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Game Retailers Hurting Themselves With Digital Distribution
Posted by
Soulskill
on Tue Apr 21, 2009 01:29 AM
from the can't-download-a-guitar dept.
from the can't-download-a-guitar dept.
GameBiz recently had the chance to speak with Brad Wardell, CEO of Stardock, about pricing and distribution within the games industry. Wardell follows up a bit on the Demigod piracy fiasco from a few days ago, and mentions that retail outlets may be on their way out.
"Retailers need to be careful about this stuff. They're kind of signing their own death warrants once they push digital distribution at the store. Once you have the thing set up — once you've experienced how to purchase the game or deal with it online — why would I go back to the store for the next purchase? Especially if the store isn't providing added value. If you're a retailer, you're killing yourself. If I can't get a game off Impulse, I'm going to Steam. I like stores, but I'm really lazy."
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How Piracy Affected the Launch of Demigod 613 comments
Demigod is an RTS/RPG hybrid developed by Gas Powered Games and published by Stardock, a company notable for their progressive and lenient stance on DRM. The game was set to be released on April 14th, and shipped without any form of copy protection. Unfortunately, retailer Gamestop broke the street date and released it earlier in the week. A day after pointing this out, Gas Powered Games posted some numbers about the players hitting their servers. Roughly 18,000 connections were made from legitimately purchased copies; over 100,000 were made from pirated copies. Meanwhile, the servers, which were not yet ready for that level of traffic, buckled under the strain, resulting in poor experiences for people trying to participate in multiplayer. While some reviews were positive, others criticized the game for the connectivity issues. After another day, they were able to stabilize the servers to the point they'd planned on for the original launch.
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Seems kinda obvious. (Score:4, Interesting)
This applies even more so for digital media where the entire product can be downloaded (barring shiny manuals and soforth that rarely happen these days anyway). Isn't a physical retailer becoming irrelevant anyway?
Seems is all there is. (Score:3, Insightful)
Books don't run on a computer. You can "download" a book, but using a laptop to read a book is inconvenient, and an e-book reader is expensive and clumsy.
But software needs to run ON the computer. There's no real benefit to the packaging and/or CD itself once it's installed, other than you can get $3 selling it back to (ahem) the local software/games store.
Used games is what the local software store makes money on, anyway. I bought GTA 3 for PS2 at the local store for $7, and I doubt the the original guy go
Re:Seems is all there is. (Score:4, Insightful)
You all seem to be ignoring that deep down, most of us are still hunter-gatherers.
Personally, I like reading stuff on screen. Gives me way less cramps than holding a book or keeping my head at weird angles because the book is on the table. Yet, when I buy stuff, I want a physical presentation of that to put on a shelf. I want my books looking as nice as possible, I want my movies as DVDs and I want the good games to have the packaging standing around somewhere (with such a low number of good games coming out these days, the space used is negligible).
What I'd like to see is this: I go to Amazon, buy a book/movie/game/music and they'll send it just as we're used to. Then there's the option, like a gift wrap, to download the thing for another 3 bucks (gotta pay for bandwidth and server storage after all).
That's the way I want it. I don't want to have to bend over backwards to get my digital content from my media onto my harddrive. Even worse with non-digital content. The mind boggles at the thought of scanning a whole book let alone half a dozen or more. Considering that publishers have digital versions of just about anything they produce, one should think this would be a piece of cake.
Parent
Re: (Score:2)
What I'd like to see is this: I go to Amazon, buy a book/movie/game/music and they'll send it just as we're used to. Then there's the option, like a gift wrap, to download the thing for another 3 bucks (gotta pay for bandwidth and server storage after all).
Nah, that's redundant. Why should I have to pay to get dead trees when I only want to read it on the screen? You like dead trees, that's fine, but I don't have the skyscrapers to put all my downloaded books in. (Naturally, all from a legal source, and naturally, I wouldn't have this many if I had to build a library to store them.)
Maybe download could be a delivery option, but forcing me to get it in two formats is just weird.
Read on your Mobile (Score:3, Insightful)
A good mobile phone can be used to read eBooks. And that is not at all expensive and clumsy.
I know it is off topic but I hate amazon for breaking the mobipocket idea of "read on the device you already own" to push there Kindle thingy.
So stupid - got the whole infrastructure for platform in-depended eBooks when they purchased mobipocket and they broke it.
