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As store closures mount up, is there hope left for physical games outlets?

Forums - Gaming Discussion - As store closures mount up, is there hope left for physical games outlets?

DreadPirateRoberts said:
The_Liquid_Laser said:
Not sure how quickly game shops will disappear, if ever. All I know is that if they do, then it is basically the end of the game industry. Expect another crash like the one in '83 if they manage to eliminate the physical shops. The current model very much relies on having enough physical media so that shops will sell hardware too.

The crash of 83 was largely brought about by the overabundance of low quality games and hardware rapidly eroding consumer confidence.   If the consumer increasingly chooses digital over physical, then you won't see the critical reason for the failure 35 years ago.   In fact, the industry today seems almost immune to the primary causes of the 1983 crash since storefronts - especially Steam, but also the consoles - are littered with low quality crap.  The gold can still shine through, however.  Though, perhaps you could consider the Fallout 76 disaster to be a rough equivalent to the Atari 2600 Pac Man port fiasco.  The consumer loses confidence when even trusted and popular names release horribly awful products.  

And, much as I despise it, an all-digital era is coming.  PC gaming is practically all digital already, and with Microsoft about to offer a disc-less option, I think there is a real chance they choose to go all digital for the XBox gen 4.  It'll be only a matter of time until Sony (PS6?) and Nintendo (Switch successor) follow.  The latter two perhaps only staying physical longer because of their strong positions in Japan. 

There's just too much pure profit for the devs and the console makers in the digital landscape for them not to be pushing hard for it.  Especially since first sale doctrine goes out the window.

Fallout 76 is a great example of how in a digital landscape this would never of happen. There is no reason to pre-order a game unless you felt inclined to support a developer regardless of how the final product turns out.  If your not sure about the quality of the game or you've somehow been living under a rock and got caught off guard by Fallout 76 potential for having issues at launch. You can get same day review and impression from streamers, media outlets & every other online source dishing out ton of information before or on the same day of release. Fallout 76 disaster is entirely on ill informed consumers that choose to support Bethesda without doing there due diligence. Any whining about wanting a refund for having pre-ordered or bought the game at launch should just live with the consequences of their poor decisions. 

Except for those that pre-order the massive collectors edition that was clear false advertising and Bethesda response of $5 in game currency is a slap to the face. I don't think this kind of situation will ever be allowed to happen again, consumers have learned their lesson and can send the message to big corporation like we did for micro transaction with Battlefront 2, NBA 2k18,  Destiny 2 & Shadow of War.

Update: https://kotaku.com/bethesda-is-sending-out-replacements-for-fallout-76s-n-1830833935 
Now all they have to do is fix the game and somehow still provide more content to keep their skrinking player base, happy. 

Last edited by yvanjean - 4 days ago

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Shadow1980 said:
Farsala said:
Gamestop insisted on price gouging customers for used games

I've never understood the outrage over this. Every place that deals in used media does this. Getting a pittance for your used goods has always been the norm for everything, not just video games. It's the cost of dealing with a middle man. They have to resell that used merchandise for a profit, and in Gamestop's case the fact that new video games are a relatively low-margin product means that it makes sense that GameStop isn't paying you $45 for the $60 game you just bought. You want a good return on your used wares? Then take the effort to sell it to the new end-user yourself.

???

I am just saying why Gamestop lost business. Of course when they told me the price they were going to give me, I took my business elsewhere. Of course when I saw the price of their used games, I took my business elsewhere. Many people thought the same, and felt Gamestop wasn't worth their time. The other middle man/ men simply offer much better prices.



yvanjean said:
The_Liquid_Laser said:
Not sure how quickly game shops will disappear, if ever. All I know is that if they do, then it is basically the end of the game industry. Expect another crash like the one in '83 if they manage to eliminate the physical shops. The current model very much relies on having enough physical media so that shops will sell hardware too.

What kind of I'll informed statement is this?!? How does the brick and mortar bring any value to the game industry if any thing it make the cost of game higher and cut in developers profit. If these store shut down there are plenty of avenues to sell the hardware, groceries outlet, Big retailers (Costco,Walmart,Target), pharmacies & this little known online retailer called Amazon.

Just look at today announcement from Epic games, This will increase the revenues for developers and lower the amount of games that must be sold in order to turn a profit. This should increase the amount of developers that can make a niche game for smaller audiences and without having to worry if the game will make or break them.

Brick and Mortar allows hardware to be cheap, because brick and mortar makes their profits on software.  That means they are ok selling hardware at roughly cost.  Without brick and mortar, then hardware will need to be sold at costs similar to a PC.

Also brick and mortar specialty stores like Gamestop provide very effective and efficient marketing.  That cannot be underestimated.

DreadPirateRoberts said:
The_Liquid_Laser said:
Not sure how quickly game shops will disappear, if ever. All I know is that if they do, then it is basically the end of the game industry. Expect another crash like the one in '83 if they manage to eliminate the physical shops. The current model very much relies on having enough physical media so that shops will sell hardware too.

