DISTRIBUTION SPECIAL OPEN VS EXCLUSIVE
The debate over exclusive distribution deals and the open model continues, with the latter allowing multiple firms to distribute the same product. We asked for distributors’ views on the matter.
“We work very hard for our exclusive partners, investing heavily to make sure that product
launches are as successful as possible. Exclusive distribution has also allowed us to put in place street date agreements with our customers that have helped level the playing field for all concerned. Other benefits include a single point of contact for our customers, enhanced marketing programmes to support releases and our Xbox Portal for indies which offers exclusives, competitions, bundles and promotions.”
Darren Houghton, Gem
“Open distribution is the only way forward and the recession will make the publishers explore this
avenue’s potential even more.” Paul Williams, Ideal Software
Direct2Drive, Green Man Gaming and more offering direct-to- consumer games and codes. But should physical product distributors be concerned of these business models or embrace the digital aspect?
“There will be an ongoing shift to digital distribution, but I believe there is still a place for the high street, similar to how music has gone and film and books are shifting at the moment,” Interactive Ideas’ marketing manager Andrew Miles tells MCV. “We haven’t seen any negative impact in our business so far and our sales of physical software and peripherals are up year-on-year.” Koch’s McNicol adds: “I see the
High Street and digital distribtion as symbiotic in may ways, however it cannot be ignored that the casual market has moved to iOS.” Creative Distribution is confident there will always be a place for box product – especially console games. “Digital is certainly more prominent than it was a year ago, but boxed product is still selling very
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“I prefer exclusive distribution where possible as it prevents reductions in price just
to win business – hence the erosion of margin and, in many cases, customer service.”
Steve Walsh, Meroncourt
“Keyne support open distribution. We find customers like to have a choice when they buy
their stock, especially when some of the other official companies have such high prices.”
David Jones, Keyne Distribution
“I can see the pros and cons for both options. However, in the current economic climate a
smaller publisher may suffer if they are exclusive with a distributor who also has larger exclusive deals in place, as credit limits are quickly used up. All medium and small- sized publishers would benefit from an open distribution model thus leaving all routes to market open to them.”
Mark Williams, Bright Red
well,” Lewis tells MCV.“I think the PC market has seen the strongest shift, whereas console has not yet been massively effected. We have seen no dramatic changes in trend.” Others believe distributors can’t change what is happening, just adapt. “We are a reactive company and hence must be able to maintain quality service and an improving range of titles at the right prices,” says USD’s director Dave Cotton. “DLC is a phenomenon we have no control over. We can however ensure all our boxed product customers are happy enough with the service we offer to repeat buy.”
THE BIGGER BOXING RING Since the demise of distribution giant EUK two years ago, the market has seen more distributors enter the ring, opening opportunities for new services. However, some believe price cuts and the amount of emerging firms should be monitored. “It would be nice to put a ban on prices being slashed at all levels of distribution through to retail,” says David Jones of Keyne’s export sales.
HELPING INDIES
With independent game retailers feeling the heat from lower prices at bigger national chains and supermarkets, MCVasked distributors what they’re doing to help the independents.
“Third party accessories have a much higher margin. We’ve seen more interest in licensed
merchandise which make impulse purchases and have good retail price points. This creates an increase to the retailer’s revenue stream. An indie will make more money on a £10 plush toy than a game at £39.”
Chris Malone, Impact Global Solutions
“We have introduced several deals exclusively for independent retailers. Our ‘Day Three Delivery’
pricing offers a better price on triple- A titles delivered on the third day after release. This month we offered ‘Complete A Game’ where the final game in any carton is free. For example, buy 14 PS3 games and get the 15th free. This is all part of our
“And also a ban companies offering ridiculously low prices, not being able to keep their heads above water and going under after taking companies’ money, just to resurface down the line with a different name.” The market is also changing in other ways. With sales of the Wii slower of late, there is less demand for budget Wii accessories and games due to their sheer quantity, making space for more premium quality products. AntiGrav’s Robert Orchard adds: “The Wii delivered huge growth for the sector but was also responsible for the resultant flood of ‘throw away’ white plastic accessories. “As the next generation of consoles take the lead, we have to ensure that products we offer reflect the change in market and the more savvy gamer who is more focused on quality as opposed to the often gimmick-led offerings.” And it’s this kind of clever, reactive decision-making that the distribution sector has to embrace to ensure it remains the lifeblood of the industry for years to come.
commitment to providing extra value to the independent market.” Adam Harris, A Game Distribution
“There are many
additional products that retailers can sell in keeping with the video
gaming genre. This allows retailers to maximise their potential earnings. Our video game-themed T-shirts which we started selling last month. These have proven to be a great seller and an additional stream of income.”
Craig Lewis, Creative Distribution
“The market is changing and independent games retailers need to find new and innovative ways of
engaging with their audience to ensure repeat custom. This can be done with new products that will appeal to both a gaming and lifestyle audience. One such product is TwistDock, an elegant PS3 stand, charger and advanced cable management system. This facilitates the customer’s experience and tidies their living room.”
Richard Marsden, Realtime Distribution
INSIDE THE BOX
MCV delves further into the market with a profile on each of the following distributors:
Koch Media...............................................p30 Gem................................................................p30 Realtime Distribution.........................p33 Creative Distribution..........................p34 Interactive Ideas....................................p34 Sony DADC................................................p36 Meroncourt...............................................p36 AntiGrav......................................................p38 Impact Global Solutions...................p38 Bright Red Entertainment.............p40 United Software Distribution.......p40 A Game Distribution ...........................p44 Ideal Software.........................................p44 Keyne Distribution...............................p44
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