Re: (Score:2)
Ebook readers have screens that are so much nicer to read for long periods of time, it's just like reading a real book, and not at all like having a light shining in your eyes.
I was going to buy one for my commute (by train), but then I noticed my nearest public library was just over the road from the station and didn't bother.
A good solution would be to put an e-paper screen on a phone, although currently that'd be at the expense of watching video etc.
Re: (Score:3, Informative)
I don't mind eBook readers. What I do mind is reduction of choice or unnecessary and incompatible changes to an established file format.
Mobipocket can be read on various eBook devices, Windows PCs, PDAs and Smartphones.
Mobipocket. You can buy Mobipocket eBooks from about a dozen shops - most of which even features in the Mobipocket software them self.
Mobipocket was inviting other companies to join in.
And what did Amazon do after they purchased Mobipocket? A minor but incompatible change to the file format a
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Should I point out that you're a Luddite now, or wait till the end of my post?
Books are a terrible format for information to come in, it's easy to lose ones place, bookmarks can fall out easily and one has to find a position which is comfortable, the size of the print and the spacing are usually not right for large portions of the population.
Computers can solve most of those problems quite easily with technology that we already have, and pretty much all of that has already been addressed by at least one ebo
Re:Seems kinda obvious. (Score:5, Insightful)
Only for the excessively rich. The rest of us wait until the game hits the $19.95 bargain bin.
you might be incredibly wealthy and thinks that $69.99 for a game is nothing, but 90% of us think it's insane and wait for it to become affordable.
Digital distribution allows them to keep the price high as hell forever if they want, It costs nothing to make more copies for them and they dont have the stock of CD's or DVD's out in stores getting dusty over the course of a year forcing the price down.
also it helps game companies by destroying the used game market. If I have to buy all my Wii and Xbox360 games online, I cant sell them used or buy them used...
and the Game publishers are salivating uncontrollably over that idea, they desperately want the used game market to go away.
Parent
Not necessarily (Score:4, Interesting)
With music, the stuff that really matter to me, the musicians I really like, e.g. U2, Def Leppard, etc. I still buy the physical CD even though I could just as easily buy the digital versions from the comfort of my room. Not only am I a completist, I am a fan of those bands. My "B-class" bands or one-hit wonders, yeah I do buy the digital versions.
Same principle with games. I've been waiting for StarCraft II, Diablo III, etc. Even if I could get them digitally (if offered), I'd still buy them from the local store when they come out. I've gladly paid a premium for the physical copies of the games I really like over the years. Not just for the nostalgia, but also to support our local store.
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That's nice that you buy the CD, but you're part of group of consumers that are fast becoming a minority.
Obviously game stores won't disappear soon, but they'll definitely become very niche, for collectors. Forget about nationwide chains. Remember "Tower Records"?
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There is a "Tower Records" in the mall near me (AEON Okazaki, Japan), it is just the stores in the US that liquidated.
Too bad so many of the CDs in that store are over ¥3,000.
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You're so exotic! Do you read mangas all the time?
Pity us poor fools who don't know the exchange rate between our local currency and the Nippenny.
3000 Bells, says the raccoon (Score:2)
Pity us poor fools who don't know the exchange rate between our local currency and the Nippenny.
Let me Google that for you: 3000 yen in usd [lmgtfy.com]
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But why buy from the store? If you attend the concerts, you can usually buy every album you want at a discount, with no retailer involved.
For less well known bands (i.e. not U2 and Def Leppard) the amount you save by purchasing albums at the show can cover the entire ticket price.
Re: (Score:3, Interesting)
The small artists I see seem to charge more for their CDs at a show than it would cost me to get them from Amazon.
For instance, I saw Zeromancer [www.last.fm] a couple of weeks ago. They wanted £14 (or more? can't really remember) for their latest album, but it's available for £9.25 on Amazon marketplace. Admittedly, that's from the USA, but I don't mind waiting a couple of weeks for CDs to arrive.
I'd like to support local independent record stores, my favourite is Resurrection Records [resurrectionmusic.com] in Camden, London, sinc
Go away, you're not 21 (Score:2)
If you attend the concerts
A lot of bands play in bars and in other venues that are legally classified as bars [itstheparty.com], shutting out their fans under age 21. By the time a fan is old enough to attend a concert, the band will likely have broken up.
