Retailers Not Worried About Transition to Digital Content

Fri, Jan 29, 2010

Industry

Despite the popularity of online gaming content, whether that content is found on sites like Facebook and Pogo or through digital marketplaces via home gaming consoles, retailers are speaking out against said popularity, saying that it’s not affecting their own business as much as one might think.

The reasoning, says Shopto owner Igor Cipolletta (as reported by EDGE), is that the gaming industry simply isn’t fully prepared to go to an all-digital format. His support of this claim comes by way of the PSP Go, Sony’s newest PSP model, which relies only on downloads for content, and not discs. The system, which has a suggested retail price of $249, has been considered by many to be a resounding failure on the part of Sony, especially when comparing it to the PS3’s now similar price point of $299.

But it’s not just a price point that hurts the chance at a transition to all digital media, as the media distribution systems themselves share the blame. One particular example is Microsoft’s Games on Demand service on the Xbox 360, which prices downloads of complete games at prices that are similar to, or in most cases, much higher than what it would cost to buy a complete version of the same game at a brick and mortar outlet. Cipolletta acknowledges that gamers feel the options are overpriced, and what’s more, that sales are hurt simply because the downloaded games “cannot be traded in or sold once finished with.”

HMV’s spokesperson Gennaro Castaldo is a bit more open-minded about the eventuality of a digital-centric industry, and said that his company is doing everything necessary to prepare for such an outcome. “Like all parties in the games business, we know it’s gradually coming and are working on laying foundations to prepare for this. HMV recently acquired 50 per cent of digital services provider 7digital, which will give us greater understanding and expertise and will, hopefully, enable us to build a compelling platform that will also extend to games.”

But gamers, says Piers Harding-Rolls, gaming analyst for Screen Digest, have some time before they need be worried about their tangible collections become obsolete. “It’s going to be a slow transition. In terms of console-specific digital games, there’s been something of a retreat from the retail-equivalent downloads, and now most console download titles are made up of expansion packs and arcade download games. Spend on those types of products is increasingly strong, but it’s important to note that it’s nowhere near retail levels, with something like a single-digit percentage slice of the market. Certainly throughout 2009, digital distribution hasn’t had much impact on the sales of digital media.”

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