It doesn’t get any cheaper

Money speaks all languages. It says 'goodbye' to me in all of them. It’s an awkward time for games-publishers as the industry and market performs a very slow and protracted migration from physical retail sales to digital distribution.

You might think that with an increasing percentage of copies of games titles being sold via digital distribution channels that the publishers’ costs would be falling. Well, it isn’t getting any cheaper for them.

For physical retail-sales games-publishers require staff to handle manuals, deal with distributors, woo and schmooze with the big retail chains, design and proof materials for boxes and for in-store advertising, deal with printers and disk-duplicators and more.

And those costs don’t go away whether the publisher is making 100% of its sales through physical retail, or just 1%. In fact, the costs are likely to rise for the publisher as they lose the economies of scale for shorter manufacturing runs.

As long as the publisher is making at least one copy for sale on a store shelf somewhere, there are costs that aren’t going to go away.

Therefore, it is to the publishers’ disadvantage for the transition from store-retail to digital distribution to take any longer than it has to. Unfortunately, the infrastructure for digital distribution channels still aren’t up-to-speed (literally and metaphorically), and the costs of going entirely digital – for a big publisher – still outweigh the costs of supporting physical retail. For now, anyway.

It’s an annoying transition phase where nobody is really doing as well out of things as they could.

2 thoughts on “It doesn’t get any cheaper”

  1. A year ago buying PC games via Steam and Direct2Drive, and some select full 360 releases via Games on Demand, felt like a rapidly approaching reality of the only way I’d be buying games.

    In a year’s time though my bandwidth suddenly has a monthly cap where it hasn’t for the past ten years. My last digital download purchase from GameStop required a 4 dollar “download insurance”. Direct2Drive has a similar “download protection” which like “download insurance” guarantees I’ll be able to download more than once for some time.

    It seems like digital distributors and telecoms aren’t going to let us get by without crappy new policies every now and then going forward.

  2. You can thank Netflix streaming for that one, Ezra. It was a good idea to offer streaming video content, but it turned out to be just another revenue opportunity for data carriers. The days of unmetered Internet are numbered, again.

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