The Future is Still Retail

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The Future is Still Retail

The era of digital distribution may be upon us, but retail won't ever go away.

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This isn't even accounting for internet speeds of connected consoles, as you touched on, in the quote below. Connected could be anything.

Some of those folks simply cannot reach broadband access from where their console is sitting.

When I first got on Xbox Live, the first thing I did was download Shivering Isles. That's the sole reason I got online in the first place, really.

Do you know how long it took to download with my internet at the time?

18 fucking hours. For 1 GB.

That was with DSL. Hard-wired.

I made the Xbox Live version of DOOM lag, with just 2 players.

Well, Shamus, while I agree with you, I must point out that your numbering goes 1, 2, 3, 3, 4.

Redingold:
Well, Shamus, while I agree with you, I must point out that your numbering goes 1, 2, 3, 3, 4.

Awesome. Complete mistake. Serves me right in an article where I argue with John Carmack.

Redingold:
Well, Shamus, while I agree with you, I must point out that your numbering goes 1, 2, 3, 3, 4.

He's not good with big words (as we learned for this weeks' encounter with Tycho). And apparently, not with numbers, either.

Shamus Young:
Experienced Points: The Future is Still Retail

The era of digital distribution may be upon us, but retail won't ever go away.

We're still waiting for the paperless office (predicted in 1975). Funny how offices seem to have even more paper now....

Onyx Oblivion:
This isn't even accounting for internet speeds of connected consoles, as you touched on, in the quote below. Connected could be anything.

Some of those folks simply cannot reach broadband access from where their console is sitting.

When I first got on Xbox Live, the first thing I did was download Shivering Isles. That's the sole reason I got online in the first place, really.

Do you know how long it took to download with my internet at the time?

18 fucking hours.

Hehe, I remember when I bought Mass Effect off of Steam.

Took me 2 months of on/off downloading for it to finally finish. If I let it download and not stop it(and if my internet stayed on throughout) then it would have taken 2 straight weeks of downloading.

Thats another thing with Digital Distribution. I'm curious to see how many people are willing to sit and wait for 10+ gigabytes of data to download. I don't care how fast your internet is, downloading that much data takes a long-ass time. It'd be faster to just go to the store and buy it.

Shamus Young:
Experienced Points: The Future is Still Retail

The era of digital distribution may be upon us, but retail won't ever go away.

Read Full Article

I think you have made good points why the Future may still CONTAIN retail, but not that it still IS retail.

As these corner cases become rarer (I don't think people who grow up completely wireless, and boxless will not have nearly the need to own the object itself) it will become harder for retailers to be cost efficient.

I guess, I find most of your arguments to be analogous to "Black and White TV is the future, because color tv costs more, and some people are Color blind."

The_root_of_all_evil:

Shamus Young:
Experienced Points: The Future is Still Retail

The era of digital distribution may be upon us, but retail won't ever go away.

We're still waiting for the paperless office (predicted in 1975). Funny how offices seem to have even more paper now....

I work in an office. I almost don't need to know how to WRITE because I use physical paper so rarely. Imagine all those e-mails you send each day, the online training manuals for your product, or the complex process of getting authenticated by an outside company for doing good business.

We may not have paperless offices now, but compared to the 1950s... we might as well.

Thank you Shamus for offering a well written piece for us Retail kids here. I don't own any Digital game yet. I prefer retail and a nice box art to go with it.

He forgot to mention also that as faster interent becomes cheaper and more people get it, games will become larger and take longer to download, requiring the newer and more expensive faster internet of the future to download in a reasonable time.

A few stores let you buy activation cards online.

archvile93:
He forgot to mention also that as faster interent becomes cheaper and more people get it, games will become larger and take longer to download, requiring the newer and more expensive faster internet of the future to download in a reasonable time.

This is not necessarily true. I mean, there are trends in both directions, that doesn't mean they are equal. Better Tech also means greater file compression. We've actually drastically decreased the growth of game size over the past 5 to 7 years compared to the 5 to 7 before it.

*applause*

Thank you, Shamus. Sometimes I feel like a crazy person when I say that retail isn't going anywhere for a long, long time.

