Games Retail Is Broken. Can Anything Be Done?

On one side, you’ve got publishers complaining about second-hand sales and the cost of making the AAA titles that the majority of game buyers slurp up in their millions. On the other, gamers unhappy about the inability to resell games that they feel they “own”, although that’s quickly becoming a rather vague concept. Change is in the wind in games retail, but what should the future of games retail actually look like?

[credit provider=”kss_cville” url=”http://www.flickr.com/photos/kspetz/393152017/” creator=”kss_cville”]

A couple of months ago I wrote a column over at Gizmodo looking at models for future TV production, and I’m pretty much using that as the base line for this particular feature. It may help to read the earlier column (I can’t make you, I guess) which is based around the premise that the traditional TV production model is one that needs radical reinvention, but nobody’s quite sure how that’s going to look.

Gaming is a slightly different creature, but only in part. We’ve seen over the last week — and may indeed get clarification this week at E3 — how Microsoft’s taking a fairly controversial stance on the “ownership” of games. Plenty of people are mighty annoyed by that, although quite how many will then switch to other consoles, PCs, pirating or whatnot is something of an open question. I’ve seen it argued that Microsoft very deliberately released its sour information pre-E3 so that it would be quickly overshadowed by all the shiny new games it’s going to reveal there.

Because, you know, Malibu Master Chief. Except this time, he’s got a new hat!

Still, Microsoft’s move to make the division between physical and digital goods even more nebulous does bring into light the fact that the games industry is in a period of intense change. The models that the industry relied on — physical products sold (or licensed) to consumers who could then re-sell them has been supplanted by everything from cheap iOS apps to free-to-play-with-hefty-IAP games to digital-only services such as Steam and XBLA. So which model will (or should) gaming ultimately adopt?

I’m not going to be arrogant enough to say that I know outright, because if I genuinely did, I’d be making the smart investments and sitting back waiting for the billions to roll in. But here’s some thinking points about each model that currently exists, and what it would mean for gaming if it became the new primary model. There’s nothing that says these models can’t co-exist, but in an industry that burns through talent, it’s likely that one model will predominate at a particular point in time. I’m throwing these out here as much as discussion points as anything else; you’re more than welcome to agree or disagree.

Physical/Digital Split

Over here, you’ve got your stacks of unsold Petz: Godzilla carts, and over there, your ethernet plugs…
Why it’s great:
In most respects, this is what we’ve got right now; you can buy full retail copies of games, or the digital download, whether it’s a disc for PC/Xbox/PS3/WiiU/3Ds or whatever. There’s a reasonable amount of choice and relatively few barriers to entry, depending on the platform you favour.
Why it could suck:
As we’ve seen with the Xbox One, the question of “ownership” becomes very muddy indeed, and that’s not good. Equally, from the publisher’s side, there’s a lot of risk in the physical product, because if it doesn’t sell, you’ve put even more money into your dud than if you’d just offered it up over a server. The existence of a dual model also makes it less likely that you’d see equal discounting between physical and digital copies, because publishers have to keep two different models afloat.

Physical Only:

Hey, let’s forget about this digital distribution thing, and just go back to games on carts, discs and holographic snails!

Why it’s great: A return to the “good old days” of physical distribution would solve the second-hand problem, because a game you can hold is a game you can sell to somebody else.
Why it could suck: Remember when stores would run out of copies? You’d see a whole lot more of that. Physical production costs add to games costs, and they’re a strong inhibitor for independent games development. How many indie Super Nintendo games were there? A physical copy is still a copy that can stop working due to physical defects to boot.


[credit provider=”Tim Sackton” url=”http://www.flickr.com/photos/43581314@N08/6924892853/” creator=”Tim Sackton”]

Digital Only, Single Store

I love the Apple iTunes store, and want a really convenient one-stop shop for my games!
Why it’s great: Apple (or for that matter, Valve) would love it if they became a one-stop-shop for all things digital. No running out of copies. No particular inhibition on indie games devs, who can sit side by side with Call Of Duty: Future Combat 27 (featuring Ya Kid K). One place to take your grievances with refunds and the like.

Why it could suck:
Gatekeeping can do a lot to keep the dross out, but not everything, and having a single arbiter of “gaming taste” is problematic. Within the purely Australian context, one of the ongoing challenges for digital distribution remains game ratings, and whether a global giant would even be interested in Australia’s smaller gaming market if it meant messy legal hoops remains to be seen. A single store would have no interest whatsoever in allowing second-hand sales, and if particularly dominant, the only pressure on sales remains from within, with developers seeking attention via sales. That’s less likely with a single point of contact for your game sales, however. An added issue for any digital-only play is the natural observation that it makes it harder to sell actual games hardware. If you want your Xbox 8, you may have to be ready to buy it online, sight unseen directly from Microsoft or its approved partners.

Digital Only, Many Stores

A digital shopping mall, full of the latest and greatest from MS, Sony and those great garbage truck simulator games!
Why it’s great:
You know why Steam is so particularly cheap right now? Because they have to be — you’ve got the choice to go to a number of other PC-based outlets for your digital gaming needs. A multiplicity of stores does (somewhat) bypass the issues of resale value, because they keep the cost of access generally quite low, so it’s less of a sting if you can’t trade in your games.

Why it could suck:
Fragmentation of the gaming base leads to either compromise (i.e terrible ports) or exclusives to a given platform, which means you might need a Playstation 7 in order to play Battlefield 33: Bob Morrison Strikes Back!. There’s not much of an impetus for those on the console/fixed platform side of games retail to allow multiple stores to flourish. Sure, Android has plenty of stores, but that’s inherent in the design, and Google by default blocks installation from “unknown” sources on security grounds. You’ve got to go down the jailbreak route for iOS devices, and while it may become possible to jailbreak Xboxes and Playstations in the future, the likely development picture for them is going to be on the small side.

The Indie Alternative

Screw the AAA shovelware, let’s all make games about floating rotating ocelots!
Why it’s great:
Some of the very best titles we’ve seen in recent years have been Indie titles, or at least from independent studios. Braid. Super Meat Boy. Fez. The big studios rely on their AAA titles as revenue streams, but they’re not always innovative. If we gave them the flick wholesale, we could have a whole lot of innovation, and a whole lot less of “Bland Brown Military Shooter 47 (with realistic waterboarding DLC!)”.
Why it could suck:
There are lots of indie games, and lots of indie dreck. While many (sometimes including myself) look back to the era of two-buck C64 tapes with fondness, the truth is that innovation invites risk, and the risk is that your game isn’t terribly good. Try going back ten to fifteen years in the development, of, say Madden games. They may only move slowly and incrementally, but they’re working off a very solid basis. After all, Codemasters started off as an indie… but you wouldn’t call them that now.

What do you reckon? Which way should games retail go so that it can survive as an industry and we can all keep playing the games we love?


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