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MCV 13/08/10 41 SYSTEM 3’S DIGITAL STRATEGY All Systems go

2010 will see a major gear change in veteran UK publisher System 3’s strategy as it simultaneoulsy launches digital versions of each boxed game. James Batchelor talkes to CEO Mark Cale about this new initiative…

THE ONGOING debate over digital distribution’s role in the future of games seems to have painted offering games for download as an either/or solution. You either go boxed or you go digital. System 3 is determined to dispel this notion. Starting in September, almost all of the publisher’s titles will be released on both digital and physical formats in the same week. It’s an approach that has rarely been taken before, except for a handful of one-off Sony titles such as Warhawk and GT5 Prologue. Other games – such as Burnout

Paradise and anything on Microsoft’s growing Games On Demand service – have only been released digitally after spending a considerable time at retail. The first System 3 IP to use this strategy is Ferrari: The Race Experience. The game is due on PSN on September 15th – two days before the Wii edition hits shelves. It’s a risk, but the publisher is confident that only Ferrari can lead its latest initiative. “We needed to try our new digital solution with a big title to see if it would work or not, so why not Ferrari?” asks System 3 CEO Mark Cale.

“Downloads are not going to sell as many units as a retail copy at present, but I think that’s changing and we need to lead the way. We need to start the revolution because we’ve been foreseeing this shift for the last eighteen months – we’ve been planning this for that long. “We have titles ready for September and October to release as digital products across varying levels of gameplay style. Starting with Ferrari is a really good way of trying to launch this philosophy.

“If this strategy doesn’t work with a title like Ferrari, at least we’ll have given it a go. But I think the world will be surprised as to how promising this opportunity really is.”

EMBRACING DOWNLOADS Despite the fact that downloads have yet to match the sales volumes of retail, System 3 is firmly dedicated to its new digital push. But with the sector still arguably unproven, why make such a commitment to digital games at all?

MAKING HIS MARK: Cale believes System 3’s new approach to digital distribution is a sign of things to come

“There are two clear reasons,” he explains. “One is lack of retail space. The shelves are extremely competitive: any product released now might be on the shelves for four to six weeks, but then it’s replaced by another.”

The System 3 boss goes on to suggest that the rise of the pre-owned market is one of many reasons that consumers’ price perceptions are changing. “We’re now at a point where second-

Downloads don’t sell as many units as retail products today but I think that’s changing and we need to lead the way. Mark Cale, CEO

“Secondly, once you’re title is out of stock, unless it is in promotions, that’s it – your game is done. Typically in the past you’d get six months shelf life – you now get six weeks. And that’s really been a large contributing factor, as has the growing issue of second-hand games.”

hand games have made lower prices the norm,” says Cale. “Unless it’s a must-have

“It’s the same with some iPhone games. Angry Birds doesn’t have 3.5 million downloads for no reason – it’s the price point. If that game had been £1.99, I don’t think it would be half as successful. “I think we’re now reaching that point on consoles. However, the industry needs

like Call Of Duty or FIFA, people don’t accept games at £54.99 or £49.99 any more. They’re expecting to pay the same amount as a Blu-ray or DVD – they want to pay £15 or £25.

to be careful not to get into the position where people are expecting to get games for next to nothing because you won’t be able to afford to develop quality products.” The publisher is hoping to offer a price tag of between £24.99 and £29.99 for Ferrari. According to Cale, one of the many benefits of digital is that doing away with the box and discs makes it cheaper to produce more games. “With digital, suddenly you don’t need to sell at £54.99,” he says. “If you can pass on your savings – cutting out manufacturing costs, for example – you can go into digital at £29.99 or £24.99 and the consumer doesn’t feel ripped off. “What you’re losing through the lack of instant visibility and exposure at retail, you’re gaining by being able to protect your IP.

“And it gives you access to the user: 24 hours a day, seven days a week. The

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