UK Developers: Games Retail Channel Dead in 10 Years

February 21, 2012 -

Jagex CEO Mark Gerhard said, as part of a panel at the BAFTA Question Time event (sponsored by GameIndustry.biz), that traditional retail will fall by the wayside within ten years. He was speaking only of retail as it relates to the sale of games. Gerhard believes this because he thinks that digital distribution channels have managed to serve the needs of consumers very well. Naturally as a fellow at the head of a company whose products are sold exclusively on the Internet, he may have some bias in the matter... but many others on the panel agreed.

"I think, 10 years out from now, we'll be talking about [physical] retail nostalgically, as a museum piece," he said. "I don't think there's much there that would give it a second life."

He believes that, because retail takes "huge chunks of margin" from developers, it's easy to see why independent developers are more than happy to walk away from it.

"That all erodes the economics for developers being able to make money," he continued. "They take a chunk - say 20 or 30 per cent - the publishers take a bit, and after inflation it's no wonder that the independent games industry isn't alive and vibrant, because they're not making any money."

"[Developers'] response is almost desperation. 'We're going to go straight to the customer. We're going to go online. We're going to bypass the sequence that's taking so much from us...' I recognise that it's sad, but I think it's a fait accompli."

"It's sad to see an institution decline, but the writing has been on the wall for quite some time - the internet didn't happen yesterday... People are still playing games. They're still doing business; they're just doing it in a different place... If you don't adapt you die. It's as simple as that."

Rebellion founder Jason Kingsley agrees, comparing retail in the UK to the sorts of specimens people learn about from fossils.

"I always thought data should go down wires and fibre optic cables," he said. "It's a reforming of an industry, and a refocusing away from selling data - which is more easily distributed in other ways - to offer a very different kind of service."

UKIE head Jo Twist warned the other panelists that they should avoid underselling the importance of retail. She says that a one-to-one retail experience with engaged sales staff is still important to consumers who are unfamiliar with gaming or shopping.

Kingsley disagreed, noting that personal recommendations through social networks like Facebook and user reviews already provide the same service in a more meaningful way.

Frontier Developments' David Braben said that major retailers in the UK like Game and HMV never offered the level of service Twist describes, and have proven instrumental in the decline of those independent retailers that once did.

"In a sense, they're just getting a taste of that medicine," he said. However, Braben also added that internet speeds in the UK weren't yet capable of supporting a full scale shift to digital retail for "the next year or two."

Braben also echoed Gerhard's belief that in 10 years it would be "hard to imagine" any games being sold in "shrink-wrapped retail."

"Whilst I am tremendously sympathetic to all of those that work in the shops, the fundamental problem is that they've got to look at their business to reposition it anyway - that's irrespective of whether it's a good or bad thing."

Source: GI.biz


Comments

Re: UK Developers: Games Retail Channel Dead in 10 Years

I honestly expect this to happen sooner or later, much like it's happening with books, radio, newspapers and even television to a certain extent.

Virtually everything is digitalised today that soon enough it'll be nigh impossible to find certain things in physical format. Some call this natural "evolution" or the industry "adapting" but frankly, I just see it as yet another way for the industries to force-feed their ways on the average Joe.

I like buying my games from a store. I like having physical copies of my games but quite frankly, with the advent of crap services like Steam and Origin, what's the point? Even though buying a physical copy still has distinct advantages (such as less internet bandwidth usages, quicker content delivery and easier to get collector's goods) I still then have to be online to activate and install my product.

I might expect this kind of thing to happen but I'll be damned before I'm going to like it.

Re: UK Developers: Games Retail Channel Dead in 10 Years

Now I know how PC gamers have felt for the past few years hearing modern day jesters like Mark Gerhard squeal about shit like this.

Re: UK Developers: Games Retail Channel Dead in 10 Years

Guess I'll be buying my physical games from other countries in ten years time? Heh heh. Every other gamer I know still buys physical over digital any day of the week. Until our digital purchases aren't bound up in ownership-stripping and rights-limited systems and services, I can't see me or those others changing our minds about that.

Re: UK Developers: Games Retail Channel Dead in 10 Years

I can't really speak for the UK (actually, who am I to speak for the US?) but US retail ain't going anywhere.  Oh sure, it'll occupy a smaller piece of the pie in 10 years but it'll still be around.

We gamers like our special/limited editions with figurines and other junk.  Can't digitally distribute that.  Not yet, anyway.

 

Andrew Eisen

Re: UK Developers: Games Retail Channel Dead in 10 Years

Something that Kickstarter has shown is that people don't need a retail outlet to get that special edition schwag. They even get a choice of what kind of schwag they want. 

Re: UK Developers: Games Retail Channel Dead in 10 Years

True, but a physical retailer nets me the goods now.  For impulse purchases, the best you can do is next day shipping for an exorbitant extra fee.  Sometimes, I'd rather just stop by the store on the way home and pick up my stuff.

Besides, I was talking both physical and online retail when comparing it to digital distribution.

 

Andrew Eisen

Re: UK Developers: Games Retail Channel Dead in 10 Years

True, nothing beats the power of an impulse purchase. 

Re: UK Developers: Games Retail Channel Dead in 10 Years

I fully agree with that. Retailers sell extra bonuses and other merchandise you just can't get digitally.

Plus some actually like going and dealing with a real person once in a while. I know I do, as well as like having those came cases lined up on my shelf.

Re: UK Developers: Games Retail Channel Dead in 10 Years

I do not think the UK will have enough wide spread fast cheap internet to provide a proper alterative to retail outlets.


Copyright infringement is nothing more than civil disobedience to a bad set of laws. Let's renegotiate them.

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http://zippydsm.deviantart.com/

Re: UK Developers: Games Retail Channel Dead in 10 Years

The USA likely won't either with how things are going.

Re: UK Developers: Games Retail Channel Dead in 10 Years

Pretty much, its enough to support some of your from top down publisher>distributor system but not enough to get rid of retail distributing.


Copyright infringement is nothing more than civil disobedience to a bad set of laws. Let's renegotiate them.

---

http://zippydsm.deviantart.com/

 
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