One thing that wasn't in the article but that I find to be a factor:
A year or so ago I wanted to play Command and Conquer 3. Don't know why, but all of a sudden I did. I was going to the store anyway so I looked and I wasn't surprised to find that they didn't have it (stores never have PC games anymore). So I went home and bought it digitally. Only took 4-5 hours to download the damned thing, maybe more. And this was on Road Runner meep-meep fast and all that good stuff. And this is the convenient solution so I don't have to inconvenience myself with a 40-50 minute trip to the store and back when I want a game? Hahaha- no. Digital is the inconvenient option for the time being. And games are only getting bigger; Sony loves bragging about their high-capacity blu-ray discs for PS3 games. And they want to put these games on the Playstation Store too. Haha yeah okay. If somebody else wants to spend a day downloading a huge game, let them. I'll just take the trip to the store and be playing in about an hour.

Yes! Where I live, I don't have great internet. If I want to buy a game online, i'll have to find a place to take my console that has internet I can steal use.

I don't think it's just that they think it's better, but it's cheaper. It's just a matter of waiting for society to adjust to it slowly. I don't think it will happen tomorrow but saving money logistically reads a lot clearer on paper than the inconsistent irrationality of shoppers.

In all honesty all of those reasons but the last are either very solvable with the online services or "yeah nostalgia." My Grandpa told me that when colour tv's came about people came up with all sorts of reasons why black&white was better but in the end we are creatures uncomfortable with change and a lot of these reasons are rooted in that reason alone.

It just takes time. I could still go into a shop and buy a black & white TV in 2005. That's not a sign that those reasons were valid.

And the stats corroborate. DD is on the rise, it will come but inertia holds it back. Collectors (nostalgia personified) are hardly a major buying force

Hmmm, well the other issue here is what benefits this offers the consumer. All of these "smart" people think people are dumb and will mindlessly fall into line with whatever they say.

From the perspective of the game industry, digital distribution makes sense. After all it lets them cut out all the packaging and distribution, and pocket the money spent on such things as pure profit. Not to mention allowing them to maintain much tighter control of their product and cement their "your buying a liscence" position more than ever.

In general people buying anything want to have control over that product. With digital distribution there is no guarantee that the guys you bought a game from are still going to be in operation six months down the road, never mind ten years or more. If I'm an Octogenerian in a rest home decades from now, and I decide I want to play "Fallout: New Vegas" on my antique PC which I've preserved all this time, I'm probably out of luck because 40-50 years from now there is no guarantee Valve/Steam will still be in business. No matter how much of a juggernaut a business might seem right now, times change, and even the biggest collossus of the moment can fall from a few unlucky rolls of the dice, or various business deals. Consider for example what a massive Juggernaut "Origin Systems" was at one point, they no longer exist.

I think one of the reasons why PC gaming is having trouble is because of it's focus on going digital and using the internet for everything. Today even buying a disc is meaningless since the disc might just start a digital download process anyway. "Warhammer: Dawn Of War II", "Mount ahd Blade: Warband", "Fallout: New Vegas", and "Left 4 Dead 2" all being games that use this. Consoles on the other hand allow you to have all of the game data on the disc, and while there are efforts being made to require various kinds of internet check ins, so far your ownership of those games is safe (if you have a console, and the disc, you can play your game whether it be 5 minutes from now or 50 years from now).

Arguements about conveinence are kind of funny in this case, because people head out to the store regularly. Getting a game can be a special trip just for that, or it can be done alongside other things, like getting gas for your car, or groceries, or whatever else. In many cases game stores are right in the middle of shopping centers or malls.

The rhetoric about "Lol, your kids will laugh at you going to the store for games" is kind of ridiculous since I doubt shopping will ever end. If anything I think most of those kids will grow up, wanting to put their fists through monitors after being scammed and/or losing digital property, and wish they could have some way of guaranteeing access to what they paid money for in perpetuity.

As far as the Internet goes, I agree that people (especially on internet forums or in the industry) don't realize a lot of the issues involved there. The Internet is hardly socialized and when you consider the starting price is like $15 a month (and can be a lot more for a really high quality connection or a package that does a lot of things) that amounts to $180 a year and that can be a lot of money for people that are on a budget just for a service. A lot of people that are willing to drop a one time expense of like $200-$300 for a game console that is likely to remain supported for a number of years, are not going to be willing to pay for a service like that. I think people (especially those online) tend to overestimate the penetration of the internet and how many people are not online, and that includes all kinds of people including those who want to play games.

