Recently, Gamestop released their findings regarding how much people are spending on digital copies of games vs. physical. Their finding were no doubt shocking to them as people were spending $22 and people said that they would prefer to spend $35 on a newly released digital game as opposed to the $60 at retail.
Gamers have been talking about for years now on when digital copies will be priced differently than retail as it’s a very sticky situation for all parties involved.
Digital Value:
It’s been talked about for years that video game prices should have gone down with the move to digital copies for several reasons. One is that you don’t have to spend as much manufacturing copies, shipping them to stores and of course paying the stores for prime shelf space.
However that wasn’t the case and the last generation saw an increase in game prices in the retail market with some developers trying to get more money such as EA’s project ten dollar where buying a game used would require you to spend more money to unlock all the features.
What makes deciding the value of digital copies tough is that the pros do outweigh the cons for a lot of people. As we’ve talked about on the podcasts a lot, digital copies are a godsend for people with limited space. Hell, I have over 800 Steam games and I can tell you that I would not have the space for 800 boxes worth of titles.
You also have the advantage of never having to worry about lose CDs, having your progress available anywhere thanks to the cloud and the ease of patching and updating. The only downside would be the loss of control over the copy of the game but there are far more positive cases behind digital than there are negative.
And this presents the conundrum for digital vs. retail — Digital copies cost less to produce and therefore are cheaper, however the benefits they provide to consumers makes them more valuable to gamers in most cases.
Steam has been great at reviving the PC market and at the same time completely destroying the retail and trading market for it.
Making things even more confusing is that developers have been cutting back on retail packaging which further drives down the value.
Gone are huge manuals, great box art, bonus collectibles and so on. The only developers who continue to provide a lot of value to retail would be Atlus and Blizzard when it comes collector’s editions.
Going back to the topic at hand and whether or not digital copies should cost less than retail, this has me worried as when it comes to trying to raise value, most developers are about cutting than adding as we’ve seen in the past.
Less is Less:
Over the last generation, developers have been doing whatever they can to squeeze extra money out of consumers. From DLC, season passes, project ten dollar and even selling cheats. All this was designed to add more to an already high price per title in order to compensate for game sales devaluing titles.
With consumers less likely to spend full price on a retail game, a part of me wonders if developers will try to push DLC more in an attempt to make up for the sales. This also means publishers will be even more risk adverse to new ideas as if they can’t get full price for the popular genres, what’s the chance that a new title will work?
Season passes and DLC have become popular ways for developers to try and get more value out of their games.
What’s very interesting is if this will have any impact on Indie and AA developers who are already pricing their games on the lower end of the scale. When I interviewed Jeff Vogel from Spiderweb Software, he talked about how the average price for an indie developer to stay afloat is around $20. If the AAA market goes down in value, it stands to reason that people will expect both the AA and Indies to go as well.
The problem is that for many indie developers, they are already on that line between making a profit and staying afloat. And we are already facing an issue of devaluing titles before the AAA market gets pulled into the mix.
But there is still one big problem that is facing all of us when it comes to getting games for so cheap and that is actually being able to play them.
Finding Time:
This Black Friday, I bought a Wii-U on top of my regular digital sale purchases including games like Alien Isolation and Shadows of Mordor. Between them and the other games I’ve bought for previous sales, I’m at a point where I literally don’t have the time to play everything and it has reached Twilight Zone levels of an ironic twist. And I know that sounds like a “horrible” problem to have, but this does have repercussions for game developers.
This Black Friday was very productive for me but has left me with more games than I have time to look at.
For people like me who are so full of games to play, why the heck should we spend $40+ on any game? The answer is that there is no reason.
Having so many titles to play has really affected my buying habits and with exception to titles from companies that keep their value: Nintendo, Blizzard etc, I don’t spend full price on video games anymore.
This also has the consequence that I cannot play any MMO as dedicating that time to just one game wouldn’t be fruitful for someone who has to examine multiple titles. The recent sales on World of Warcraft and Guild Wars 2 were honestly really tempting, but unless I can clone myself I wouldn’t have the time to play them.
The consequence of having too many games is that new games coming out will be facing a market that is too full of titles for people to want to spend a lot of money on. And with developers and publishers counting on that first month of sales could spell doom for anything that isn’t a Call of Duty sized hit. Eventually this will start to affect games being bought on sale as at some point, we will own everything that’s worth buying.
Changing the Game:
With stores like GameStop finally getting results showing the devaluing of games in the consumer’s mind, it will be interesting to see how they will try to respond to either get more value per purchase or get more money from consumers. But as I keep saying, I do feel that at the rate we’re going, the AAA Game Industry is going to be smaller by the end of the decade and it’s just a matter of time before we start to see developers drop.
