Tuesday, 22 November 2011

The Retail Market, Piracy and Digital Downloads

High street outlet

The retail market for video games has changed massively in recent years. The audience for games is much wider than it ever has been before but the way in which we buy and sell games has also become very different.

High street shops have become (in my opinion) extremely overpriced, but their prices probably haven't changed all that much since I was younger, what has changed is the growing competition and cheaper places to buy from, making them seem more expensive. Everywhere has gotten into the profitable buiness of selling video games. Even supermarkets have become a large competitor, often underpricing high street game shops buy as much as £15-20 on new releases. Theres probably not many people that will bother buying a new game from the high street for £40+ when you can get it online for more like £30, so how do these companies keep themselves up? Pre-owned games.

Pre-owned games is a relatively new way of buying and selling that has quickly become popular. Most high street game shops now seem to dedicate more floor space to pre-owned games rather than new, as this makes them more money. The difference isn't much to us consumers and in fact most pre-owned games are only slightly cheaper, perhaps £4-8 if that.But the difference to the retailer and in turn the industry is much more pronounced. If you buy a £45 game from the high street some of that will go back to the producers of the game. You then bring it back for a teeny bit of money back and the shop will then remarket it for £38 but when they sell it next time its in their pockets. This makes selling pre-owned games very profitable for them but less so for the
 gaming industry. Sites like Ebay are also 'cutting out the middle man' and sales between people meaning the industry is losing out on potential profits.

This is sad news for the gaming industry loosing out on alot of hard earned money, but even worse than trade-ins, piracy. That problem that just keeps growing as more and more people are getting faster Internet connections. People download everything and in hard times especially, people want to save money on films, games and music and just download it illegally for free. In these situations people tend to stick to a personal state of mind and think its alright for them to do it and save themselves money, but fail to realise or care there are probably hundreds of thousands of other people thinking the same thing. The amount of money the film, music and gaming industry loses every year due to piracy must be ridiculous.

Steam online game activation
One way this has tried to be tackled is with anti-piracy software, CD keys and authentication/registration of games. This does however tend to enrage alot of people (the pirates) who then whine on the Internet. I've always been one to pay for my games, if I want it, I'll buy it. I therefore don't understand where these people are coming from. People have put alot of time, money and effort into what you want, you don't want to pay them for that put you'll then complain when you realise they've actually tried to protect it? You like the games but don't want to help keep the companies making them in business? I can't understand it, its just greed, wanting something for nothing.

So with high streets being out priced by online shops and piracy stealing sales where is the industry's retail heading? In my opinion digital sales. Digital sales really haven't been around long and have, like piracy become more popular as internet connections have improved. I'm personally not a fan of digital distribution for several reasons. The games tend to be overpriced, often matching high street costs, and you have to wait for it to download but the more importantly you don't get a hard copy of the game. You can end up paying more for a digital copy than for a psychical copy of the game with any extra goodies that might come with it, yet digital distribution is thriving. The immediate access to games, downloadable content and online sales often makes purchasing too easy to resist.

Steam's online store
This wave of online content sales is also making it easier for 3rd party companies to get a piece of the marketplace. Without the need for large publishing companies they can get their games seen by hundreds of thousands of people, which is a great chance for smaller companies to get sales. I do buy downloadable games, generally out of convenience but would personally hate to see this become the primary method of retail, I'll always prefer the hard copy over anything else. Its difficult to really know where the future of game retail lies, we might soon invent a new way of distribution. Hopefully the future holds success for the industry, the continued sales of hard copy games and a world with fewer online pirates!

1 comment:

  1. So right on the issue of pre-owned games, More people need to be aware of this issue, so good on your for writing about it. c: