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GameStop says no market for digital distribution until 2014 photo

Most of the people reading this right now download games on a pretty regular basis I would assume. I would also assume that the market for downloadable games is pretty good since even Nintendo has a service, so the format must be making a profit. Still, a handful of downloadable games is a far cry from all out digital distribution of AAA titles, and GameStop seems to believe that we've got a long way to go before it becomes a an "addressable market."

Citing a recent GameStop study that they called "the most thorough study to date on [the capability of digital distribution]," Sterne Agee analyst Avind Bhati told IndustryGamers that only 25 percent of the population will have access to the technology for digital distribution and even then there will be major issues with distribution and storage space. Overall "Management... feels that digital growth and brick and mortar growth can co-exist" and is simply not that worried about it.

As a member of a community that is usually on the forefront of all things technological it's easy to call BS on this as the PSPgo is all digital retail and Microsoft has just announced Games on Demand, but taking a step out of this gaming mecca we call Destructoid and looking at it from a real world perspective, it's very true that the technology is in its infancy stages, and that the majority of the population isn't going to be adopting it in large waves any time soon.

 


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34 comments | showing # 1 to 34

Monodi's Avatar - Comment posted on 06/20/2009 22:03
Monodi
I just don't want retail stores to disappear in any way.... they are some of my favorite things of being a gamer...

Even if GameStop has a bunch of stupid employees, it still is a nice place to talk with other guys/girls about games to check out etc.
Mini-Boss's Avatar - Comment posted on 06/20/2009 22:07
Mini-Boss
retail stores are a sort of club for us nerds, its where we meet and greet and discuss the finer points of games. I do hope they continue to thrive
JLFrelder's Avatar - Comment posted on 06/20/2009 22:09
JLFrelder
I think it will be a while until digital distribution becomes big, but 2014 seems pretty late.
Mini-Boss's Avatar - Comment posted on 06/20/2009 22:12
Mini-Boss
true, and i honestly think that even if it gets big it will never really replace retail stores.
( yes i know thats probably what they were saying about newspapers a few year sago so please dont bring it up )
Dimly's Avatar - Comment posted on 06/20/2009 22:16
Dimly
It makes sense, if you think about it.

Everyone who posts one here is a gamer, has a console, has the internet (obviously), and therefore likely downloads games or game content.

The amount of people I know who own an console but don't have an internet connection or just don't have it hooked up might surprise you. For some, digital is not a priority, and buying retail just makes sense.

Though GameStop would be foolish not to plan for the expansion of internet use (and thus digital distribution), it's not too hard to believe that a lot of people don't take advantage of it. I guess one of the reasons Sony/ MS/ Nintendo keep doing it is because it's low cost.

So many people are missing out though, some of the greatest games of the last year or so have been strictly downloadable.
Haizeus's Avatar - Comment posted on 06/20/2009 22:17
Haizeus
Hell, I just hooked up my home network nine months ago.
garison's Avatar - Comment posted on 06/20/2009 22:28
garison
Yup, broadband isn't even readily available where I live, we have to pay extra $ for our special satelite hookups to have high speed internet.
Electro Lemon's Avatar - Comment posted on 06/20/2009 22:29
Electro Lemon
BUT HOW WILL I TRADE IN MY ROCK BAND GUITARS FOR 3 DOLLARS ONLINE?
HiddenAHB's Avatar - Comment posted on 06/20/2009 22:39
HiddenAHB
HELL NO!!
I love having a pile of boxes.
Besides... what will happen to the retail stores?
Mini-Boss's Avatar - Comment posted on 06/20/2009 22:46
Mini-Boss
megaman 9 was pretty great
Milestailsprowe's Avatar - Comment posted on 06/20/2009 22:47
Milestailsprowe
Steam and the UPcoming Downloading games to my xbox plus amazing download codes will make it almost impossible for me to have a reason to go to a retail store for games. UNless its to get Wii games
Necros's Avatar - Comment posted on 06/20/2009 23:00
Necros
One of the main appeals for me when I buy a game is getting a physical copy, along with whatever tangible bonuses come with that. I celebrate when a standard game includes bonus stuff like Blazblue's launch SKU, and I'm actually disappointed when a game comes with something like an 8-page manual in black-and-white. So while I'm happy to grab lots of downloadable games on XBLA, PSN, and VC that wouldn't be available to me otherwise, I will always prefer a retail copy.

