DISTRIBUTION: MARKET ANALYSIS Getting the box to market
Despite the rise of digital and the falling number of indies, distribution remains a critical part of boxed product market. Dominic Sacco speaks to leading distributors to find out their burning issues and the challenges they face
DISTRIBUTORS are key to getting the latest game, peripheral or low- priced margin maker to market. But the sector continues to see new developments, and more importantly, presents several challenges to other sectors of the games market.
The price of games remains a key issue. Mid-range budget titles have emerged, standard RRPs are rarely paid by the consumer and supermarkets are going even cheaper on price. So cheap, in fact, that a number of independent retailers are bypassing distributors and are instead buying stock directly from the supers.
Meanwhile, exclusive distribution deals continue to present new opportunities to publishers, retailers and distributors. There have been some massive games released this year including Heavy Rain, Red Dead Redemptionand FIFA 11 but it’s not just the publishers and retailers who benefited from them – distributors have too. But some feel the time for exclusivity is over, and that the idea of such a business direction stifles retailer and consumer choice.
A major area of growth that shows no signs of slowing down is digital distribution, with more games available to download on Xbox Live, PSN, Steam, the iPhone App Store and others than ever
before. But should physical product distributors be concerned of their business model and embrace digital more, or will there always be a space for boxed goods?
Other challenges have knocked louder on distribution’s door this year. With pre-owned sales flourishing and big-name retailers introducing the service across the UK – including Argos, Asda and Tesco – the space for re-releases
ON THE RISE OF DIGITAL DISTRIBUTION
Andy Payne, MD, Mastertronic Group – which owns The Producers:
“We love it and have been selling some of our own products via download for seven years. We have
our own technology and our Get Games platform – a joint venture with Eurogamer. It is a competitive market, but there are opportunities for companies, new and old, provided that they get the balance of technology and people right.”
Dave Cotton, Director, United Software Distribution:
“We accept it is happening but don’t think it will be accepted as the norm for many years to come. Digital
downloading is a service used mainly by the minority or, for want of a better phrase – geeks. The digital market appears over-crowded at the moment but if it grows to a size all these companies need, then maybe they will survive. However, this self realising expectation model may be flawed – and some of the downloading sites days could be numbered.”
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Richard Marsden, Sales Director, Realtime Distribution:
“I think there is only one true portal for digital distribution and that is Steam. While many publishers have or will have their own platform to distribute, none have the appetite to offer prices lower than boxed versions available from retailers. For this reason, none of them have it right as the consumer regards this as madness. Digital content will mature just like it will in every market, but we are a while off that yet.”
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and new games with similar IP has arguably shrunk.
A number of indie retailers are bypassing
distributors and are buying directly from the supermarkets.
As distribution continues to evolve, with new digital avenues and exclusive deals opening all the time, while the issue of price burdens the industry, what can the sector do to ensure it thrives over the coming years and beyond? To find out, MCVturned to key distributors. Read on to find out what they thought.
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