The Best Days of Game Retail Are in the Past, Says Analyst

The Best Days of Game Retail Are in the Past, Says Analyst

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Retail isn't where the money's at anymore, says analyst Ben Keen, or at least, not as much of it.

Between competition from online and pre-owned sales, more devices on the market capable of gaming, and people just not spending as much money, Keen, who is the chief analyst for Screen Digest, thinks that the game retail sector hit a peak in 2008 and won't recover in a hurry.

Keen expected the sale of new games to continue to be the main source of revenue for videogames, but thought that worldwide spending would decline significantly over the next few years, and only begin to increase again in 2015, after the introduction of new hardware. He didn't think that the decline in spending would necessarily be because people were buying fewer games, but rather that the games would become cheaper as the consoles entered the latter stages of their life cycles.

Over the same time period, he predicted that the market share of digital distribution, both from services like Steam and from mobile gaming, would increase from about a fifth of total videogame spending, to just over a third. He noted, however, that these figures only applied to the UK, which has a strong retail market, and suggested that the market share of digital distribution in other territories might be even higher. He also thought that the wealth of new opportunities afforded by social and mobile gaming would result in a certain degree of market fragmentation. He said that this situation would favor companies with large cash reserves, or the size to take advantage of multiple opportunities, and thought that there would be a lot of consolidation in the years to come.

Some of Keen's predictions seem pretty bleak, like a whopping 14% year-on-year reduction in new games sales in 2011, and I must admit that I'm rather hoping he's wrong. A contraction on that scale - which according to Keen would see the new game market drop from $18.7 billion to just a shade over $16 billion in just a single year - would be devastating for the industry. DLC and digital distribution would obviously take up some of that slack, but it's still going to be a significant decrease. If Keen is correct, you can expect to see a number of smaller studios - and probably some big ones too - closing, as well as publishers less inclined to take risks on new IPs and ideas.

Source: MCV

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All it will take is one major mistake from Steam, and retail will get a major boost again. When and if Steam will ever make that mistake is yet to be seen.

They can make all the predictions they want that won't stop me going to the shop on release day and picking up my boxed copy...

Antari:
All it will take is one major mistake from Steam, and retail will get a major boost again. When and if Steam will ever make that mistake is yet to be seen.

I doubt it. They'll all flock to Direct2drive or Gamersgate. And, of course, there's the small problem with retailers not bothering at all with PC games.

not really surprising what with the news about retail stores closing left and right, companies desperately trying to grab on to the digital distribution life line way to late and online stores being able to deliver the game on release date for 2/3rds of the price and with free shipping, the only thing that shocks me about this is that it actually required a expert to bring the news.

Delusibeta:

Antari:
All it will take is one major mistake from Steam, and retail will get a major boost again. When and if Steam will ever make that mistake is yet to be seen.

I doubt it. They'll all flock to Direct2drive or Gamersgate. And, of course, there's the small problem with retailers not bothering at all with PC games.

Not nessisarily. If people loose access to a large library of games to an online service. They probably won't be ripping right to the next one. It would take a pretty collosal screw-up on Steam's part. But anything is possible.

Antari:

Delusibeta:

Antari:
All it will take is one major mistake from Steam, and retail will get a major boost again. When and if Steam will ever make that mistake is yet to be seen.

I doubt it. They'll all flock to Direct2drive or Gamersgate. And, of course, there's the small problem with retailers not bothering at all with PC games.

Not nessisarily. If people loose access to a large library of games to an online service. They probably won't be ripping right to the next one. It would take a pretty collosal screw-up on Steam's part. But anything is possible.

On the other hand, it won't matter in the long run. Digital distribution is the way forward, the only reason we're still buying retail is a combination of nostalgia, status quo (aversion to change) and fear of online theft.

Well first of all I am not surprised, and second I don't think its a big deal.

Why you ask?

