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GameStop Undaunted By 160GB PS3
By Kris Graft
August 21, 2008
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"We do expect publishers will develop some revenue stream by adding on digitally-distributed content on select games, but the forecast for this total is pretty insignificant."
As digital distribution of full games continues to creep onto consoles, GameStop execs are unconcerned about the possibility that bigger hard drives and full-size game downloads will prompt a circumvention of brick and mortar retail.
Commenting on the newly-announced 160GB PlayStation 3, GameStop COO Dan DeMatteo said Thursday that he doesn't expect full-size triple-A titles to proliferate Sony's online marketplace.
"I think the primary reason why Sony is introducing their 160MB hard drive is because they want consumers to use [PS3] as a hub of their media system, with both movies and music.
"We do expect publishers will develop some revenue stream by adding on digitally-distributed content on select games, but the forecast for this total is pretty insignificant."
Sony and Electronic Arts recently announced that Burnout Paradise would be released as a full digital download on PSN. Sony also offers games such as Tekken 5: Dark Resurrection, Siren: Blood Curse, Grand Turismo 5: Prologue and Warhawk as retail-size game downloads.
By offering games on PSN, retailers like GameStop are cut out of the sales equation. But the retailer believes widespread, large-game digital distribution on consoles is still a ways off.
"We don't expect full distribution of games to be a threat because of the games' size and distribution speed," DeMatteo added.
I also work for gamestop and i do feel that the company's days are numbered. Numerous execs including Phil Harrison, formerly of Sony, has said that DD is the future. The next generation of console will almost certainly include a robust DD service. I think it is clear that microsoft and sony are already looking to move in this direction with the continuing increase in the hard drive size. It will come down to how smart they are with the pricing to see how quickly Gamestop will be forced to go the way of SamGoody and Tower Records.
I agree whole-heartedly. Some people have mentioned wanting to have hard copies (for selling/trading in as do I). But other than for that, what would be the point? If everything ended up going digital, woud it really be that bad? I mean, how many people are sour that they don't have to carry around a 24 disc case with them just to be able to listen their music in their car? I can't remember the last time I bought a music CD. I don't hear anyone bummed about having a digital media player? I certainly am happy I don't have to bring all my cds in my car any more.
My optimal DD service would consist of a Steam like service that keeps track of who you are and what games you have purchased.
Based on the amount of time you have owned the game you would get something back for selling the game back to the service. So for the first three days, you could get a complete refund to 6-12 months you can't get anything back.
You would also be able to transfer ownership of the game to other members of the service.
Just as steam, if you try to play a game that you no longer own do to you selling it back to the service or transferring it to another player, the authorization service would not let you play it.
This is entirely possible, but the only problem is getting someone willing to do it.
I don't like the idea of digital distribution at all for the moment. I work at GameStop, and yes, like has been said we do make most of our profits off of used games. However, I believe used game sales, or at least trade-ins influence customers to make more new game purchases. When a customer is done playing a game and decides to trade it in at our store, we offer both trade-in credit and cash. GameStop gives 20% more value for in-store credit, so customers often opt to go that route and then use the credit to either reserve or purchase more games. With DD, consumers would not have the option to sell or trade games, and thus would be limited in the amount of funds available to purchase new content. At GameStop, we are basically paying people for their games and that exchange of money or credit often results in further business that benefits both game companies and our stores. DD would eliminate this option for consumers.
Good point. I do trade my games in toward NEW game purchases (Just picked up Too Human yesterday from Gamestop) so as a consumer I like the idea of trade-ins, my point earlier was from a business standpoint from what a publisher may be thinking. I wonder if publishers share the same outlook on trade-ins as you do though. I'm not confident they do, and that's why I see them eventually going that route (just like music did). And plus, it saves them on distribution costs, they don't have to pay for discs necessarily, the covers, the boxes, shipping costs so in the long run I think the publishers believe DD would be more profitable. Either way, we're heading that way and it'll be the norm eventually. Same with DVDs, everything will end up being digital within 10 years or so.
If Gamestop can no longer sell used games, they will go out of business. All of their profit comes from the sale of used games.
I would love it if in the next gen of consoles we have 3 terabyte hard drives and we could download every game. Just pop off the hard-drive on my Xbox 720 and take it to my friend's house.
Yea it would be convient except when Im done with the game I can't let my friends borrow it trade it up or sell it on eBay. Unless they could send you a hard copy in the mail.... That might work..
