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Forums - Gaming - Why a digital distribution console is bound to fail.

BHR-3 on 01 March 2009

i don't like it either hope in never gets big

i like have the box and the manual to hold and look at

i don't want to wait hrs to get the game possibly overheating my system or pay extra for a faster internet services

also upgrading the HDD just b/c the DD games took up all the space



                                                             

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welshbloke on 01 March 2009

Like it or not digital distribution is here and it is here to stay. That does not mean that next gen we will only have digital distribution but we will see a lot more offered via this medium and likewise we will see a lot more consumers opting for it and demanding it.

We are already seeing the trend in Music, Films, TV and already Games. Steam pilots it for the PC world, Microsoft/Sony for the Console world and BT Vision for the IPTV world.

I think you really meant to post, the next generation will not be Downloadable content only. To which I agree.



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S.T.A.G.E. on 01 March 2009
scottie said:

I've ended up saying this in quite a few threads, so I'm creating this thread to discuss the main reason digital distribution will not be implemented next gen.

 

Retailers would not like it. This is the reason.

Why do Retailers sell Ipods? Second of all, Microsoft is getting into the retail business by making their own store.

Elaborating further, we can assume that by the end of their life a console will have an attach rate of 10. This represents perhaps $100 - $150 (figure pulled out of thin air. Does anyone actually know how much the retailer makes per game?) in profits for the retailer. Add in that they deal in used games, and probably make somewhat closer to $200 profit on games for each console.

Accessories & Xbox Live cards. The beauty of Xbox Live is that alot of people love the experience and retailers love when they come back either every 3 months or annually.

Note that I am making the assumption that a person buys all their games from the place where they buy the console. For large numbers of people this approximation is valid.

 

Therefore, retailers will only sell a digital distribution only console for $200 more than they otherwise would have.

If games go DD, Gamestop (Barnes & Noble) will find a way to make profit off of it.

And there are perhaps other considerations, about which we usually do not consider. It is quite possible that Sony and MS have a special deal with shipping companies where they get a special price on shipping consoles but pay extra to ship games. This would no longer be possible, and thus prices would increase more.

Sony and Microsoft do things their own way, so lets keep it that way for the sake of competition. If Microsoft can ditch shipping fees and pay the proper price for shipping consoles then there is nothing to fear but profit.

The only way we can get to digital distribution is by all the console makers making the transition over a number of generations. Wiiware/PSN/XBLA will become more important over the generations and slowly it'll become more possible to kill of retail games

We're only talking about XBL if we're talking about digital distribution. Sony has nothing to do with it because they have this old an repetitive act where they try to force the next platform through the videogame systems since they cannot do it to the normal DVD market. DD for games would also increase the internal value of XBL. DD is where we are headed, so whats the problem with that really? If you want the future...well that is it. We already know that Nintendo will follow whatever sells. Nintendo has no problem with switching formats. They do it every gen, but they don't need to manipulate mass market to do it like Sony.

Thoughts?

 

 



Alterego-X on 01 March 2009

I doubt that all retailers would see its long-term effect, maybe a few of them would try to boycott it, but if there is big demand for it, most of them would simply sell it.


As they do with current gen consoles. There is DD for them, but the retailers didn't even think about calculating their loss, and selling the consoles that more expensive.



S.T.A.G.E. on 01 March 2009
S.T.A.G.E. said:
scottie said:

I've ended up saying this in quite a few threads, so I'm creating this thread to discuss the main reason digital distribution will not be implemented next gen.

 

Retailers would not like it. This is the reason.

Why do Retailers sell Ipods? Second of all, Microsoft is getting into the retail business by making their own store. Why don't the retailers create digital purchasing portals where you can purchase the games to your account from their stores. Sprint has a  digital downloads portal in their stores so consumers can buy songs for their new or old cellphones.

Elaborating further, we can assume that by the end of their life a console will have an attach rate of 10. This represents perhaps $100 - $150 (figure pulled out of thin air. Does anyone actually know how much the retailer makes per game?) in profits for the retailer. Add in that they deal in used games, and probably make somewhat closer to $200 profit on games for each console.

Accessories & Xbox Live cards. The beauty of Xbox Live is that alot of people love the experience and retailers love when they come back either every 3 months or annually.

Note that I am making the assumption that a person buys all their games from the place where they buy the console. For large numbers of people this approximation is valid.

 

Therefore, retailers will only sell a digital distribution only console for $200 more than they otherwise would have.