Well game specialist shops, like GAME and GameStop suck.
They don't give me anye value for my money. Their library of games is not any bigger than the ones I can find at any other electronic store selling games.

The only thing game specialist stores has going for them is second hand sales, which the industry is trying to kill off anyways. (Though that is an whole other discussion)

Personally I have started boycotting places like GameStop, because I get the same prices and selection from the electronics store in the same mall as my GameStop, and I can also buy other things in the elecronics store.

What I am trying to say is I don't think there will be a market for game specialist stores, unless the people working there are true specialists in the field of games and gaming.

Its with CD stores, they are a dying breed also. In Norway where I live one chain has survived though, because they were always trying to be the best on market, with the best most knowledgable employees.

So if game stores want to survive, they need to adapt a similar stance, or they will loose out to the stores that does games well, plus sell you a milion other things.

poiumty:
On the other hand, it won't matter in the long run. Digital distribution is the way forward, the only reason we're still buying retail is a combination of nostalgia, status quo (aversion to change) and fear of online theft.

Oh, and availability of broadband.

And bandwidth caps.

And crippling DRM (Not in every instance, but still).

And the capacity for things like resale.

And the poor pricing of console DD products.

But silly things like not having access to a high speed connection are trivial compared to aversion to change, eh?

Aurgelmir:
Snippity

Gamestop is damn rubbish but recently GAME has been buying out all the good pre-order bonuses. They also have a better reward card system than Gamestation or Gamestop so they actually have very good value if you plan on pre-ordering games and buying them on day one.

But yeah Gamestop is so bad I won't even walk in there...

Not suprising really I haven't bought a game from a retail outlet such Game or Gamestation for over 2 years. Get all my games from steam or online disturbutors like play.com which offer the better deals on prices of new games. It's simple really, customers will always go to where they get the best value for their money, and this downward trend will continue until games retailers on the high street can offer better value for money.

Delusibeta:

Antari:
All it will take is one major mistake from Steam, and retail will get a major boost again. When and if Steam will ever make that mistake is yet to be seen.

I doubt it. They'll all flock to Direct2drive or Gamersgate. And, of course, there's the small problem with retailers not bothering at all with PC games.

wrong, we shall go to impulse, for it is awesome

Aurgelmir:
Well first of all I am not surprised, and second I don't think its a big deal.

Why you ask?

Well game specialist shops, like GAME and GameStop suck.
They don't give me anye value for my money. Their library of games is not any bigger than the ones I can find at any other electronic store selling games.

The only thing game specialist stores has going for them is second hand sales, which the industry is trying to kill off anyways. (Though that is an whole other discussion)

Personally I have started boycotting places like GameStop, because I get the same prices and selection from the electronics store in the same mall as my GameStop, and I can also buy other things in the elecronics store.

so you would rather transfer to a system where you cant get any money back instead of one where you can but that is business sound, why the hell would they give you 40 bucks for a 50 game, that makes no kinds of sense, learn how business works, of course they dont give you full price for a trade in, that would be stupid

Analyst spells DOOM.

Everyone else points to 2012 and says "Yeah?"

Digital downloads won't be the norm for a while yet. But the notion that big supermarkets with buying power will end up dominating the industry is spot on. Already in the uk a big supermarket like tesco, asda(wallmart for the yanks) and morrisons steal much of game and gamestations thunder selling the big titles at a massive reduction. Best recent example was call of duty black ops for 25 quid, great for the consumer but it sucks for the job market, one supermarket means less employment than several game stores. Though some of the 'expert' advice in these stores can be dubious I also consider them to be a lot better than the supermarkets,. also my local supermarket rarely carries any of the smaller more obscure indie titles like deadly premonition, battle fantasia, or valkyria chronicals. Mainly they just bulk buy the big releases and sell em cheap. Also they have moved into the pre-owned market as well. That said the supermarkets still have one source of viable competition in online stores like amazon, who have equal buying power and employ even less staff than the supermarkets, with the added bonus of fan reviews on the titles. So in the future our games will be cheaper, being an indie co. may be tougher and their will be a huge hidden cost with our games for the growing number of unemployed as supermarkets shut down small businesses left and right.

