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David Perry Dukes Out Digital Games Debate with GameStop Execs

| 12 Sep 2008 13:46
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Acclaim's David Perry has written an open letter arguing against the GameStop executive army led by CEO Dan DeMatteo, who claims that downloadable games are a long way away from competing neck-to-neck with retail stores.

A few days ago, DeMatteo predicted in a GameDaily interview that digital distribution wouldn't surpass retail's relevance for another twelve years, citing piracy and console manufacturers cutting developer profits for downloadable content as the primary roadblocks.

Less than a day later, GameStop senior vice president of merchandising Bob McKenzie echoed DeMatteo's sentiments by saying to Edge Online, "We're not saying we won't be impacted at all by digital distribution, but the average customer isn't going to have the patience for a 72-hour download for a game on their system."

"We really think we provide a tremendous value to the customer by them coming into our stores. We offer a great experience with the expertise of our staff," added Executive Vice President Tony Bartel.

Acclaim Chief Creative Officer David Perry finds the GameStop lines to be an inaccurate representation of the growing market and wrote GameDaily a letter outlining the issue.

"He says we are 12-17 years away from downloading games digitally? I know he's got to pretend that digital distribution isn't relevant (or any kind of threat) to protect his stock price, but I guess Steve Jobs is miles off course then (100,000,000 digital downloads in the first 60 days of opening Apple's 'Digitally Distributed' App Store,)" argued Perry. "Or that iTunes is now the biggest music retailer in the world. There's tons of games I can download today, digitally, on console and PC. 12-17 years? Try right now."

Perry points to pricing as a pusher for the rapidly increasing digital game market.

"In reality, every game that goes 'digital' will drop in price for the consumer (when compared to today's system). 'Price' will always be a key part of the 'buy' decision for consumers, and removing fees for GameStop, Packaging Design, Packaging Materials, Manuals, Shipping, Insurance, Manufacturing, Distribution, In-Store Promotions, Co-Op Advertising, Returns, etc. will help consumers see attractive price drops," said Perry. "For publishers, removing first party fees to make custom expensive Blu-ray discs will be a nice price reduction also. And yes, as an industry we have no problem paying a distribution fee (as we are very used to that due to our relationship with GameStop)."

Will long download times hold down digital content? "Obviously, large data will get streamed as required, as that's how things work in a digital world. How can Apple get an HD movie to play in seconds? No 72 hour download required as he quotes. Also the vast majority of games are nowhere near 30GB anyway, and what about data compression? (Sigh.)," says Perry.

China acts as an active, successful example of downloadable content comprising a massive chunk of gaming revenues. Perry explained, "China is the living proof of this, where they have a non-existent console media business, and a thriving digitally downloaded industry. A digital distribution industry which grew 69.5% last year, dramatically faster than our retail industry."

He left GameStop a piece of advice: "If they want their company to still exist in 12-17 years, I'd go and buy Steam from Gabe Newell, which technically can't exist yet as Gabe is clearly 12-17 years ahead of the curve."

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