Will Luton believes GAME’s struggles are a sign that retail is no longer one of the lynchpins of the industry, and that a powershift towards digital is emerging
AS YOU ARE READING this (in the future) the fate of retailer GAME has been determined. Here in the past, as I write these words, it has hit the wall and come out the other side with Opcapital, albeit slightly slimmer. The retailer’s downfall has been blamed on a host of surmountable problems including over expansion, erosion of customer service policies, poor web presence and an out-dated retail experience. These are all solid assumptions, so it is likely a new management team can return it to profitability like its overseas contemporaries. Yet one factor that cannot be ignored is the impact of digital distribution.
HIGH STAKES The gamble on GAME is one on how long it can continue to make money from selling access to games through physical artefacts, whilst online and supermarkets muscle in with the same model and digital slowly undermines it. This kind of erosion isn’t unique to GAME;
it is a concern for every single company that delivers a digitisable product in a physical form on the high street. Film, music and books are at various stages of the transition to complete digital distribution. Digital distribution in games is of course
already here, but so far is only seriously impacting non-traditional content, such as short-form arcade-like titles. Long-form cinematic console games continue to exist in a bubble almost away from these changes.
12 | MAY 2012
Why? Because the prices are set in favour
of the retailer middleman. The technology is here, as PC gaming via
Steam or other direct download portals continue to show, but pricing remains on a level or higher than at retail, despite ostensibly lower overheads.
It is still more expensive to
download a title over the internet than to walk to the high street and purchase it from a living, breathing human.
It is still more expensive for customers to
download a title over the internet than it is for them to walk to the high street and purchase it from a living, breathing human, on a manufactured disc, inside a box that has been transported thousands of miles to be placed on a store shelf in a heated bricks and mortar building. This is clearly wrong. Consumers, the least
loyal people in games, know it to. When prices on digital marketplaces
realign in reflection of drastically reduced overheads, new business models thrive and innovative content appears. We have seen it in social, mobile and independent PC
markets. But console and handheld gaming is mostly untouched.
OPPORTUNITY KNOCKS The transition may not be good for existing businesses which have heavy investments in retail and development infrastructure, but it is good for consumers and new, hungry start-ups entering the industry. There is a real chance that if the console
space doesn’t embrace digital properly soon, someone will come and take the money Sony, Microsoft and Nintendo are leaving on the table. Google, Apple and Valve are all tipped for an assault on the living room in the next 12 months. This could be a serious threat. As the old
world still looks towards more power and more polygons, they could get undermined by better, easier distribution and prices. GAME’s stumble, caused by erosion from
digital distribution or not, should not be ignored. It is an indication of waning retail importance in our industry. The power shift has started and will have huge repercussions. Do not ignore it.
Will Luton is creative director at the award- winning boutique studio Mobile Pie. They create delicious own IP and work on licenses, with a partner list that includes the BBC, Orange and Hewlett-Packard. Follow Will on Twitter at @will_luton, or visit www.mobilepie.com