Worgen:

Aurgelmir:
Well first of all I am not surprised, and second I don't think its a big deal.

Why you ask?

Well game specialist shops, like GAME and GameStop suck.
They don't give me anye value for my money. Their library of games is not any bigger than the ones I can find at any other electronic store selling games.

The only thing game specialist stores has going for them is second hand sales, which the industry is trying to kill off anyways. (Though that is an whole other discussion)

Personally I have started boycotting places like GameStop, because I get the same prices and selection from the electronics store in the same mall as my GameStop, and I can also buy other things in the elecronics store.

so you would rather transfer to a system where you cant get any money back instead of one where you can but that is business sound, why the hell would they give you 40 bucks for a 50 game, that makes no kinds of sense, learn how business works, of course they dont give you full price for a trade in, that would be stupid

Simple answer:
I don't trade in games, and I can afford new copies. So what does the game specialists give me? Nothing.

Aurgelmir:

Worgen:

Aurgelmir:
Well first of all I am not surprised, and second I don't think its a big deal.

Why you ask?

Well game specialist shops, like GAME and GameStop suck.
They don't give me anye value for my money. Their library of games is not any bigger than the ones I can find at any other electronic store selling games.

The only thing game specialist stores has going for them is second hand sales, which the industry is trying to kill off anyways. (Though that is an whole other discussion)

Personally I have started boycotting places like GameStop, because I get the same prices and selection from the electronics store in the same mall as my GameStop, and I can also buy other things in the elecronics store.

so you would rather transfer to a system where you cant get any money back instead of one where you can but that is business sound, why the hell would they give you 40 bucks for a 50 game, that makes no kinds of sense, learn how business works, of course they dont give you full price for a trade in, that would be stupid

Simple answer:
I don't trade in games, and I can afford new copies. So what does the game specialists give me? Nothing.

then why even bring up the fact that they don't give over 50% of a games original value if that doesn't matter to you?

Worgen:

Aurgelmir:

Worgen:

so you would rather transfer to a system where you cant get any money back instead of one where you can but that is business sound, why the hell would they give you 40 bucks for a 50 game, that makes no kinds of sense, learn how business works, of course they dont give you full price for a trade in, that would be stupid

Simple answer:
I don't trade in games, and I can afford new copies. So what does the game specialists give me? Nothing.

then why even bring up the fact that they don't give over 50% of a games original value if that doesn't matter to you?

Pretty sure I didn't bring it up.

Aurgelmir:

Worgen:

Aurgelmir:

Simple answer:
I don't trade in games, and I can afford new copies. So what does the game specialists give me? Nothing.

then why even bring up the fact that they don't give over 50% of a games original value if that doesn't matter to you?

Pretty sure I didn't bring it up.

suppose it depends on how you interpreted "Well game specialist shops, like GAME and GameStop suck.
They don't give me anye value for my money. Their library of games is not any bigger than the ones I can find at any other electronic store selling games."

to me that sounds like your rallying against not being given enough money for "sports game 56 more football"

Worgen:

Aurgelmir:

Worgen:

then why even bring up the fact that they don't give over 50% of a games original value if that doesn't matter to you?

Pretty sure I didn't bring it up.

suppose it depends on how you interpreted "Well game specialist shops, like GAME and GameStop suck.
They don't give me anye value for my money. Their library of games is not any bigger than the ones I can find at any other electronic store selling games."

to me that sounds like your rallying against not being given enough money for "sports game 56 more football"

Well I pay the same for a new game at a game specialist as I do any other electornics store. So if I dont care for second hand games, and I don't get any extra knowledge from the people working at GameStop, why should I go there?

PS: GameStop tends to be more expencive than the electronics stores also..

 

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