There are a lot of people who see digital distribution as paying (an ISP) for the right to pay someone else for a product they have no control over.

Truthfully if the gaming industry wants digital distribution, one of the very first things they are going to need to do is develop their own ISP-type services and network and provide that for free as part of the package for the consoles. If people don't have to pay for internet access then there is no reason not to put the consoles online, and that will more
or less guarantee the market. Of course this is not an easy, or paticularly practical, thing to do. Once you've got that infrastructure established then the next step is going to find some way to guarantee continued access to those virtual goods even in the case of the company's demise. I've been of the opinion that a very "Cyberpunk" type system where companies are required to form "Trusts" (as in trust funds) to maintain mainframes where
this data is stored. The basic idea is that the trusts being so large that they continue to grow on their own due to interest and that increasing wealth goes towards maintaining the hardware and paying the techs who work on it.

Honestly though, in the end digital distribution is just a cash grab. A method of increasing profits by cutting out the need to produce physical goods. Unlike promises made when Digital Distribution was first being promoted, the industry has no intention of using this to lower prices, but to pocket more money. If you've ever listened to industry comments in past decades you'd notice that the cost of packaging, manual printing, renting warehouses, hiring trucks to transport stuff (or even just using UPS) and similar things were massively expensive and used to justify the high price of games. You'll notice that you pay the same thing for a digital copy that you do for a physical one in most cases, which says a lot. I also think that the change in tone in what the industry says is responsible for the prices is because they are expecting the digital distribution thing to fly "any day now" and need to have reasons established for why the price to the consumer isn't going to lower along with the cost of producing the product.

Digitial distribution = End of game libraries

I'm not even that old, but I'm old enough to appreciate my atari and NES and Genesis games, even my classic PC games. If everything is digital or requires server activation/connection, then that's the end of re-playing your favorite games down the line. Enjoy trying to play your Assassin's Creed game in 10-20 years when the company takes those servers down, or has been purchased by another company, or has gone bankrupt

You forgot one Shamus

There is also those who wish to make sure their purchases can never be taken away from them. I mean heaven forbid Steam and Valve fail, but imagine if one day Valve was looking at bankruptcy and they had to pull the plug on Steam? You could end up losing a huge portion of your library and it might even get to the point where you could never get it back no matter how hard you tried. I love digital distribution and having games, movies, books and everything else just available on my computer, but if I REALLY care about something I tend to try to get a hard copy of it lest I find that one day I can't get to my library via a computer.

I asked the top industry analyst (UK) if GAME were going to majorly lose market share from digital distribution and he said not at all. Apparantly a lot of people just prefer to browse an actual shop then a website.

Even with Steam up and running I still go out to buy L4D and Civ 5. Why? I have space on my shelf that needs filled and 10101001010011111010100111 won't fill up a gap between The Orange Box and Star Wars: Empire at War

Nurb:
Digitial distribution = End of game libraries

I'm not even that old, but I'm old enough to appreciate my atari and NES and Genesis games, even my classic PC games. If everything is digital or requires server activation/connection, then that's the end of re-playing your favorite games down the line. Enjoy trying to play your Assassin's Creed game in 10-20 years when the company takes those servers down, or has been purchased by another company, or has gone bankrupt

I know, right? I mean, I love going back and playing the atari and pc games from when I was a kid. Wait, that isn't true at all, because I haven't managed to keep track of them this entire time. In fact, the latest trips down memory lane have all been via Good old Games or Steam. Did you know you can get EVERY COMMANDER KEEN GAME EVER for 5 dollars? All them, 5 bucks. Downloads in like 20 seconds. Or do you remember where you keep the 19 floppy drives that contain that data? Gosh, I hope they aren't scratched.

If Steam and Id can connive to bring back such an 'ancient' as that without any previous infrastructure, you don't think they'll have a way to keep it alive down the road?

