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Gamestop Digital Downloads - If you can't beat 'em, join 'em
El Guaco
Registered User regular
Registered User regular
Well, it looks like Gamestop has decided to join their competitors by offering digital downloads for games. They already have PC games for downloads, but the article seems to indicate they are entering the fray of DLC for games already purchased. The details are blurry about how it will work, but it's a step in the right direction for them.
News Article
The article seems to imply that they will be a 3rd-party merchant for Xbox Live and PSN. I wonder why MS and Sony would be interested in involving a 3rd party to cut into their online sales?
Discuss!
News Article
NEW YORK (Reuters) – Customers who visit GameStop Corp stores will soon be able to purchase digital upgrades to their favorite video games, as the retailer eyes a shift toward digital distribution of games.
The new program, which GameStop will start testing early next year, will work in conjunction with online services offered by leading console makers, such as Microsoft Corp's Xbox Live and Sony Corp's PlayStation Network.
Under the program, a GameStop shopper who learns about a new level available for, say, a war or sports game could immediately purchase that upgrade. When the shopper arrives home, the add-on will be available to download and play.
"A large market for full game downloads is not imminent, (but) the add-on downloadable market will grow," GameStop Chief Operating Officer Paul Raines said at the BMO Capital Management Digital Entertainment conference.
These additional payments may be a key driver of revenue for publishers and retailers in the video-game industry, which has seen slow overall growth amid the tough economy. The idea is that consumers are more likely to pay to enhance beloved games than they are to experiment with unknown new games.
So far, GameStop has been able to preserve growth despite the economic downturn, as healthy demand for video game consoles by Nintendo Co Ltd, Sony and Microsoft has driven consumers into GameStop stores to buy software for the systems.
Raines' comments come a few days after GameStop affirmed its outlook for the quarter ending in October, saying it expects its earnings per share to be between 27 cents and 33 cents, excluding debt retirement costs. It also sees sales at stores open more than one year to be down 6 percent to 11 percent.
At the event, GameStop Chief Executive Dan DeMatteo said looking ahead to next year, business is "expected to be strong, given known titles."
(Reporting by Franklin Paul, editing by Maureen Bavdek)
The new program, which GameStop will start testing early next year, will work in conjunction with online services offered by leading console makers, such as Microsoft Corp's Xbox Live and Sony Corp's PlayStation Network.
Under the program, a GameStop shopper who learns about a new level available for, say, a war or sports game could immediately purchase that upgrade. When the shopper arrives home, the add-on will be available to download and play.
"A large market for full game downloads is not imminent, (but) the add-on downloadable market will grow," GameStop Chief Operating Officer Paul Raines said at the BMO Capital Management Digital Entertainment conference.
These additional payments may be a key driver of revenue for publishers and retailers in the video-game industry, which has seen slow overall growth amid the tough economy. The idea is that consumers are more likely to pay to enhance beloved games than they are to experiment with unknown new games.
So far, GameStop has been able to preserve growth despite the economic downturn, as healthy demand for video game consoles by Nintendo Co Ltd, Sony and Microsoft has driven consumers into GameStop stores to buy software for the systems.
Raines' comments come a few days after GameStop affirmed its outlook for the quarter ending in October, saying it expects its earnings per share to be between 27 cents and 33 cents, excluding debt retirement costs. It also sees sales at stores open more than one year to be down 6 percent to 11 percent.
At the event, GameStop Chief Executive Dan DeMatteo said looking ahead to next year, business is "expected to be strong, given known titles."
(Reporting by Franklin Paul, editing by Maureen Bavdek)
The article seems to imply that they will be a 3rd-party merchant for Xbox Live and PSN. I wonder why MS and Sony would be interested in involving a 3rd party to cut into their online sales?
Discuss!
El Guaco on
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I don't think your conclusion is supported by the article. It's pretty clear that they are talking about DLC, not full games. Bolding the most obvious parts.
http://steamcommunity.com/id/Cykstfc
It's only a matter of time until the same convenience spreads to consoles. Really, I think the only thing posing a barrier to entry for full downloadable releases on consoles is that console makers are still putting shitty sized hard drives in their machines. It's getting better, but they are still 50-75% behind, in terms of size, the cheap ass storage you can get on a PC.