Re: (Score:3, Interesting)
why the devs / publisher's LOVE online distro (Score:5, Insightful)
Online distro favors devs / publishers for several reasons:
The last is the huge one. Adobe and Microsoft have tried all kinds of tactics to supress consumers' ability to re-sell software. The game companies no doubt hate seeing used game transactions taking place without them getting a cut. With online distro, the re-sell market is crippled.
Seth
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Another one: it screws over the assholes at gamestop. There was some speculation that gamestop was trying to punish stardock for digital distribution. There's as of yet no evidence that I know of to suggest it. I wouldn't be surprised though, gamestop is fond of trying to annoy people into giving them money.
The game companies no doubt hate seeing used game transactions taking place without them getting a cut.
A bit of a tangent, but I just have to point out that many other goods are sold second hand, they only rarely result in direct profit for the original manufacturer, and that hasn't hurt those other in
Re: (Score:2)
Your forgot to include the troubles and issues of online distros:
1) You MUST support every single country's credit card. On the internet nobobody cares you are from USA or EU. They wanna play. And if you limit them, you pay the price of a pirated copy.
2) You MUST have 24x7x365 online access. No lunch breaks, no Christmas holidays, no bathroom breaks. Your time is NOT your time. You don't own it anymore. Even if you fail and go bankrupt you MUST provide access to your products. For instance i bought a huge n
Re: (Score:2)
You MUST support every single country's credit card.
What developed countries do payment processors such as PayPal and Google Checkout not support?
Localized problems are Global problems.
That's why you put eggs in more than one basket: host your downloads on multiple servers at multiple hosting companies.
You WILL be using a brand new mode of distribution: one that did not exist for 100 years.
The Internet is a packet telegraph network. Electrical telegraphy was commercialized in the 1840s.
You WILL pay for bandwidth.
Then design your product to use less bandwidth. If Nintendo can fit Super Mario Bros. into 40 KB, and .theprodukkt can fit .kkrieger [wikipedia.org] into 96 KB, think of what your team can do with 100,000 KB.
11 yr old kids don't have 49.99
Did you m
Re: (Score:2)
"4) You WILL be using a brand new mode of distribution: one that did not exist for 100 years. if you are shipping DVDs to Gamestop, you used a distribution that was tested over time, perfected over time, clockwork, covered under bank guarantees, etc. Not digital."
Let's see... Gamestop broke the Demigod street date last week. That's when it's even possible to FIND a new PC game there (good luck at the ones near me).
If Gamestop has this retail thing "perfected", its no wonder everybody wants to get away from
Re: (Score:3, Insightful)
This is a double-edged sword. They'll probably need to re-do their pricing structure, because many people who currently pay $60 for a game do so knowing they can get half of that expense back on the used market.
Re: (Score:2, Informative)
Ummm, do you realize that Counter Strike was originally a mod for Half-life?
No Thanks (Score:2, Insightful)
I liked Stardock before they went all Impulse crazy.
But now:
- Maybe the game wont activate in the future
- Who knows what kind of spyware is in Impulse
- No separately downloadable patches
I bought Sins but was rather unhappy when they switched the patching system to Impulse. So you could no longer play online (game versions must match between players) unless you installed their spyware.
No thanks, if I wanted Steam I'd go with Steam.
Is it so wrong to want to buy a truly DRM-free game?
On a DVD (which I can back
Re: (Score:2)
"Is it so wrong to want to buy a truly DRM-free game?
On a DVD (which I can backup), with no passwords/serials to forget/lose?"
The 82% piracy rate on Demigod last week that took down the entire server infrastructure would suggest that yes, there's a problem with that model. It's not terribly good at keeping the companies who make the games in business.
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Firewalls don't do a damn thing when you download and install a file.
They do when you block any network connection from a program not approved by you. Spyware could pipe its connections through the programs already on your system (e.g. wget); to block that, you can run each non-free application in a VM with no access to the Internet.
but if security is a concern, then stick with open source stuff you compile yourself.
Including the compiler [wikipedia.org]? Besides, what sort of open-source self-compiled platform fighting game replaces, say, Super Smash Bros. Brawl?
Game retailers are antiquated (Score:4, Interesting)
It's a highly inefficient operation in terms of getting a good return from the shelf space. It's taken up by giant empty boxes that don't do anything.
Here's an idea. Tear down these remaining stores and turn them into arcades with every game loaded on a server with terminals all around. You pay-for-play and if you decide it's something you'd enjoy pay for a copy on a USB stick. Now you have instant gratification and avoidance of downloading of 3 gigs of shit on Steam.
