The prognosis may be terminal, but retail isn't dead yet. Images of each Black Friday and Thanksgiving weekend, with its frenzy of commercial lust, make it easy to forget that the model of selling entertainment in plastic boxes is in existential turmoil. The combined attack of digital downloading, piracy and used-game sales have been sapping the wealth from the business for some time. Now, however, the state of the decay is obvious enough and alternative models are sufficiently well established that developers no longer need to fear the wrath of publishers (and publishers, the wrath of store buyers) in crying its demise.
The most recent, the week before last in fact, was id Software's co-founder and FPS legend John Carmack. He had little qualm in telling the Telegraph newspaper that the App Store model of digital downloading was "the model of the future".
Many people today are sufficiently confident with and literate in e-commerce that physical things have almost become an inconvenience. Above and beyond the cost of the software there is the physical cost of storing the product and the time it takes to go out and buy it. For anyone to not make the generally rational decision to download a game rather than buy it in a store there has to be some extra value added somewhere among all that inconvenience to make it worth their while. This value can be created in two places: either the IP itself or in the rituals of purchase.
The problem with games on discs is exactly the same as that of music on CDs (and if you're not sure how that battle wound up, just take a look at how much floor space HMV now dedicates to them). Namely, that there is no inherent value in the medium. Vinyl, sticking with music for a moment, has from the brink of death carved a sustainable niche over the last decade because there is qualitative value inherent in analogue recordings that arguably can't be replicated digitally (not to mention, the pride to be found in the construction and maintenance of a decent hi-fi system). For audiofiles who make the seemingly irrational decision to pay for, hunt down and store those unwieldy black disks and the machines to play them this pursuit has value and is more than worth its while.
What we've seen in games over the last 20 years is the incremental stripping of value from the physical product, combined with rising prices for triple A titles. To set a benchmark let's look at 1984's Elite, the original packaged release of which not just included the game, manual, but a novella written by sci-fi author Robert Holdstock (there were also plans for origami instructions to recreate the game's iconic wireframe spaceships). This breed of value is totally peripheral to the product itself, but its one of the reasons people remember that game so fondly.
In contemporary parlance we would call it the creation of a 'transmedia world' however the simple truth is that suspension of disbelief and how customers judge a brand (or IP) begins not when they first load up the game but at the moment of first contact with the idea: of awareness. The retail experience and physical product is not the start of this - it's more likely an advert, a piece of reporting or a personal recommendation - but it is a key link.
Contrast that to Assassin's Creed: Brotherhood and its production cost-defying single-sheet manual. There is something quite primitive at work here: heavy, distinctly textured products signify and create the impression of quality where lightweight, rattling plastic doesn't. This lets brands of all kinds justify higher price points: this is why a £150 bottle of Johnny Walker Blue Label comes in a silk lined case where as the £17.50 bottle of Red Label doesn't. Take that away and with it goes a good deal of the perceived value.
If the physical product has been devalued is it any wonder that gamers have no crisis of conciousness when it comes to buying a game for two thirds the price secondhand? There is nothing about 'new' which, for the majority of games, makes them worth £40. That Tesco is moving into the used-game business in the UK also suggests that this perception is not likely to change any time soon. Realising that they cannot dictate such behaviour, the attitude among publishers is quickly turning to one based on creating the value of 'new' in the form of free added content that comes at a premium to those who buy secondhand. This tactic will not save retail, because value is not added to the physical medium, though it will make its death less painful for publishers. Further, digital operations are perfectly capable of adding this kind of value to their products too. The series of webcomics and barrage of free content for Team Fortress 2 on Steam generates the same warm and fuzzy relationship between Valve and its players.
The shopping experience today is pretty soulless. Chains of specialist retailers often run out of poorly kept stores, with demotivated staff, pushing sales promotions and cheap merchandise that undermine what value is left in the commodities they're selling. The inability of these specialist retailers to offer compelling reasons for their customers to be loyal is why in the last 18 months supermarkets have been so successful in taking over the space. It may be too late for many of them, certainly in their current form. The CEO of one leading specialist UK retailer suddenly ended a 13-year tenure at the company earlier this year after profits plunged 28 per cent, wiping £43 million off the value of the company on the stock market in the process.
Whatever business you're in, all wealth is derived from the value that customers perceive. Nothing ever dies because something better just pops up and snatches it away in the night. Digital is not killing retail because it is a more rational or convenient way to access games, even if you make that case, but because retailers and purveyors of the physical product have failed on several levels to justify the unique added value of what it is they offer - the value of the product, the rituals of buying and the physical environment.
Retail, you will be missed.
Opinion