Person A buys Game X from Gamestop. Person A buys DLC for Game X from Gamestop. Person A trades Game X to Gamestop. Person B buys used copy of Game X from Gamestop. Person B buys DLC for Game X from Gamestop.
But I'm with you, I don't understand how you can differentiate DLC sales from selling generic MS points which could potentially be used for the same thing? Unless you bundle it as a package? When I pre-ordered Beatles Rock Band, GS gave me coupon codes for DLC. Or maybe offer a discount?
Obviously they can't deal in used DLC, but this obviously will work rather nicely with their slash-and-burn used game focus. Customer A comes in, buys a "new" used game for 5 bucks off the regular price, buys the DLC for an extra ten bucks, returns in a few weeks and trades in the game. Customer B shows up, buys the same game, buys the same DLC for ten bucks, and so on and so forth. You can't transfer your DLC to another person, so each time a game is sold it will require another piece of unique DLC.
Gamestop will also be able to cut deals for DLC so they get more profit for pushing the DLC as opposed to just selling point cards. Yeah, it makes business sense, but Gamestop is so sleazy that the whole thing is going to be set up for maximum profit and minimal customer or publisher satisfaction. For example, let's say some DLC gets released a month after a game's release. Gamestop can offer to buy a huge chunk of DLC licenses from the publisher for a reduced cost, then turn around and charge the consumer the full price for the DLC. Gamestop makes more money from the DLC than selling none at all, the consumer doesn't save any money, and the publisher might make back the costs of selling the DLC at a discount price because they sold in volume. With today's market, publishers will definitely grab at this and Gamestop will leverage for all it's worth to try and establish long-term contracts detrimental to the publishers.
It's all just a half-assed attempt to establish something before consoles inevitably turn to DD service. Once the brick-and-mortar element is removed, publishers can charge much less and remove all incentive for customers to bother with used games. That won't happen until the next-generation of consoles, though, so for the time being we can expect the usual Gamestop shenanigans as they try to screw over publishers and consumers while the market allows for it.
That storefront (and the downloads) have been there for years. Every few months some one notices it and thinks that they've just discovered it, but Gamestop has been in the DigiDistro game for PC for a little while now.
You're right. I confused the DLC with downloadable PC games. Maybe I'll change the OP.
Edit: Fixed.
More importantly, how do you fight the lack of broadband penetration in the states? We have "broadband" here, but it's shit, as is most of the rest of the state, and we're not exactly alone. How do you have a console that is 100% dependent on digital downloads when a good chunk of the people can't access those files?
And the way they discussed it there was not that it would give you a code to input, it would directly send the purchase to your account, and it could start downloading as soon as you turn the system on next.
And yet two thirds of music sales in 2008 were still physical, despite the fact that digital media is actually much MORE accessible in that arena, and carries with it benefits both in price (cheaper) and in flexibility of purchase and use (buy individual tracks, load to mp3 players, burn cds, make ringtones, etc.) that digital games do not carry.
Digital Distribution isn't the "sure thing" that a lot of techies like to insist it is because it is a much bigger shift than people give it credit for. It is the move from entertainment as product to entertainment as service. Removing the tangible good from the equation is a BIG DEAL to many consumers, and it's more than just a generational thing. If I have a book, or a CD, or an Xbox disc, I have the full capability to enjoy every aspect of the media, but I also have to ability to share it with friends, to enjoy it as I see fit without any restriction by or dependence on any other entities, and when I decide that i am done with it, I can sell or trade it to another party, in order to recoup some of my costs.
Digital media removes these benefits, giving me instead a data file (or sometimes, only access to a remotely stored data file). To be more precise, though, I am not actually given ownership of the file itself, I am given a license for use of the file, and I am only technically allowed to do with the file what my license allows for. Sometimes this might mean an ability to lend-out the file, or even re-sell the license, but in general, this is not the case, and in fact I am limited in even the number of devices that I use to access the file. Now, I absolutely understand WHY companies put these limitations in place, but it does not change the fact that they lessen utility for the consumer.
Also, consider the implications for future availability. Due to the ability to transfer ownership of physical items from one person to another, we still have ancient books, or more recently, rare video games from decades past. With a digital only solution, in a scenario with no license transferring, once a game stops being offered, or a service goes tits up, no one new would ever be able to acquire that game (short of buying a machine that already had it installed.)
