Games On Demand Question
- Thread starter Zensuji
- Start date
There are probably many different factors which i couldn't even attempt to outline accurately, a couple that i imagine are biggies are:
1: Competition: Steam has this problem too, hence the high price tag on new releases on their system. Highstreet and online retailers don't like the idea of a first party system that reduces their sales. As a result i imagine, in order to not upset these retailers, Microsoft would have to sell their downloadable counterpart at a high price thus nullifying the whole point of hosting it online.
2: Bandwidth costs: I can't imagine a full fat DVD9 download being a cheap thing to allow bandwidth for, even on low yeild titles such as the old ones they host now. I can only imagine the amount of bandwidth required to host new, more popular releases would be astronomical. The infrastructure is probably being set up, if only for the next generation of consoles, but i imagine it'll put quite a dent in the bank account so they may be building this infrastructure slowly.
3: Hard drive space: Most 360 owners probably have 60GB hard drives, or even maybe only 20GB. This won't last long if people began downloading full games, deleting a disk install and reinstalling it later is very different to deleting and re-downloading an entire disk. This will likely discourage consumers from investing in a digital copy, thus reducing revenue, and the redownloading aspect will likely add even more to the bandwidth requirement.
4: Home bandwidth: With download restrictions all over the shop on UK broadband providers i can't envisage many people preferring to download an entire game as opposed to pop down the shops/have the disk delivered. I'm on a 10meg virgin line, which is probably faster than the average 360 owner, and i would be very pensive about having to download a full-fat 360 game.
5: No second hand market: This will again hurt the consumers big-time; I remember reading that the vast majority of game retailers' revenue comes from second hand games sales. The digital distribution system, if competitive, will impact the second hand market heavily, possibly resulting in retailers reducing stock of all retail games for that platform (be it as a symbol of protest or to focus on higher revenue systems). This inability to resell a title will also discourage the consumer, prices will need to be lower in order to nullify the loss of this resale value thus upsetting the consumers due to the reasons outlined in point 1.
Obviously these are all just opinion/educated guesses but i wouldn't be shocked if they're not too far off the real reasons.
1: Competition: Steam has this problem too, hence the high price tag on new releases on their system. Highstreet and online retailers don't like the idea of a first party system that reduces their sales. As a result i imagine, in order to not upset these retailers, Microsoft would have to sell their downloadable counterpart at a high price thus nullifying the whole point of hosting it online.
2: Bandwidth costs: I can't imagine a full fat DVD9 download being a cheap thing to allow bandwidth for, even on low yeild titles such as the old ones they host now. I can only imagine the amount of bandwidth required to host new, more popular releases would be astronomical. The infrastructure is probably being set up, if only for the next generation of consoles, but i imagine it'll put quite a dent in the bank account so they may be building this infrastructure slowly.
3: Hard drive space: Most 360 owners probably have 60GB hard drives, or even maybe only 20GB. This won't last long if people began downloading full games, deleting a disk install and reinstalling it later is very different to deleting and re-downloading an entire disk. This will likely discourage consumers from investing in a digital copy, thus reducing revenue, and the redownloading aspect will likely add even more to the bandwidth requirement.
4: Home bandwidth: With download restrictions all over the shop on UK broadband providers i can't envisage many people preferring to download an entire game as opposed to pop down the shops/have the disk delivered. I'm on a 10meg virgin line, which is probably faster than the average 360 owner, and i would be very pensive about having to download a full-fat 360 game.
5: No second hand market: This will again hurt the consumers big-time; I remember reading that the vast majority of game retailers' revenue comes from second hand games sales. The digital distribution system, if competitive, will impact the second hand market heavily, possibly resulting in retailers reducing stock of all retail games for that platform (be it as a symbol of protest or to focus on higher revenue systems). This inability to resell a title will also discourage the consumer, prices will need to be lower in order to nullify the loss of this resale value thus upsetting the consumers due to the reasons outlined in point 1.
Obviously these are all just opinion/educated guesses but i wouldn't be shocked if they're not too far off the real reasons.
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Some good points there Streeteh
Surely the lost of new sales from people reselling games must be massive? I would have thought MS and Sony would be desperate to see the back of it. Couldn't they just start adding activation codes to games to tie them to peoples accounts?
I'm pretty sure I heard somewhere that around 80% of a big high street retailers profit comes from the pre-owned market, if MS and Sony took that away how would it negatively effect MS and Sony?
Surely the lost of new sales from people reselling games must be massive? I would have thought MS and Sony would be desperate to see the back of it. Couldn't they just start adding activation codes to games to tie them to peoples accounts?
I'm pretty sure I heard somewhere that around 80% of a big high street retailers profit comes from the pre-owned market, if MS and Sony took that away how would it negatively effect MS and Sony?
It would stop games retailers from stocking their products. People just aren't ready for a completely digital distribution system for many of the reasons outlined above. Without the retailers stocking their products sales would plummet.
The loss of revenue caused by the second hand market is indeed massive, but as it stands the console manufacturers need the games retailers to sell to the average consumer. From my own personal experience the majority of friends i know who own a console buy their games from the highstreet stores, even in one case where i SHOWED someone how much cheaper online retailers were i was ignored and he continued to waste his money on the highstreet. Out of the 5 people i know with next gen consoles, only two of us have purchased stuff from the PSN/marketplace. As i say this is only from my own experiences so is by no means a good example of the norm, but the majority of my console owning friends would be alienated if the console went digital distribution only.
[EDIT] Oh and, the profit margin on a console itself is tiny, retailers only stock them in the hope of reaping further profits from a consumer at a later date through game sales. Without the prospect of profit in the future who would sell these consoles? I guess retailers could up the price in order to increase revenue, but then we all know how important the price war is between Microsoft and Sony so that would hurt sales even further.
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if they start selling all the new games via games on demand, many retailers will either cut down or stop stocking the games. Just look at how the PC sections in stores has dwindled away to almost nothing over the last couple of years.
MS spent a lot of time reassuring the retail channel that new releases would not be available for sale over gmes on demand whenit was first announced.
MS spent a lot of time reassuring the retail channel that new releases would not be available for sale over gmes on demand whenit was first announced.