If games go DD, Gamestop (Barnes & Noble) will find a way to make profit off of it.

And there are perhaps other considerations, about which we usually do not consider. It is quite possible that Sony and MS have a special deal with shipping companies where they get a special price on shipping consoles but pay extra to ship games. This would no longer be possible, and thus prices would increase more.

Sony and Microsoft do things their own way, so lets keep it that way for the sake of competition. If Microsoft can ditch shipping fees and pay the proper price for shipping consoles then there is nothing to fear but profit.

The only way we can get to digital distribution is by all the console makers making the transition over a number of generations. Wiiware/PSN/XBLA will become more important over the generations and slowly it'll become more possible to kill of retail games

We're only talking about XBL if we're talking about digital distribution. Sony has nothing to do with it because they have this old an repetitive act where they try to force the next platform through the videogame systems since they cannot do it to the normal DVD market. DD for games would also increase the internal value of XBL. DD is where we are headed, so whats the problem with that really? If you want the future...well that is it. We already know that Nintendo will follow whatever sells. Nintendo has no problem with switching formats. They do it every gen, but they don't need to manipulate mass market to do it like Sony.

Thoughts?

 

 

 

 



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bugrimmar on 01 March 2009

complete digital distribution is never going to work.

you have the 360 with 28 million user base, but only around 15 million LIVE accounts (or more, i'm not sure but it's nowhere near the user base). the same goes with PSN, and their number is far more bloated because their service is free.

in short, there are millions of people who:

1.) aren't hooked up to the net yet.
2.) don't have a fast enough internet to download big stuff.
3.) are far too used to physical media and like to collect the box.

if a company decides to make their console as only digital distribution enabled, they will not be selling to these millions. it will be a major loss to them.



S.T.A.G.E. on 01 March 2009
bugrimmar said:
complete digital distribution is never going to work.

you have the 360 with 28 million user base, but only around 15 million LIVE accounts (or more, i'm not sure but it's nowhere near the user base). the same goes with PSN, and their number is far more bloated because their service is free.

in short, there are millions of people who:

1.) aren't hooked up to the net yet.
2.) don't have a fast enough internet to download big stuff.
3.) are far too used to physical media and like to collect the box.

if a company decides to make their console as only digital distribution enabled, they will not be selling to these millions. it will be a major loss to them.

This makes sense, however look at what is going on with Digital TV's in America. The government enforcing everyone to change to digital tv's or accept a coupon for a reciever. Don't you think this is giving a huge sales boost to companies like Sony, Samsung, Sharp and even Insignia (lolz), etc, etc? If the same were true for internet, then what would you say?

 



jpespinal on 01 March 2009

why digital distribution is the future:

cut back on sales of preowned games = more games bought retail price
no more spending money on fabricating: game discs, game manuals, game cases. no more $$ spent on transporting them to stores = "green" for the environment.
games distributed online will be cheaper, it has been said that games would then be sold at $39.99 - $49.99 gamers would certainly appreciate that.

too much money to be saved... gamestop will have to stick to selling consoles/accesories psn/xbl cards...




bugrimmar on 01 March 2009
S.T.A.G.E. said:
bugrimmar said:
complete digital distribution is never going to work.

you have the 360 with 28 million user base, but only around 15 million LIVE accounts (or more, i'm not sure but it's nowhere near the user base). the same goes with PSN, and their number is far more bloated because their service is free.

in short, there are millions of people who:

1.) aren't hooked up to the net yet.
2.) don't have a fast enough internet to download big stuff.
3.) are far too used to physical media and like to collect the box.

if a company decides to make their console as only digital distribution enabled, they will not be selling to these millions. it will be a major loss to them.

This makes sense, however look at what is going on with Digital TV's in America. The government enforcing everyone to change to digital tv's or accept a coupon for a reciever. Don't you think this is giving a huge sales boost to companies like Sony, Samsung, Sharp and even Insignia (lolz), etc, etc? If the same were true for internet, then what would you say?

 

i would say great for digital distribution.

but the reality is, the world is very, very, very, very far away from getting full connectivity. like where i live, internet is extremely costly and even the highest plans are too slow.

 



bugrimmar on 01 March 2009

i would say we're at least two generations away from total digital distribution on consoles. maybe by 2020 or so, it would be very attractive. but as of now and the next generation (which is rumored to come out by 2011), the internet still hasn't permeated a large percentage of consumers yet.