greenmedic88 said: So why are they even on retail shelves to begin with? Simple: visibility. Not everyone is online. Not everyone is savvy enough to be able to find their games online, even with services such as Steam available (pre-installed on HP computers, so no excuses there for HP owners, not that Steam has an all encompassing catalog of games). I dissagree. Games are retail shelves because simply that is the way it has always been done. NES, Genesis, and SNES were made in a time when there was no internet. As such, the only way to sell games was in a retail store. Dreamcast, N64, Playstation 1 were made in a time with dial up. As such, downloading games would take too long for the consumer and hard drive space was extremely limited anyway. The xbox and PS2 were the first to give the network experience a try. But with broadband access limited and difficulty connecting, manufactuers were leary to give up retail space due to turning away customers that were limited by the above. This is the first generation were games are available at download only. Due to the fact that not everyone has a connection fast enough and hard drive space will still be limited with large games such as MGS4 not every game will go digital only. But this will be the avenue of the future. The games are on shelves because that's how the majority of the game buying consumer base shops. There's a reason why retailers like Walmart and Best Buy sell the volumes of games that they do. Even with the current availability of download game services, the vast majority of sales are still made through physical media. Steam only generates about 25% of Valve's sales. The rest are disc media. But this is not a static figure; expect to see more revenue generated through download services as time goes on. Expect to see more titles made available via download proportionally. Why sell downloads at the same price as physical media? Exactly for the reason stated previously: undercut MSRP prices enough to make downloads the preferred method of buying over brick and mortar retailers and they will cut back their orders in proportion to the percentage of sales they lose to cheaper download purchases. In extreme cases, they could decline to stock the game at all if sell volume was cut low enough to not make it worthwhile. Otherwise, their only market becomes those without net access (increasingly rare) or those who won't surrender physical media until you pry it from their cold dead hands. If you sell a game online directly to the consumer at $35 instead of in a store at $40 you will make more money on the $35 revenue. The stores will do their own analysis if they will make games or not. And several stores choose not to stock certain games anyway. As a hardcore gamer, there are several games that I've had to buy online because none of the stores around me have stocked them. If MGS4 sold online for $50 and $60 in the store, several stores would still stock the game. It's too big not too. The developer shouldn't be worried about which stores will stock the game. They need to be concerned about maximizing revenues. Downloading at lower rates might be the way to reach a broader audience then saying if this hits retail we'll have to sell it at $60. Of course downloads are more profitable than physical media. Even with a hypothetical $5 discount. No media production, print materials, packaging and shipping costs. That's a given. Unless you're suggesting that publishers should pass those savings directly to the consumer, the difference to them is increased profit margins (more than $5). And that means better sustainability for developers of lower selling titles, even if they deserved to go platinum based upon quality, but didn't due to the whims of the gaming public. What it sounds like you're saying is that downloads should automatically be cheaper because of the reduced cost to publishers. That wouldn't increase the availability or accessibility of downloads at all. It would still sell to the same net savvy audience with the sole question being "do I want the disk, box and manual for a $5 premium?" There's really no difference to the gamer once the game is up and running. So the $4-5 that would have gone to a retailer goes to the game developer or publisher instead. Does it really matter? $4-5 makes a huge difference to the consumer. We are talking 20-25% of the price of a budget game. Sure, they could probably release MGS4 for $65 and no one would give a flip because the game is supposed to be huge. $4-5 buys me a downloadable game. Consumers are extremely price sensitive. $4-5 times a game that sells 2 million is $8-10 million dollars that a developer is turning away. And like I said before, that is just the retailer take. There is an additional $2 in packaging the game, $15 publishing fee. Add those in the equation and you are talking about adding $40-50 million dollars of pure profit. I'm sure you could afford to sell 50,000 less to the people that simply won't buy without physical media. Companies are built on dollars and cents. I once worked for a company that was thrilled to get a $.07 discount on a good. There answer was we buy over 100,000 a year. Every little bit adds up in efficiency. Your argument seems to be that people won't pay for downloaded games because they're not being sold at a $5 (or 10% or any number) discount. That's under the presumption that the random $5 figure applies to all titles from $10 - $60. You're basically seeing things from the perspective of a brick and mortar retailer where buying in volume = higher wholesaler discounts. But wholesaler discounts don't apply to downloads since they're consumer purchased direct from the digital distributer. Bad for the wholesaler, bad for the retailer, but good for the publisher and presumably the developer if they receive a higher price per unit sold. Again, charging $50 for a download and the same $50 for a disc bought at a retail outlet means the same cost to the consumer (minus sales tax) who is not under the impression that the lack of a physical product means a discount should be given. They're not actually paying more for the download. Technically, without the sales tax, they are paying less, even without a digital distribution discount. Would a digital distribution discount be appreciated? Everyone loves a discount. Would it sell more units? Only at the expense of physical media, if at all. Eventually, ALL games will be available via download (even the 50GB MGS4s of the world once networks robust enough to handle the bandwidth become common), but there will still be a market for physical media as inefficient and wasteful as it can be. The only losers in that future are the GameStops and EB Games of the world. Maybe all games will be. I just think network speeds are storage space at the current levels put us quite a bit off. Plus I have to help my parents order off of Amazon of all places. Eventually all consumers will be open to the internet but we aren't there yet. The losers well also be the Walmarts, Meijers, and Targets. Any place that sells retail goods needs to find a way to get online or will watch their market share dwindle. Downloading standard 9GB DVD images is still impractical for the average connection. It will be some time before wide band speeds become the standard. Storage space on the other hand, is becoming less of an issue as the price of HDD real estate continues to drop at a substantial rate. But in terms of accessibility, again, downloads don't trump physical media although few who study industry trends in depth will argue this is going to be the case in the future. The question is not if, but when. As for the retail outlets; they'll have to find a way to either adapt or lose revenue when that time comes. Virtually all of the brick and mortar retail outlets (for games) have an online store as well. So long as those receive carry over traffic from the physical shops, they are potential outlets for selling downloaded files, music, books or games. | 
