Analyst: Digital Distribution Won’t Impact GameStop Until 2017
Analyst: Digital Distribution Won’t Impact GameStop Until 2017
October 15, 2009
Broadpoint AmTech Analyst Ben Schachter doesn’t question the fact that digital distribution of games is increasing, but he doesn’t see it having an effect on GameStop’s business until 2017.
Limited hard drive space (he estimates 70% of current-gen consoles have no hard drives), bandwidth limitations and an extended console cycle (which Schachter sees continuing through 2014) are among the factors that will allow brick and mortar retailers to fend off their digital counterparts reports IndustryGamers.
Physical media still holds sway over gamers as well, notes Schachter:
…consumers attribute a value to having a hard/physical product that can be sold, traded, and is portable. GME's own study put the residual value of physical game disc at approximately $10-20 dollars vs. a download-only version of a game.
He also points to the “relative failure” of downloadable content for Grand Theft Auto IV:
The Grand Theft Auto (GTA) franchise is among the most well-known and successful brands ever created in the video game industry, yet having digital-only distribution of a product tied to GTA's most recent console title led to very disappointing sales. The bottom line is that retail still matters.
In these trying economic times, as our sister-site GameCulture reports, more and more gamers are resorting to digital downloads for mobile devices because of the attractive price points.
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Posted 07/30/10 at 10:25am
ZippyDSMlee: No lan too but that will be hack in, with 2X maps its as big as SC,so....want more now ;P
ZippyDSMlee: No lan too but that will be hack in, with 2X maps its as big as SC,so....want more now ;P
Posted 07/30/10 at 10:19am
Rodrigo Ybáñez García: @Cheater: Thank you, I´ll try it later. It happened after I installed the new upgrade, btw
Rodrigo Ybáñez García: @Cheater: Thank you, I´ll try it later. It happened after I installed the new upgrade, btw
Posted 07/30/10 at 01:27am
Andrew Eisen: I got hired to sing bass for an a cappella group tomorrow night. I have nine songs to learn. Yikes.
Andrew Eisen: I got hired to sing bass for an a cappella group tomorrow night. I have nine songs to learn. Yikes.
Posted 07/29/10 at 10:53pm
E. Zachary Knight: Zippy, I thought SC2 was only 1/3 of a game? ;)
E. Zachary Knight: Zippy, I thought SC2 was only 1/3 of a game? ;)
Posted 07/29/10 at 08:59pm
ZippyDSMlee: SC2 is god! BOW DOWN TO SC2!
ZippyDSMlee: SC2 is god! BOW DOWN TO SC2!
Posted 07/29/10 at 07:50pm
Cheater87: Garcia that sounds like a A/V problem. Try turning the TV on and off or doing that with the AV changer. Thats how I fix mine.
Cheater87: Garcia that sounds like a A/V problem. Try turning the TV on and off or doing that with the AV changer. Thats how I fix mine.
Posted 07/29/10 at 06:50pm
Andrew Eisen: The urinals now have floor mats!
Andrew Eisen: The urinals now have floor mats!
Posted 07/29/10 at 04:54pm
Rodrigo Ybáñez García: My PS3 is having some kind of failure. The sound is still there but the image is totally out...
Rodrigo Ybáñez García: My PS3 is having some kind of failure. The sound is still there but the image is totally out...
Posted 07/29/10 at 03:39pm
ZippyDSMlee: SC2!!SC2!!!SC2!!!!!!
ZippyDSMlee: SC2!!SC2!!!SC2!!!!!!
Posted 07/28/10 at 02:45pm
beemoh: Farmville creator Zynga closes one of its games, customers who paid for in-game content unimpressed (Link)
beemoh: Farmville creator Zynga closes one of its games, customers who paid for in-game content unimpressed (Link)
Posted 07/28/10 at 09:49am
Rodrigo Ybáñez García: He blames the internet, but not his abusive mother.
Rodrigo Ybáñez García: He blames the internet, but not his abusive mother.
Posted 07/28/10 at 09:48am
Rodrigo Ybáñez García: Akihabara murderer blames cyber bullying for rampage in 2008
Rodrigo Ybáñez García: Akihabara murderer blames cyber bullying for rampage in 2008
Posted 07/27/10 at 02:49pm
E. Zachary Knight: Holy Awesome Game Trailers Batman. Superman heat visioning people in the face and Jedi using Hadouken. Awesome.
E. Zachary Knight: Holy Awesome Game Trailers Batman. Superman heat visioning people in the face and Jedi using Hadouken. Awesome.
Posted 07/27/10 at 01:36pm
ZippyDSMlee: Ah I didnt see it down there :P
ZippyDSMlee: Ah I didnt see it down there :P
Posted 07/25/10 at 01:51pm
ZippyDSMlee: Cheater87:I do not think they see the need for it its a shame its more needed than E10.....