If the console industry becomes more and more similar to PC games, I sincerely hope that they keep selling retail copies alongside their Steam-esque distribution models.
elysse's Avatar - Comment posted on 06/20/2009 23:00
elysse
There's going to have to be a massive die-off of older gamers who prefer boxes with their purchases before Downloadable Only takes off completely. Srsly, you'll take the carts and discs from my cold dead hands before I ever agree to download exclusively. Big games cost big moneys, y'all, and I want at least some box art and a book for my 50-60$.
Ali D's Avatar - Comment posted on 06/20/2009 23:30
Ali D
I'm kind of torn. I still like bonus stuff you get with buying the physical copy, but at the same time I like the availability of Digital downloads. The videogame stores near me are all shit, trying to find copies of things like The World Ends With You or Lock's Quest on the DS have been nigh on impossible. With Steam, I've bought loads of games that I probably wouldn't have found retail copies of in the first place. Plus there's episodic content like the Wallace And Gromit games which are great value.

There's also the question about broadband availability; it's still not as widespread as people think. Downloading a game like Wolrd of Goo or Audiosurf isn't too much of a big deal, but something like Left 4 Dead on Steam is a big ask for people who don't have Broadband. With these people, it's not a matter of preferring a retail copy, it's their only choice.
schuylerv's Avatar - Comment posted on 06/20/2009 23:35
schuylerv
I prefer buying physical copies over digital copies and only buy digital ones when that's the only way to get it. I just like having the actual game in my hand and not have to worry about losing all my games when the system is old and unsupported.
DemonEyes23's Avatar - Comment posted on 06/20/2009 23:51
DemonEyes23
as far as my internet connection is concerned i'm ready for digital downloading but i really do enjoy the bells and whistles of the box but that's not to say i wouldn't be willing to part with it if there wasn't a reduction in price. If companies only have to pay for server space and bandwidth that should be a good bit cheaper than manufacturing the various components of a physical copy so as long as that translates to more money in my pocket and more games on my harddrive etc. then i'm all for it. Sony's had a good start offering some full titles for 40$ instead of the 60$ they ask at retail (like warhawk).
Ffordesoon's Avatar - Comment posted on 06/20/2009 23:58
Ffordesoon
Fuck retail. Seriously, a box is great, but you know what's even better? Not losing my damn games.

Honestly, I don't understand this attachment to buying games through a retail outlet. Especially since most games' boxes are composed of the instruction manual, the box itself, and the game. I like that, don't get me wrong, but both of those things can be replicated digitally. No, you're not holding them in your hand, but they're also not cluttering up your house OR easily breakable. You can't break a Steam file, but you can sure as shit step on a flimsy disc.

Now, I know people like collector's editions. I'm no different. But how many collector's editions have you seen that ACTUALLY justify the extra cost? An extra cost that wouldn't even exist if games were all digitally distributed?

GameStop is holding video games back. They're making our hobby more expensive than it needs to be, burying niche titles, and cluttering our homes with useless hunks of plastic. I'll continue to give them my money as long as a lot of the games I want aren't released digitally, but I will not weep when they finally go belly-up.

And frankly, if GameStop ordered the study, there's absolutely no guarantee that they aren't just trying to placate their shareholders with this "in-depth study."
Zeno's Avatar - Comment posted on 06/20/2009 23:59
Zeno
Everyone with a modern console and internet access has the necessary hardware for downloadable games, I think this qualifies as an "addressable market".
peachboy's Avatar - Comment posted on 06/21/2009 00:32
peachboy
here, here Ffordesoon & Zeno.

for those of us who aren't living in armpit towns and have a solid internet connection, it's embarrassing that we STILL don't have digital distribution at least as a functioning alternative.

also, though i know this is based on zero solid fact, don't you think that removing certain costs like printing pages and pages of manuals and stupid plastic boxes would leave more room to either charge less for the game or put much more design work into the game itself?

also: newspapers. you [i]know[/] how this is going to end.
peachboy's Avatar - Comment posted on 06/21/2009 00:33
peachboy
also: fucked up italics. fail.
Qraze's Avatar - Comment posted on 06/21/2009 01:03
Qraze
they say digital distribution yields lower costs for games but we consumers still don't get lower prices. they want it take over so no one can trade games in or buy used games. it has no beneficial aspects to us other than convenience of it being on our hdd. it gives them control over what is suppose to be ours after we buy them, so we won't really own them, just have them on their terms. i want the choice. i like digital distribution but i love holding something in my hand.