What are the benefits to consumers of digital distrobution? There is a utility derived from the lack of physical space that the item takes up, (but at the same time, there is a digital space requirement.) There is the benefit of convenience in being able to purchase and download the files at home. There are no other inherent benefits, but there are many disadvantages, ones that I've mentioned already, and others that I haven't. The REAL benefits of digital distribution are actually on the supply side, in lowered costs (production, distribution, and retail), and in the rather consumer-negative area of greater control of product flow (suppliers benefit from being able to eliminate second hand markets, micromanage availability, and control HOW consumers use the products that they purchase)Giving suppliers greater control in all of these areas unbalances the free market (little f, little m) that previous existed for the product. Additionally, suppliers have shown, thus far, to have very little interest in sharing those cost savings with consumers, often making obtaining digital copies of products even more expensive that physical copies, as physical copies can occasionally be obtained at deep discount on clearance, but there is no such thing as clearance of intangible goods.
There are certain individuals who receive more utility from digital goods (because the few benefits matter to them, but the many downsides don't affect how they would otherwise be using the product.) There are certain niches where digital distribution also works well, and is quick to be adopted (as you would expect, the tech sector is right in the heart of these niches.) That DOES NOT mean, though, that digital distribution is the ultimate answer for all markets. When it comes to video games, specifically, there are plenty of lower income gamers who do not have an internet connection at home (or at least a broadband one) and who also routinely use the proceeds from selling the games that they are done with to pay for other games that they want in the future. For them, digital distribution would prove much more expensive.
So Steam may work well for the particular group of people who use Steam, but that doesn't mean that all media will be digital soon, or even that all media SHOULD be digital soon. Disposable media should be digital, and durable media should be physical, IMO, but that is a MUCH larger discussion.
But, you know what, fuck GameStop. Because even though this is an interesting idea, it's only going to be used to milk money from consumers. I can't even walk in to a GameStop these days without some 19 year old douchebag pestering me to buy a membership card, a strategy guide, an extended warranty, and whatever other bullshit, let along them trying to push DLC on me (DLC that probably should have just been included in the original game release anyway) before I leave in disgust after seeing the $54.99 price tag on a used copy of a $59.99 game.
When we get to the point of digital distribution becoming an equal distribution method to physical delivery (as in, every game released for a system has a physical and digital version available for purchase, which will likely be the case for Microsoft and Sony's next console generation) as opposed to a secondary distribution method to physical delivery, GameStop is going to be in some serious trouble. I don't think their used game sales and new Nintendo sales (taking bets on how many console generations it takes before Nintendo gets on the DD bandwagon) can keep them afloat, especially since even WalMart and TRU are experimenting with used game sales.
Really? You think the only barrier is hard drive size? Not the fact that broadband still has a shitty comparable penetration rate compared to dial-up? Or that even for those with broadband, downloading an 8-gig game (nevermind the artificially inflated PS3 games) can take hours?
This forum has a serious blind-spot when it comes to digital-download-only services.
How is this different from other businesses, exactly?
Retailers attempt to milk money from consumers, and consumers attempt to find the best sales, deals, coupons, and mis-priced items possible, so as to avoid paying a retailer's full price.
It seems so strange to me when people complain about a store "only wanting to make money". What SHOULD they be wanting? Moreover, when you go to a retail store, do you walk in thinking "I sure hope that my purchase today will give this store enough money", or do you go in trying to spend as little money as possible?
When a retailer lies to consumers, or breaks the law, that is an issue. A retailer charging high prices or upselling, though, is just a retailer looking out for themselves, which is no different from a consumer who tries to buy items on sale or on clearance.
Hard Drive size isn't really an issue with the PS3 anyway, since the drive is user-replaceable. You could drop in a 1TB hard drive, if you had the money and you so desired. If you're using an Xbox 360, then yeah, you're pretty much fucked.
I believe that broadband penetration coupled with good old fashioned fear of change are the two biggest obstacles to digital distribution.
There is a difference between trying to make money and trying to make money at the expense of quality, ethics, or consumer appreciation. GameStop is one of the most cutthroat businesses in existence. They treat their customers bad, and their employees even worse, all in the name of "looking after themselves".
And the argument can always be made that people don't have to shop there, and they don't, but the vast majority of gamers aren't like us, they just don't know any better, and it bothers me as a gamer and as a consumer knowing that GameStop is probably banking on that.
I'm sorry if this is turning into a Shit on GameStop thread.