Network now...NEWS
Digital Remains "Biggest Threat" to GameStop
Leading brick-and-mortar game retailer GameStop has typically brushed off the threat of digital distribution, but one analyst says pressure from direct-to-consumer sales is mounting.
Doug Creutz with Cowen and Company said in a Friday research note, "Digital remains [the] biggest threat [to GameStop]."
The analyst agrees with GameStop's management, which claims that full-blown, widespread digital distribution is "not coming any time soon." But he adds, "...We believe that downloadable content is starting to take off now, and could slowly pressure [GameStop's] growth rate as packaged goods business begins to slow."
Creutz continues, "Publishers see digital/online as a way to kill two birds with one stone–boost margins and thwart the sales of used games–and are starting to experiment with ways to sell [downloadable content] directly to the consumer."
GameStop's used business is substantial. Analysts estimate that fiscal 2008's used business (hardware, software, accessories) brought in $2 billion in sales out of $8.8 billion in total revenues for fiscal 2008.
While GameStop's used games drive around 20 percent of revenues, they drive 40 percent of gross profits, thanks to used games' 50 percent gross profit margin.
Creutz also says that the casual nature of the Wii could mean that the core audience-focused GameStop may lose share of the Wii market.
"...The console will not be supply-constrained in 2009, and more likely to be picked up by casual shoppers at big-box retailers like Wal-Mart, Target, Best Buy, etc."
Contact Us / About Us / Advertise With Us / BeltwayBlips / TechBlips / MassiveBlips / GamerBlips / FAQ
Subscribe To Edge Magazine / Corrections / Terms & Conditions / Privacy Policy
Copyright 2006 - 2009 Future Publishing Limited, Beauford Court 30 Monmouth Street Bath, UK BA1 2BW
England and Wales company registration number 2008885
Subscribe To Edge Magazine / Corrections / Terms & Conditions / Privacy Policy
Copyright 2006 - 2009 Future Publishing Limited, Beauford Court 30 Monmouth Street Bath, UK BA1 2BW
England and Wales company registration number 2008885
Until Consoles come with Massive Hard Drives as standard in the consumers first purchase of the console, Download Content taking over 100%, will Never be a reality! The consoles of today already need Hard Drives that are in the Terabyte size just to handle all the downloadable content, such as Movies in HD and Full Size Games.
Download a Few Full Games, A Few Movies, and Add-On Packs and along with some consoles having required installs of 5 gigs or more..(cough..cough...Sony) your factory installed Hard Drive fills up Rapidly!
True Microsoft has a 120gig HD that is very easy to install, but the price is way out of range for the memory you are getting. PS3 allows for almost all Large 2.5(laptop) Hard Drives, but the process of backing up your old Hard Drive, Formatting your new Hard Drive, Re-Installing everything from your old Hard Drive, is too complicated for your average consumer. Even following PS3 Guidelines on installing a New Hard Drive has left some consumers with a bricked system.
The Wii..ROFLMAO...won't go there. The SD Card is Fine, until you realize you can only use it as a storage hub and can't play games installed on the actual SD card, only use it to download games that you are deleting from your Wii Channel and then Re-installing it to the Wii Channel when needed. The Wii has internal memory but it is a joke, and you could never fill up all your Wii Channels before you ran out of memory.
For Fully Digital Downloads to have any impact on Retail Sales, I believe we will have to see a Next Gen Console that combines the ease of pushing a button like Microsoft, with the capacity of any Large Hard Drive like PS3. The Next Gens Hard Drives at the lowest will need to be Terabyte, while actually probably needing Petabyte, Exabyte, Zottabyte or even Brontobyte or larger.
Your average console consumer will gladly embrace Full Digital Downloads as long as it involves 2 things, 1.convenience and 2.a lower price point/value for hardware. Make it too complicated or pricey as is the examples of Microsoft or Sony, and Digital Downloads, truly will pose no threat.
yea while gamstop or eb games make money off of console game devs. Pc game devs are enjoying bigger profits than consoles game devs.
Pc gamers don't have to worry about getting milked for from micro soft or sony. So it's a win win for both gamers and game devs.
I'm glade i don't have to deal with eb games or gamespot ever with their bad services and pc gaming is dying garbage.
LMAO -
"PC gaming is dying garbage."
Pay attention when you're typing!
So he's saying that PC gaming is garbage, and it's also dying? ROFL, nice one.
Typical Microsoft here, trying to f*ck you over with the HDD.
the biggest hurdle to digital download growing wings, is console designers seeing the hard drive as the cash cow that covers the cost of the cpu and graphics chips they put into their products. In the UK, hard drives for the 360 are currently on Amazon at £1 per gig. That is bat-shit-with-rabies, crazy. Until this situation is changed and people are allowed to drop off the shelf PC hard drives in their consoles, DD is a threat to very few. As an example; my 360's paltry 20 gig HD is now full of downloadable content from just 4 games. That means the makers of the other 20 games I have, are getting no sales out of me. And I refuse point blank to pay M$ prices for their hard drives.
You can also drop an off-the-shelf 120GB HDD into your existing Xbox 360 HDD shell for about $50-60. It's not a straight disk swap & you'll need to do a little bit of hacking, but the directions are readily available online.
You can already drop an off-the-shelf 2.5" (i.e., laptop) drive into a PS3. I fact, I just upgraded mine last week. Sadly, my 360 pokes along with its original 20GB drive because I too refuse to pay what MS wants for the 120GB add-on. Ridiculous.
I agree foot fuckin mastah. I saw a 1 TB external HDD the other day for $150 at the BX. How MS hasn't lowered the price and admitted they'v been stealing money from everyone I don't know. They should lower the price of the 60 gig to $50, and the 120 gig to $100. Those prices are still too high, but at least they'd be better.