Will
“What? Excuse me why are you complaining about publlishers losing revenue? Who cares about publishers but their mums? Encroaching fiends pick and choose which games to actually advertise.”
You do realize that publishers fund about 80 percent of game development right? Without their capital, most games you love would likely never get made. You think MS is going to fund all the games that Activision, Ubisoft and EA currently fund? Hell no. EA funds a games development because they are gambling they make the money back plus profit by publishing it. No offense, but, dude, get a clue. If you kill publishing revenue, you’ll kill MANY MANY games.
That being said, I don’t mind downloadable games as an OPTION. I personally still like to own something I can hold in my hand. Yes this is old fashioned thinking, but that’s the way it is. I like OWN something period. If you can’t resell it, you don’t own it. Simple as that.