i want the choice.
CelicaCrazed's Avatar - Comment posted on 06/21/2009 01:24
CelicaCrazed
Well I am now finding PSN Cards in Canada so I am completely ready for the PSP Go.
Ali D's Avatar - Comment posted on 06/21/2009 01:48
Ali D
@motorobo: think you're totally right. One day, physical copies of media won't exist at all. It's just a question of when. I still like shopping for CDs, but I appreciate the convenience and choice that things like i-tunes and Bleep.com give me.
Black Nexus's Avatar - Comment posted on 06/21/2009 02:14
Black Nexus
guess gamestop are blu ray people.
gamadaya's Avatar - Comment posted on 06/21/2009 02:23
gamadaya
Please just die Gamestop. I don't care about the digital/retail debate as much as I used to. I just want to see one of the worst retailers I've ever had the misfortune of shopping at to bite the dust.
Cypher5235's Avatar - Comment posted on 06/21/2009 04:37
Cypher5235
I don't mind the idea of digital distribution(DD). BUT, only along with regular distribution method. I want a hard copy of any game I play when I pay 60 bucks for it. If its XBLA, I dont mind a total DD copy, I guess, but I will never buy a game with out disc's.
zgerhard's Avatar - Comment posted on 06/21/2009 05:23
zgerhard
This may very well be an "addressable" market in Europe where 9 out of 10 households have incredibly high speed internet. On this side of the planet, though, some kids are still on dial-up to check their facebooks, so I definitely see where the analysts are coming from.

Beside, downloading triple-A titles will require a lot more high speed in more areas - downloading a game like Killzone 2 would take forever. Why do that when you can just take a trip to the store, grab the disc, come home and play?

But, I do agree that in the end, games will turn into what mp3s turned the music industry into. It's just a matter of time as infrastructure improves.
Scroll's Avatar - Comment posted on 06/21/2009 06:41
Scroll
I've run out of shelf space so I'm eagerly awaiting the arrival of a viable market for digital distribution.
walkyourpath's Avatar - Comment posted on 06/21/2009 09:04
walkyourpath
I'm an "older" gamer, and I'm happy to see the proliferation of digital distribution. But, there will still be a few games here and there that I will want to get physical copies of, usually because of swag attached to the purchase. The Fallout 3 Lunchbox comes to mind.

Also, all my UMDs got stolen along with my old PSP when my house got robbed, so there's nothing really keeping me from getting a Go! when it comes out.
that1dude24's Avatar - Comment posted on 06/21/2009 12:16
that1dude24
While I hate UMD's just for the sheer noise they make when loading, I do like physical media versus digital. On my old psp fat, It takes me forever to download a game. Something must be wrong with my network though, as I have a 500kb/s(actual data) top speed, but It took me three minutes to download a MB demo.

Also, what happens to used games? I like being able to pick up last-gen games for 5$ a game. Then there's the problem of old games, when the system dies, what happens to the servers you download the games from? Do they go away, or do they stay relatively the same price as when they were released?
brainderailment's Avatar - Comment posted on 06/21/2009 13:19
brainderailment
Says gamestop. Also, if companies like sony don't make things like the PSPgo, then there never will be a market. Demand just doesn't appear out of nowhere.
Remoraz's Avatar - Comment posted on 06/22/2009 09:13
Remoraz
The study is probably spot on, to be honest. USA is very behind most other countries with high speed internet access. Including most of Europe and (shocker) JAPAN, you know, where all the PSPs get sold.
dramakate's Avatar - Comment posted on 06/22/2009 19:53
dramakate
Check out this great interview with Dawdle co-founder Sachin Agarwal. He talks about how this sales platform is transforming commerce on the internet and the way gamers can “change the game”. Change isn't always a bad thing!
http://3rdpoblogs.com/colderice/2009/02/25/the-business-of-video-games-has-new-avenues-for-distribution-with-dawdle/
Static Jak's Avatar - Comment posted on 06/26/2009 20:00
Static Jak
I don't know. I still think we're not at that stage yet. First obvious thing that comes to mind that not everyone has access to high speed broadband to download a full game with ease. Also that so many have bandwidth limits.

The you've got something like credit cards to deal with. Plenty still don't have one. And a large amount of gamers are under 18. Even then, how many 18 year olds have a credit card? And you've still got those paranoid ones who won't dare use their credit card online for anything.

And we've still got to rely on hardware anyway. A lot of people still have 20Gb HDDs for the 360. How many games could they fit in it? And MS still charge ridiculous prices for their 360 HDDs. Digital distribution is all well and dandy but what happens when your 360/PS3/PC is full up? Go off and pay for another HDD?

And casual gaming. As long as that lives, retail lives. More times I've seen some casual gamer over the age of 50 go in and ask "have you got a nintendo machine?" They don't even know the wiis name. Imagine trying to teach most of them even the concept of digital downloads online. And they're such a major profit to the games industry too.

And then you've got the DRM crap.

Just so much crap to sort before considering digital distribution as the norm.
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