| The_Liquid_Laser said: All retailers are going to drop console hardware. Either that or the price will have to rise. Currently there is no profit in console hardware for retailers. Retailers benefit from selling games. Cards are a stopgap and not a permanent solution. The money for retailers is in actual physical games. If physical games go, then so do consoles. Either that or the hardware has to reach PC prices so that retailers can make a profit. Really, every champion of the "all digital future" has not really thought through the consequences. It may sound great from a convenience perspective, but retailers do not benefit from an "all digital future". They aren't going to just mindlessly do what Sony wants either. Walmart and Amazon could eat Sony for breakfast. They need to make a profit in order to sell hardware. With physical games it's not an issue because retailers make money on the games. But in the "all digital future" retailers aren't making money from the games anymore. The whole reason Sony is seeing an increase in revenue from digital sales is that they are taking sales away from the retailers. Sony is competing with their own partners. Retailers are not going to accept this. At a certain point, hardware will either need a price increase or the retailers just won't sell it. Of course, Microsoft will be just fine. Even without consoles Microsoft can still deliver Gamepass through other platforms. Or maybe people use Steam more. That benefits Microsoft too, because people will buy more PCs. Either way Microsoft wins. Microsoft has been pushing hard for an all digital future for a long time now, and it should be clear why. In an all digital future, Microsoft wins. |
Yeah neither of those things will happen. Of course there is profit it's just razor thin margins- typically 3-5%. It's all about getting people into their store, or in the case of Amazon clicking on their site. Once they have you in, you might buy something with a much higher margin. If they don't have you in, that's a lost customer. The buzz surrounding a new product launch can generate an enormous amount of foot traffic or views. If the retailer is specialized (gaming), they would actually stand to hurt their business even more, by dropping the product that draws traffic in favour of only stocking products with higher margins and lose those potential customers to places that will stock it. If they don't innovate they die.
They will accept it and if necessary change their business. There's a huge number of electronics products that are sold on razor thin margins- including phones and TV's. I think you're largely basing your ideas on the core gaming business'- like Gamestop and Game etc. They will either adapt or die out. Specialized retailers are the most vulnerable to market changes - see Blockbuster or Tower Records.
I presume you think Sony won't adopt a services approach? They won't see the writing on the wall and miss the train?