Game retailers .. antiquated - What is their Role? (Score:2)
This is actually not a bad idea. I walked into my local EBGames store to get a classic old fashioned Joystick to play X-Wing vs Tie fighter as my current computer doesnt have a MIDI port to pulg my old joystick into. Where they used to stock hardware like this there were a couple of racks of Wii Controller covers, DS and PSP "Skins" Bargin bins of empty boxes and shelves lined with more empty boxes and Collectible Card Games behind the counter.
The only Joystick they had was under a bargin bin out of sight
Re: (Score:2)
If you buy in a retail store, you can play the game now.
No; you have to wait days for shipping when the retail store has to special order the title you want.
Which electronics store (Score:2)
you'd have been better off asking at an electronics retailer, they have entire shelves of joysticks with unpacked ones placed on the top of the shelf so you can try them out before picking one.
I tried a Best Buy store in Fort Wayne, Indiana, and it had two PC game controllers on display: an Xbox 360 USB gamepad (compatible out of the box with Windows XP Service Pack 1 and newer, but apparently not Ubuntu Hardy) and a Logitech gamepad. Conspicuous by their absence were arcade-style PC joysticks.
Confusing Headline (Score:5, Insightful)
How is it that "Game Retailers" are hurting "Themselves".
Shouldn't the headline read "Online Game Distributors killing Game Retailers"?
I haven't seen any actions on the Game Retailers part that is hurting themselves except for existing. I suppose you could argue they should have become what steam is. But that's passively letting yourself die out.
Used game sales (Score:2)
With no more used game sales, the publishers can finally have everyone buy new copies and be rid of their number two complaint.
It'll be a slow transition, but we'll eventually see them discount games down to factor this in, right?
online retailers (Score:2)
Most of the games I buy are through online retailers. I prefer to own a physical copy. I don't like spending over 20 euros on something I cannot touch. (That, and I'm a sucker for collectors editions.) And I don't mind waiting a few days. Offline retailers usually suck, because it's a big mess. It's not easy to find stuff or browse through the whole collection.
Online is not really cheaper... (Score:4, Interesting)
I can get 1000 DVD pressed for 30p including art on the disk and a 4 page slick. 10000 is much cheaper since it can use the same master. Its not much more for a box. Postage is pretty cheap if your not using amazon pricing as a guide. Now for bulk distribution to shops, I would estimate that is cheaper to sell box sets that online copies.
Really the price of infrastructure is the killer here. If you could get away with average bandwidth rather than peak it wouldn't be so bad.
Re: (Score:3, Insightful)
You need a small lesson in Economics 101 my friends:
1) The cost of a product is NOT equal to its cost of manufacture, storage, shipping & profit. It is much more complex. For instance store display: Shelves are pricey. If you do not want your Game to be relegated to the corner, you better be prepared to give the Retailer a larger share of your take.
2) The cost of in-store advertising, banking costs (LoC, and other bank costs), add up to your margin; Seriously you are not thinking of shipping 100,000 cop
Re: (Score:3, Interesting)
I didn't add all these thing because they distract from the point and they exist on *both* sides of distribution as you said. Really We had full quotes including insurance, storage, legal (a big one) and cost of credit (we don't need much we have cash) but only door to door. Not to a shop. I was not much extra. Once you hit the 100000 copy mark things get cheaper per unit not higher.
And *lot* of extra cost too. First is the costs of SLA and associated legal fees, no to men
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Sorry. I didn't mean you were wrong. If i had implied it, am really sorry.
You seem to have gone through all the options and done a good deal of research.
That said, online distribution is more of a pain than DVDs. With physical media you have a proven, established, experienced network that works like clockwork.
With online like Steam or impulse, you entering a new world. Many things may go wrong which are not covered under SLA.
For instance Steam servers may m
Re: (Score:2)
Yes, hackers WILL hack your game to produce a hot rodded license file. That's the price you pay.
I agree completely. I only hope its gets popular enough for this to be something that could happen. I was only going to have a "cd-key" or as you suggested a downloaded keyfile. I really want to be able to ban cheaters. But tell lawyers that and they a little crazy.
Re:Online is not really cheaper... (Score:4, Insightful)
From time immemorial man has had the tendency to acquire for free if he could get away with it. .license file which embeds the user's email ID, hardware ID and a few random details is quite hard to break yet not too costly.