The crash of 83 was largely brought about by the overabundance of low quality games and hardware rapidly eroding consumer confidence.   If the consumer increasingly chooses digital over physical, then you won't see the critical reason for the failure 35 years ago.   In fact, the industry today seems almost immune to the primary causes of the 1983 crash since storefronts - especially Steam, but also the consoles - are littered with low quality crap.  The gold can still shine through, however.  Though, perhaps you could consider the Fallout 76 disaster to be a rough equivalent to the Atari 2600 Pac Man port fiasco.  The consumer loses confidence when even trusted and popular names release horribly awful products.  

And, much as I despise it, an all-digital era is coming.  PC gaming is practically all digital already, and with Microsoft about to offer a disc-less option, I think there is a real chance they choose to go all digital for the XBox gen 4.  It'll be only a matter of time until Sony (PS6?) and Nintendo (Switch successor) follow.  The latter two perhaps only staying physical longer because of their strong positions in Japan. 

There's just too much pure profit for the devs and the console makers in the digital landscape for them not to be pushing hard for it.  Especially since first sale doctrine goes out the window.

It's very possible for a second crash to be caused by a completely different reason.



yvanjean - Funny you should mention the Battlefront microtransaction issue. Because I really think that really only underscored how capricious the consumer can be. There's so many other games that are dominated by microtransactions and pay to win mechanics that consumers happily consume. Most notably, EA's FUT/HUT cards. And I think - depending on just what the EU does and how hard it cripples things - that is where you'll see publishers focusing their pre-order efforts. Alternatively, we'll likely see more cynical use of sites like Kickstarter, such as Sony did with Shenmue III.



The_Liquid_Laser said:

Brick and Mortar allows hardware to be cheap, because brick and mortar makes their profits on software.  That means they are ok selling hardware at roughly cost.  Without brick and mortar, then hardware will need to be sold at costs similar to a PC.

Also brick and mortar specialty stores like Gamestop provide very effective and efficient marketing.  That cannot be underestimated.

Brick and mortar stores will make a profit on both hardware and games.  Gamestop and Best Buy don't subsidize the cost of consoles to sell them - Sony, Nintendo and Microsoft do.  Though, obviously, they will make more on software both because the margins are larger and because of much larger overall unit sales.  

Everything you claim brick and mortar does is actually what the console makers do.  Sony and Microsoft especially have traditionally subsidized early console sales because they want their systems in the hands of as many customers as possible.  And that is because software drives their own revenues.  So no, the loss of brick and mortar games stores will not force console prices to rise at all.

As far as your "other reasons can cause a crash like 83" comment goes, that's basically meaningless argumentation.  You tried to tie the disappearance of physical storefronts directly to what happened in 1983.  There's no indication that is likely.  In fact, there is no indication that any crash is likely given the gaming industry continues to grow even as companies like Gamestop drown in red ink. 



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Brick and Mortar stores will always be around, some shops will close but others will open.


Physical games will still be around though but digital is gonna get bigger in the future.

    

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GameStop and other retailers can survive, but they're going to have to significantly decrease their footprint. I don't know what's GameStop's debt load will allow them to do that. But, if they can right-size, they'll be fine. Physical game sales are not going away anytime soon, especially when you consider the 40 years of gaming that has already taken place and is almost all physical. There will be a market for those games forever.

Shadow1980 said:
Farsala said:
Gamestop insisted on price gouging customers for used games

I've never understood the outrage over this. Every place that deals in used media does this. Getting a pittance for your used goods has always been the norm for everything, not just video games. It's the cost of dealing with a middle man. They have to resell that used merchandise for a profit, and in Gamestop's case the fact that new video games are a relatively low-margin product means that it makes sense that GameStop isn't paying you $45 for the $60 game you just bought. You want a good return on your used wares? Then take the effort to sell it to the new end-user yourself.

Very well said.  With the way some people talk about them, I'd swear GameStop must be putting guns to their heads and forcing them to buy and sell with them. 



Ka-pi96 said:
Ya know people always blame digital games for the decline of game stores, but I'd argue that them being shit is just as much, if not more, the reason for their decline. Especially relevant when Game is used as one of the examples. They used to be good, but have gotten progressively more shitty over the years. In store sales declined at the same time. I don't think that's just a coincidence.

You ever see a small business game store? Like not Gamestop or GAME, but just a little store or small chain of stores run by a passionate gamer that decided to start a business of it? I have quite a few in my area, and from what I've seen, none of them have gone under. Moved, in one case, but never gone out of business. They're always such better places than Gamestops. They usually have a collection of rare, retro games dating back at least to the 3rd generation if not earlier, plenty of used games at fair prices (usually based off of an average of what it goes for online, in my experience), and cool events, like when one near my old college worked with the college's video game club to host a gaming marathon charity event. They hang on because they're just better stores. Or because they set up near colleges with tons of gamers for a steady customer base, take your pick, but at the very least, I feel good supporting them, and enjoy shopping there more. If Gamestop went bankrupt, I'd be upset mostly because I don't like to shop at Walmart and Target for games. If those small business game stores died out, I'd be genuinely sad and mourn them.



Gamestop will probably have to reduce the number of stores by a good amount.