Probably for the first time in my life, I'll have to disagree with Shamus more or less completely. All of the arguments presented in the article are Now arguments, which don't really come across as very "future-proof":
1. There will always be collectors. But how many? Most people will always go for a combination of cheap, familiar and convenient. Digital is already often much more convenient that retail, in most cases it's also cheaper, and the familiarity really is just a question public perception, which is a putty in the two hands of necessity (you want a game, but it doesn't have a retail) and persuasion (advertising).
2. Digital content can be shared, it's just a matter of platform and owner rules. PS3, for example, allows for up to 5 consoles to download content from a single account purchase. Let's not even get into GoG & GamersGate.
3. Completely subjective. How much different is a plastic card from a plastic disc? If you can put a game box with nothing but a plastic disc in it under a tree and consider it a present, a plastic card is barely half a step behind. Inputting serials is, again, a technicality.
4. (3.) I'll go out on a limb here and say that Steam THRIVES on flash discounts and the impulse purchases they create. And nobody gets frostbite or trampled.
5. (4.) Just a matter of time. I think it's pretty clear that people who can both a) afford a console / gaming PC and b) really can't get Internet are already a minority. If they just don't want to -- see point 1. Necessity and persuasion.

1.) I would have thought that collectors are too small of a minority to care about? What about all those LD collectors I don't think publishers/distributors would worry about such a small group.

2.) Pretty good point, but you could always get your friend to come over. Alternatively 10gigs to download a game to a friends computer/console won't be too much of an issue in 10 years time.

3.) I can't imagine kids complaining about getting what are essentially gift cards for Christmas. The grandma part makes sense, will be another 100 years when grandmas have worked out digital distribution.

3.) It's a bit difficult to stop impulse buying, but I know a lot of people who impulse buy on steam (5$ L4D2 anyone?).

4.) These percentages will only increase over time. Especially considering bandwidth prices continue to fall; but yes, there is always going to be a certain amount of people that don't want to hook their machine up to the internet for various reasons.

You only need to look at your local retailer to see how few CDs they stock, or try to find a store that sells only CDs, such a thing is limited to boutique stores. It's only a matter of time until the same thing happens with other forms of digital media. The Future is still Retail, for about 10 or so years.

Shamus Young:
The era of digital distribution may be upon us, but retail won't ever go away.

Interesting read as usual shamus. As soon as I figured out the beauty of digital distribution over the last couple years, I hopped on the "retail is dead" bandwagon myself. One thing I'm particularly interested in reading your take on is the trend towards boxed games requiring connection to digital distribution networks, a la the recent Civilization V.

Personally, removing the need to drive to the store has exponentially increased my impulse buys, and I appreciate it when Steam provides me with a popup about Machinarium being on mega sale. I am generally against DRM in principle, but the style of Steam, the speed of their servers, and the ability to digitally install on any computer-- even if I go to visit my brother for a week and he wants to try Portal-- really makes me a happy. Last, my favorite part of digital distribution networks, is streamlining of the official patch media. Mod service isn't quite there yet, but thats coming too. (if you havn't tried Minerva yet, look it up on steam).

On the other hand, a lot of the Civ grognards hurl profanity at the evil malware virus evil evil that Steam represents, and are offended at having to connect to this pitiful "service." I mean, I get it, but I tend to consider their viewpoint as just a little off the deep end.

I disagree, I'm a game collector, I don't need physical copies: for example I own every game on Battle.net, for the most part I took my Starcraft and Diablo CD-Keys and had to input them, but now I have digital copies I can download them anytime, anywhere there is a internet connection. Beats carrying around CDs/DVDs everywhere.

Go to account based system makes it even easier for visitors. Want to show off a new game to your friend at a friends house? Just login to your account. Game Consoles are almost there, OnLive makes it so you don't even have to download anything(besides <5mb client) to start playing.

Gift Giving, well it just going to be normal if everything is digital, plus some people are actually happier using card to pick out games then having someone buy them a bad game.

90% of my impulse buying comes from my browsing DLC and game libraries on XBL, so that argument is not one.

The digital divide in the US is getting smaller every day and if you can't have access to something, you learn to live without it. It not big enough to be a factor in a digital only.

