The digital business model was always going to be a sore point for GameStop which relies heavily on the sale of physical games. GameStop’s company’s president, Tony Bartel, has spoken about his fears that digital titles could become too cheap and deter consumers from buying the games at retail. Here’s what Bartel had to say.
“We want to help ensure that our industry does not make the same mistake as other entertainment categories by driving the perceived value of digital goods significantly below that of a physical game. When the free digital token programs end, we believe that the industry will need to work together to continue to price goods in a way that sustains profitability and encourages a great innovation that this category needs.”
Bartel also said that recent research indicated that the average price a consumer pays for a full, AAA game download is $22. When asked what price consumers expected to pay for a full game digital download, they said approximately $35.
Digital purchasing has seem a massive boom over recent years with consumers opting to purchase their games direct from their console rather than purchasing them from stores, due to convenience. Nintendo of America president Reggie Fils-Aime says that the majority of software sales for Nintendo are physical copies especially for those game which have a large file size like Bayonetta 2. Interestingly, Fils-Aime pointed out that Super Smash Bros on the Nintendo 3DS had extremely high digital sales presumably due to its small file size. Here’s what Reggis Fils-Aime had to say.
“Retail still is the majority of the business for us. But what’s interesting is, game by game and at different points in time, you see a different consumer reaction. Smash Bros. for 3DS, consumers wanted that game immediately. They didn’t even want to spend the time to get in their car and drive to retail to get it, so our digital percent for that game is quite high — about 20 percent of the games sold here in the U.S. were digital, which is a pretty significant piece. Compare that to Bayonetta 2. That’s a huge game, and could take up a large part of the memory in the 32-gig Wii U. That’s a game with a digital percent on the lower side, today about 10 percent or so. Our mentality is, we want the consumer to have the choice based on what makes sense for you, what makes sense for the type of game it is.”
The NPD’s Core Gaming 2014 report reveals that around 75 percent of gamers surveyed in the United States prefer physical copies of their games, rather than digital. People are starting to embrace digital titles, as the report shows that digital acceptance is up five percent over last year.
Nintendo president Satoru Iwata has tried to explain to investors why its digital offering aren’t cheaper than fully fledged retail copies. Iwata says that as the content is exactly the same as what is offered in a retail version of a game then there should be no reduction taken into account. Iwata says that he ultimately doesn’t want to devalue software.
“Although the mainstream idea regarding the digital business in the industry before we actually started selling software in both digital and packaged formats last year was that the digital version should or must be priced lower than its packaged counterpart, we decided that, since the contents are the same, the company would offer the software at the same price, be it the packaged version or the digital version. This is because we want consumers to value software as highly as possible and because we have been trying to heighten the value of our software whenever we produce it.”
The digital version of LEGO City Undercover requires a whopping 22GB of space, according to reports. Of course, if you own a Wii U Basic Set, which has approximately 3GB available for data storage and downloads, you need an external hard drive to download the game. If you are a Wii U Deluxe Set owner and want to download the game, you may also want to invest in an external hard drive, as that bundle has about 25GB for data storage and downloads, which means you’ll have approximately 3GB of memory after downloading LEGO City Undercover.
Capcom have prepared an extensive survey for its digital range of games which asks consumers just what they want Capcom to release next on digital platforms. So, if you’re after a new Mega Man, or a Resident Evil game for the Nintendo 3DS fill out the survey and send them your suggestions.
EA Games executive vice president Patrick Soderlund has assured CVG that traditional boxed retail games are going the way of the Dodo bird. Soderlund says that digital distribution is accelerating at an unprecedented rate, and that the next-generation of gamers genuinely won’t care about boxed retail games.
“We know that packaged goods work today, and the majority of our current revenue comes from that. That’s still a viable business model. But in the long term we’ll see more and more people gravitate to downloaded content.”
“I think it’s going to be sooner than people think [for boxed retail to die]. I think it’s going to be sooner than ten years.”
“I happen to think that there’s something about physical content, like books, that’s collectable and satisfying to own.”
“I still want physical content but I’m not part of the new generation of gamers. I remember a time when I bought a cartridge and excitedly read the manual on my way home, imagining what the game was going to be like. Maybe kids don’t have that anymore.”
“The distribution method won’t change how games are advertised or marketed, just how they are delivered to customers. My 96 year-old grandmother plays Cut the Rope and World of Warcraft. Honestly I don’t think there’s a digital barrier for the causal audience any more.”