StefanKing, you miss the point entirely. The whole idea behind digital distribution (DD) is so publishers don't lose money on trade-ins/borrowing/whatever. When someone trades a game in and that game is then purchased used by someone else, that results in 1 less sold game for the publisher. If they cut out gamestop with DD (which will ultimately happen) the purpose of that would be to prevent trade-ins. Right now MS and Sony are testing the waters with DD (live arcade, full xbox 1 game downloads, full retail game downloads on PSN) and most likely will at least incorporate the option in their next systems. Shane Kim of MS has already said that with the next Xbox they are looking into DD even more (duh). I'd expect almost a redemption code type situation (similar to buying live-arcade game cards at retail) where you can either go into a store and buy your "card" with a code on it, then download the game (as well as just puchasing it online) and/or a load disc that will function as your key and your key only with digital rights to your xbox only (no sharing with friends) to save the game to your HDD. So not only will they have the option for digital, they will also fix the download speed/people without highspeed internet problem by offering discs which would be rip-only keys to play the game off the HDD after you install it. Completely wiping out trade-ins. Now, gamestop could still sell the rip-discs, but trade-ins would go bye-bye since you can't trade in your digital rights (since the disc will only offer the digital rights key to one console). Bye a new xbox you say? Then MS will offer what they offer now, a once-a-year option to transfer your digital rights to a new system (who buys new xboxs more than once a year?). So, people couldn't whine about that either. Say good bye to gamestop as you know it (at least in the next 3-5 years any way. Just my thoughts...
"who buys new xboxs more than once a year?"
Er... does anyone? ....or does the fact that I don't mark me out as ludicrously un-hardcore? Seems a bit excessive somehow...
So if Sony is adding a massive hard drive and setting up video-download facilities, does that just mean that it's hedging its bets on how content will be delivered in future, or does it mean that Sony's expensive and troubled strategy of using PS3 to but Blu-Ray in every home has completely missed the point when it comes to where people are going to be getting their movies and games from a few years from now?
Exactly my point. With current xbox live arcade games, video puchases, etc on xbox live you purchase the digital rights to it as well. If you hook your hard drive up to your buddies xbox, you cannot access your own content unless you are online on the gamertag you purchased the content with (the rights belong to your console, not the harddrive). If you buy a new xbox you can transfer the digital rights if you want if you dont want to HAVE to be online to play/view content on the new xbox. People have complained about only being able to transfer content once a year, my point was you shouldn't complain about only being able to transfer the content once a year since there's no way people are buying more than 1 xbox a year (unless they're mad they can't pirate the content as easily now)? As for the blu ray thing, I think you're right. I think they see how lucrative the video marketplace has been for MS so they are trying to tap into that. My point was no to call you un-hardcore, is that a word? I just meant there's nothing wrong with their digital rights strategy if they decide to continue using that for future DD.
I don't think I missed the point at all. Your making it sound like when we cut out the middle man like gamestop's that there increased profits will yield lower price tag on us? I mean they don't even have to produce and disc Manuel case with DD.... The price will stay the same yet when Im done with the game its worthless. Im not say that DD wont happen, I'm just saying it sucks on that aspect. Tarde-ins are great for the consumer at least to get some value back from. Who wants to buy something but are limited by play only rights? If I purchased it, then I feel that I should be able to do whatever I want with it. In the end DD will happen for sure, but I personal would like to have the option of having a hard copy. Just my thoughts
I didn't mean to make it sound like I was saying it will be cheaper for the CONSUMER, I know it won't. If you read my post from later that day, I specified that I meant from the publisher's perspective that they could possible be more profitable because you can't trade-in digital content so people would be forced to buy new (not cheaper for consumer) instead of buy used (potentially more new copies of particular game sold for publisher). My post was more from what I think the publishers are thinking (not what I want per say) that if they cut out trade-ins, they will sell more copies since people can't buy them used any more (since they don't obviously profit from the sale of used copies). Which it was pointed out to me by someone that trade-ins could potentially lead to MORE NEW game sales since people trade up to buy the game new (As I do frequently). So who really knows if publishers will sell more or less new copies of their game if trade-ins cease to exist? Any thoughts? Maybe the publisher will pass their savings on to us, you think??? I agree, if I buy it, I should be abe to sell it or give it away or whatever. I guess you could sell your hard drive, that'd be about the only way you could. But that's obviously not feasable. I would like to have a hard copy as well, as long as i can still rip it to my HDD so I have better load times. I would be bummed if trade-ins went away, because I do rely on it quite a bit for my new game purchases.