Zechnophobe:

This is not necessarily true. I mean, there are trends in both directions, that doesn't mean they are equal. Better Tech also means greater file compression. We've actually drastically decreased the growth of game size over the past 5 to 7 years compared to the 5 to 7 before it.

Um no. System Shock 2 required 250 MBs of Hard Disk space, while 4 years later KOTOR required more than 4 GBs. That is roughly a 1600% increase.

I am willing to bet that the increase in Hard Disk space requirements of games has been logarithmic is scale. Compression or no.

Until you can compress stupidly large games like Dragon Age down to something more reasonable like 4 GB (or less) don't talk about compression because it is currently irrelevant.

The only one I can truly vouch for is point 4. As for the rest, I think it's sort of naive of you. I'm sure little Timmy will love getting 1500 MS points for Christmas. No difference between that and buying him a Best Buy gift card.

Zechnophobe:

Shamus Young:
Experienced Points: The Future is Still Retail

The era of digital distribution may be upon us, but retail won't ever go away.

Read Full Article

I think you have made good points why the Future may still CONTAIN retail, but not that it still IS retail.

As these corner cases become rarer (I don't think people who grow up completely wireless, and boxless will not have nearly the need to own the object itself) it will become harder for retailers to be cost efficient.

I guess, I find most of your arguments to be analogous to "Black and White TV is the future, because color tv costs more, and some people are Color blind."

He isn't saying the future is retail, he is just saying that retail will never completely go away.

To use your metaphor, it's just like how black-and-white t.v. will never go away. The Andy Griffith show still plays on primetime (in black and white) and Citizen Kane will be remembered as one of the most influential movies of all time for as long as humans are around. (it also is in black and white.)

For the PC? I'd rather check my Steam account and find a gift than have to jot in an activation code and fanagle my way around whatever DRM is put on the disc.

Your arguments seem to be that retail will endure because some buyers will always want it so, and that game developers can't afford the loss of retail. Nobody can prove you wrong in this, because you're right, some buyers will always prefer a physical product to a digital one. In summary your arguments seem to be in defense of demand for the distribution method.

I feel that ignores the supply side. Even in regards to large ticket items, all businesses operate ultimately on volume, and the volume processed must always be worth the investment. Where enough buyers switch to digital the business of selling games at retail will not be worth the cost of capital. In this scenario, despite the desires of consumers the distribution channel will eventually close.

Given the trend in online shopping, especially the expanding market shares of DRM methods like Steam, this seems like a reasonable induction.

Besides, games purchased over Steam for example, are typically cheaper than games purchased at retail- because it bypasses the physical transportation of goods. Retailers have not yet figured out a way to remain competitive in the same way that Steam does.

When publishers distribute to retailers, and get the same amount of money per product whether the product is sold digitally or at retail, and digital markets are expanding, how would you argue against the closure of the channel, and making it worth the time for retailers?

I completely agree with you Shamus. I've said numerous times before, Digital Distribution will never completely overtake Physical Media. They can only compliment each other.

Personally, I'd rue the day if DD ever took a complete stronghold.

That, and I'm probably addicted to the new game smell.

Mmmmmm, plasticy.

Zechnophobe:

The_root_of_all_evil:

Shamus Young:
Experienced Points: The Future is Still Retail

The era of digital distribution may be upon us, but retail won't ever go away.

We're still waiting for the paperless office (predicted in 1975). Funny how offices seem to have even more paper now....

I work in an office. I almost don't need to know how to WRITE because I use physical paper so rarely. Imagine all those e-mails you send each day, the online training manuals for your product, or the complex process of getting authenticated by an outside company for doing good business.

How many receipts do you have? How much paper is there in signs? How many cards, notelets and memos do you have? How many free newspapers are brought in daily? How many paper cups with paper cooling? How much shredding is still done?

Just because electronic paper has increased exponentially doesn't mean that normal paper hasn't stopped increasing. Not including novels, tissues, magazines, flyers, packaging, post-its, money...

If you don't know how to write, that's another problem entirely. Atrophy.

sagacious:
He isn't saying the future is retail, he is just saying that retail will never completely go away.

Which completely contridicts the headline. Stoopid Escapist with their misleading headlines. A more accurate headline would be "Retail Still has a Future".

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