Stealing Electricity when it was introduced was a BIG problem. Big enough for many companies to die. Eventually it got straightened out.
Same was with Telegraph. The number of times codes changed in Telegraph is too numerous. Since telegraph companies charged by word, companies had exotic dictionaries with vast number of definitions for each word: Long sentences for single meaningless words.
So was it with Telephone. People still steal phone talk time through pranks, tapping, etc.
Internet stealing through WiFi...
You can't prevent stealing.
You can only control your own costs so that a stolen Game did NOT result in adding to your costs. Like DemiGod is doing now for Stardock.
A
No, DRM would not do it. Gamers get mad when their PCs are hacked legally.
If your Game is stolen, and exchanged for free in torrents, but it does NOT add to your running costs, forget worrying about it. What does not cost you, should not worry you.
Of course your lawyers will argue that each illegal install is money stolen from you: that's not entirely true. A 11-yr old kid may want to play, but does not have the money to buy it. He will somehow steal it. You can't get money from him. But you can bet that he will praise it to his friends, some of whom will buy it.
Other crowd is the earning well-to-do crowd. They will the latest. And they will yours.
Others are professional hackers. They thrive on challenge. They WILL crack the most hardest Games, even BioShock. You can't control them.
Some, like me, will buy out of loyalty, or will crack it if it can't be bought in my country, or play a hacked version to see if its Good and buy it to keep my PC free of Trojans. And yes, i buy every Game stardock makes: Why? NO DRM. I don't even play their Games. I just buy and that's it. I play Company of heroes ONLY. Not even Crysis. But i still buy Political Machine, Gal Civ II, DemiGod, etc. Why? NO DRM, plus i like Stardock.
Their support is cool and their CEO seems to have realized that DRM a la, BioShock hits them back.
Thier only slip up was online resources. This is where they pay costs.
If yours is not online gaming, then you are good to go.
People who steal your Game may buy, may not. But as long as they don't cost YOU in server time or resources, why worry?
Its a Business Risk. Much like CISCO doesn't care if clone copies of their routers are sold in China. Why? They don't incur costs on such cloned copies. So no worry.
Think about it, but consult with a lawyer. IANAL. So beware. I talk from my experience only.
Parent
The parent buys the game (Score:2)
A 11-yr old kid may want to play, but does not have the money to buy it.
In practice, you're saying:
A 11-yr old kid may want to play, but her 35-yr old mother does not have the money to buy it.
But why doesn't she?
Re: (Score:2)
Re: (Score:2)
I wonder whether it could be interesting to distribute via torrent. Instead of putting the game on a server you'd put the torrent file there and run a private tracker. Those of your customers who are prepared to seed at least twice the download size would get a small compensation - maybe a slightly reduced price, access to a mini game, or an additional level for the game.
That'd be great. But what about the rest of us who don't have 100gb/s connections? And this is aside from the fact that torrents are always (in my experience) shit slow.
I could purchase online (Score:2)
But I don't. I am in Australia and I have a 12GB/month download cap (after the 12GB my speed is slowed/shaped/capped/whatever to 56k). I am not gonna use up all my bandwidth downloading ONE game. This is aside from the fact that it'd take me longer to download than drive to the store and grab the boxed copy. Maybe we're behind the rest of the world in AU (I dunno), but at this point in time I sure aint in hell gonna download something as big as a game (or Fedora... except that my ISP mirrors Fedora and it's
Re:communism = forced economy (Score:5, Informative)
Parent
Re: (Score:2)
Government as referee is different from government as boss.
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Well, the person they're interviewing is in fact a representative of the Demigod company, so of course they're going to ask him about it.
Also, they took responsibility for the pirates hampering the game for the legit users... but didn't exactly say that the server problems weren't the fault of the pirates. They said that they shouldn't have configured their game so that the large number of pirate copies (which they say they should have anticipated) affected the gameplay experience of the paying customers.
In
Re: (Score:2)
Hmm. They obviously didn't account for the actual load; I had thought it was due to failing to account for piracy, but now that you mention it, I suppose 100,000 legitimate copies is not an unreasonable number for the opening month of a new game (although probably far higher than what they actually expected). Having that load arrive earlier than the game's actual street date probably didn't help matters, either.
I guess my point is that it's not hard to imagine that the architecture they had *would* have han