ZippyDSMlee: Cheater87:I do not think they see the need for it its a shame its more needed than E10.....
Posted 07/24/10 at 08:19pm
Cheater87: Zippy I sent them an email about a 15 age category a year or so ago and they said they had no plans for one at the moment. I'll send another one and see if they respond back again.
Cheater87: Zippy I sent them an email about a 15 age category a year or so ago and they said they had no plans for one at the moment. I'll send another one and see if they respond back again.
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Comments
Schachter, Pachter, why is it that when someone with a name like this analyzes games, they come off sounding like they've no idea what they're talking about.
70% of current gen consoles dont have a hard drive? The XBOX, XBOX360, and PS3 do, the PS2 had it as an option, and i'm not sure about the Wii, it's got memory, but i'm not sure what's in there. Still, i'm not positive 70% is even a good "estimate", depending on what you even call current gen.
and who the hell would use GTA as a comparison for the entire industry. I know we can all think of ONE name, but nobody cares what he says.
I've bought a LOT of content online over the past year. the only thing i've bought in a store was my Wii, and it was a used wii... and yeah, that's it. i even bought my controllers and battery packs online (granted they're not digital)
And if you know anything about me from previous posts, i dont buy games very often anymore.
When taken as a whole 70% don't have a hard drive. Yes the Wii has some internal storage, but it is not near enough to support widespread DLC. Plus the 360 still has the harddrive as an option (the Arcade has none) so you can't say that every 360 in people's homes have a harddrive. The nyou have hard drive capacity. Yes you can upgrade the PS3's hard drive but you are limited to a single 2.5 inch drive. Those max out at 500GB. The 360 has a max of 120 GB. Neither are that great whe nyou plan on downloading all the games you will play over the life time of the console.
The reason they used GTA as a sample was be cause of the incredible popularity of the disk based games in the series and the comparitive failure of the DLC expansions for GTA IV. When a game sells in the 10s of millions and the DLC expansion sells in 1oos of thousands, I would call that a failure.
E. Zachary Knight
Oklahoma City Chapter of the ECA
http://www.theeca.com/chapters_oklahoma
You can get a 1TB drive. I believe they are around $150 last I checked.
I don't see digital distribution becoming the norm for a good while yet. Too many people don't trust a digital copy as compared to physical one in terms of use and ownership.
Moving to digital distribution seems to generally be less about being more convenient for the customer and more about publishers having more contro lover the media.
Say you greatly enjoy a game and a sequel is made, and a publisher wants yo uto buy the sequel. They can cut off support for the older one or release a patch to make it unplayable.
Pretty much what is going to happen eventually. Of course physical medium isn't any different in that regard either. Just look at Nintendo and Microsoft. How many Gamecube games and Xbox games came out in the past 2 years?
Actually more obvious reasoning is to kill used game sales... no physical copies mean no used games
I don't like the idea of DD. It means no more importing uncensored video games. You will be stuck with the censored version. Unless you can make an account for a different country and get a XBL or PSN money card to use for that region.
ehhh. I could have sworn I seen them selling the GTA expansions in the store on disc. Im guessing it just installs to the hard drive or can be played directly from the disc? anyone know for sure?
IIRC, the first one was released as a voucher in a box.
There is a disk version coming out that's a standalone of the first two.
If Microsoft wants to actually create this digital download market they seem be focused on (XBLA + games on demand), they really need to get those HDD prices under control.
I need a bigger HDD for my 360 so I can buy more content from them...and I still can't justify the price point even for the 60GB. It makes no sense for the markup to be so high when the very puropse of the HDD is to facilitate more DLC sales.
I have a feeling I have a pretty good idea on where that figure was pulled from. You can polish it with any explaination you want, but you can't deny it's origin.
IMHO, and in my personal believe, gamestop is here to stay
Jesus Jack Jones Thompson loves you, so kill for his amusement so we can get money for the new "People's Temple of Jesus Jack Jones Thompson"
Here's a possible situation if we go all-in on Digital Download:
We now have Xbox1080's with a 5 Terabyte harddrive for all the games we want. Games on Demand is now reasonably priced (15% or more cheaper than retail version) and Gamestop (and other retailers) have been left in the dust.
Here's the problem:
Gamestop (and fellow retailers) go out of business. Guess what? This is just cutting out the middle man. Then, other industries follow suit, and now we have no more middle-men.
We also now have a national unemployment rate of 40%.
Society needs to decide if we can afford to cut out the middle-man or not. We're going to stagnate in the exact situation we're in right now until we do.
I see another problem:
Let's suppose that we reach the utopic (in the view of GameStop haters...) future where all retailers are gone, and all games are digital.
So let's suppose that everyone buy their games on Steam and Windows/XBOX Live.
Then MS change their mind (like they changed before with Zone.com) and dump Live! in favor of Microsoft somethingelsenewandrevolutionarythatalsorequiressubscription.
Also Valve for some reason folds.
ALL your games are gone.
Or another one: You see that really cool game, you play the demo on your friend house, and you buy it... The game totally suck, because the entire game is exactly like the demo repeated several times, no new gameplay, no intersting story... The game is the new Daikatana (or the new Battlecruiser). You want to return it? You are screwed... Want to sell it? Even more screwed.
Another one: You want to sell your console and buy a unrelated one... Congratulations, now you have an account with some microsoft points hanging there (noticed how they sell more MS points than the price of games, so all the time there are some few leftover points?), and 2000 USD worth of games that you don't own the console to play them.
Another one: Microsoft decide to "pull a Amazon" and deactivates your beloved game, like Amazon deleted books from Kindle.
One more: They keep monitoring your connection, and they decide for some reason that they dislike you and ban your account. 2000 USD games gone.
Now the most common one that will annoy several people: Your internet connection fails (like, a tree fell in the internet cables... or the ISP has an user overload and the conection go unstable... all sorts of that stuff). No game for you.
And finally: No money for media manufacturers and retailers. Also, no more stores not only mean no more employees, but it also mean no more going to store and ask your friend at your side: "Hey, I never saw this game before, what do you think?" or going to the store that has some consoles, play some games for free there, exchange the lastest fatalities for MK (I suck at MK, but I loved how much people went around hiding or showing their MK secrets...), ask the salesperson if the game will work in your machine properly, buy periphels... (seriously, if retailers fold, who do you think that will sell the accesoires? digitally delivered game controllers?)
EDIT: One more CLEAR message for Digital Distro fans: Without retailers there will be no more GUITAR HERO AND ROCK BAND, now tell me that you hate those games and that they are good to cease existing.
criadordejogos.wordpress.com
First of all, it sounds like you are attacking my opinion, but it reads like you and I share the same vision.....so I can't tell what you're getting at.
And two, while I agree with most of what you said, I don't understand the first part, about the new Microsoft thing-a-mabob, and how games stop existing? I don't see any corrolation, unless you mean the new thing-a-mabob is not game-related?
I think what was suggested was that if games are purely data and that data needs to 'check in' with the the main server back in Valve/Microsoft/Sony HQ then you're SOL if that company goes under and leaves you with no way to play your games without them. After all, if they are about to be shit canned how likely is it that they're going to put the effort into provided a way for their users to keep playing their games without them around.
I don't see it as an attack on you or your beliefs, just a general lack of trust towards an entity that would control whether you could play the game you bought the 'liscence' to. And I happen to agree. Seems like it could become just as big a gamble as weekend in Vegas.
Exactly! I DO own lots of games on Steam, but I wish I didn't and that those games were sold legally in my country, but there are only two ways to get them here: Steam or Piracy.
And something that I fear is that someday Steam will fail, and I will be unable to play the games (altough Steam has a offline mode, that I used extensively since the internet infrastructure here suck, it does not work properly all the time, and also it only work for already installed games, if Steam dies I will be unable to re-install any of my games).
Another thing that is really sad is that you have to own a copy for each person in the house that want to play the game, or share accounts (something that usually is against hte EULA anyway, and get you banned if discovered). If that was the case years ago, I would never be playing games, my parents would never buy one copy of each game for me and my sister (yes, my sister play lots of games, in fact during Counter-Strike 1.5 times she could probably kick your ass).
If you peer at Steamworks page, it advertises that their system make the user the owner of the game, and only him. This is good for loners and travellers or some people like that, so you can log-on into your steam in several places (and several machines) and play your games. But in community oriented cultures it suck, some places in the world has households with like 10 children, noone is nuts to buy 10 copies of a game, and between buying 10 copies or buying none, they will prefer buying none (and pirating if they really want the game...)
In my view digital distro and retail stores should co-exist, they both have their usefullness, digital distro favours indies and people from neglected countries (seriously, J has its own region and market, but there are countries that are much bigger that has no official game sales from most companies). While stores guarantee that your game is yours (and not licensed). And some people like the boxes, manuals and whatnot.
criadordejogos.wordpress.com
Limited hard drive space is a limiting factor in digital distribution? Gee, thanks Microsoft for overpricing your crap. I actually cannot buy any more stuff from Live because there's no room left on the drive for it. They're losing a ton of money because of how overpriced their hard drives are.
[b]Analyst[/b] I almost stopped reading here because I thought it was pachter opening his mouth again.
On topic:I hate the idea of DD to be the be all end all of video games,it's not more convenient for the consumer more like the publishers having more control. I like to buy alot of games for a system I payed $300 or more on and there's not enough HDD(especailly nowdays) to account for that and I do love the artwork covers to most of my games and I feel that I HAVE to have a physical copy so I can sell it,lend it to a friend and vice versa I'm looking forward to the next couple of years of gaming but DD is not what I want to see fortunately shitty connections is common among the world and there's not enough HDD to hold 'X; amount of games.