Stardock CEO: Retailers killing themselves with digital distribution
by Justin McElroy 
{ Apr 20th 2009 at 10:15PM }
"Retailers need to be careful about this stuff," he said. "They're kind of signing their own death warrants once they push digital distribution at the store. Once you have the thing set up--once you've experienced how to purchase the game or deal with it online--why would I go back to the store for the next purchase? Especially if the store isn't providing added value. If you're a retailer, you're killing yourself."
... You know, on second reading, that kind of sounds like a threat. Hold on, let us check again. ... Yep, that's a threat.
[Via GoNintendo]
Reader Comments (Page 1 of 1)
winckle @ Apr 20th 2009 10:28PM
The thing about that is with the ridiculous points systems consoles have is that it is often cheaper to go to a store and buy a points card than it is to just buy the game straight through the console. Thus giving me the worst of both worlds, DLC with the download waiting time and real world shopping trip.
Charging in real world currency is one reason DD has taken off more on PC.
BananaBoat @ Apr 20th 2009 10:33PM
I don't know if it's for all games, but I think Amazon has some XBLA titles for sale with a real dollar figure beside them. I don't know if you'd save any money, but you won't have to screw with MS points anymore.
Ignatius @ Apr 20th 2009 10:46PM
Is it really that hard to understand that 80 points is $1?
Courtney @ Apr 20th 2009 10:55PM
@Ignatius, no, but it is a problem that I can't just buy 80 points (or 65, or 167) if I want. The points force you to buy more than you need, which I think is anti-consumer.
BananaBoat @ Apr 21st 2009 12:54AM
As someone that is fairly intelligent, I know that I can wait them out and get "points" for a discount over their face value (1600 points for 15 dollars, for instance) but damnit, it's just easier to buy a code from Amazon and punch it into my 360.
Ignatius mocks, but the entire point of "points" is to play into the whole poker chip mentality. If you aren't using real money, you are more likely to spend more than you would otherwise. Casino's were built and currently run on this principle. It isn't that people can't understand that 80 points is a dollar, rather that when they see a game, instead of going "Oh, that's ten dollars, I don't want to pay that", they'll go "Oh, it's only 800 points, ok, why not". It's dumb, but it works on some people. I do think it's anti-consumer to make 80 points a dollar and not 100 though. That's obviously to prey on the weaker minded souls out there that could probably have done the math if 1 point equaled 1 cent, but can't when 1 point equals....
....
....
Where did I put that calculator?
RankHypocrisy @ Apr 21st 2009 12:02PM
PSN uses a "ridiculous points system" called US dollars. You should check it out.
Nytemare @ Apr 20th 2009 10:26PM
I may not go to the stores to get stuff anymore, but that doesn't mean I don't window shop when I buy something from the website.
Popfrogs @ Apr 21st 2009 1:48AM
That's a good point. I wouldn't mind it if retailers only had floor models, zero stock, a muppet that knows a thing or two about the product and a kiosk in the store where you can order.
Kinda exactly the way Dell does it.
Josh @ Apr 20th 2009 10:30PM
So basically he's saying stores should avoid digital distribution because digital distribution is better than retail stores?
>.>
alessar @ Apr 20th 2009 11:35PM
I think what he's saying is that retail stores need to make it part of their overall strategy, and "add value" to the digital purchase and not just push people who come into the store to buy a code (as if it were a disk) and leave. After all, why go to a store to buy a box with a code in it or a code-card if I can just buy a code online? But make it part of a good shopping experience where there's a reason to be in the store and yet make the digital purchase. For instance, I might be at the store buying a strategy guide and picking up pre-order swag and oh btw the game itself is just a code.
That's not so bad... except that I would honestly rather just pre-order with Amazon because I've had problems actually getting my pre-order swag from GameStop. And the last time I wanted a strategy guide I ordered it right from the publisher, who shipped my copy to me before they shipped the book to retail.
Markez @ Apr 20th 2009 10:32PM
This reminds me of the one and only email FW I've ever received that I still enjoy to this day, I'll save that gem somewhere until I die. It's something like this, you get the point... http://www.rowthree.com/2008/05/23/van-damme-friday/ Also, I see Stardock, and always think spacedock. Which, is unpleasant.
On topic, I think those be waters that retailers better start testing out. They can't just stick their heads in the sand and pretend this trend isn't emerging and gaining more viability. Blockbuster would've been better served paying closer attention to what Netflix was doing earlier...
Courtney @ Apr 20th 2009 11:02PM
Stardock's point may be valid though. Stardock believes that retailers may be driving their customer's into competitors arms by encouraging them to change their buying behavior. Stardock clearly has a dog in the game as they have a digital distribution platform, but that doesn't eliminate Stardock's point. It would be a bit like Stardock encouraging people to buy games not published or made by Stardock.
Hopefully I just got you to read Stardock and think spacedock eight times :P
Markez @ Apr 20th 2009 11:14PM
Crimsonedge points out below that no one is going to go to the store to buy a game that requires them to download it. I think that's fairly accurate, no one is going to go to a store to specifically only to buy a game they have to go home and download. But I think they'll be able to capture some customers already in-store this way and perhaps make some extra sales. It's a way to snag some add-on sales from more progressive customers, maybe even a few dinosaurs. He's definitely got a point, I just don't think as extreme a situation as he's making it sound.
Courtney @ Apr 21st 2009 1:55AM
I was really just trying to make a joke, and you go and take it all serious...
Anyway, on topic, I saw another side of this, it's about the experience you can give the consumer and where you are willing to dedicate your resources. I would be surprised to see a traditional retailer match the top tier digital distribution platforms currently available (namely Steam, but I'm also becoming fond of GoG). I could buy and download games from Gamestop right now, but why would I? If I can get the same game from Steam, then I get all the perks that go along with Steam. If I can get it from GoG, then I get absolutely no DRM and I can do whatever I want with the game (install it on multiple PCs, etc).
I would just be very surprised to see a retailer match what those services can offer, or at least I think they would be very slow to catch up. In that time, they would be indoctrinating their customer base into accepting digital downloads, which could drive customers to other, superior download services.
I don't think that's the only way it could play out, but it does seem like a plausible scenario.
Premature ejaculation man @ Apr 20th 2009 10:33PM
Why wait so long to say this? The Lost and Damned came out months ago!
SoulBlade @ Apr 20th 2009 10:52PM
retailers who decide to push digital distribution may then decide to cut costs and reduce the number of brick and mortar stores they have - sucks for employees since they'll lose their job, but for businesses, it's much easier to maintain and cheaper once it's set up.
i don't think retailers will die - they'll just evolve to fit in. plus there's always the argument that gamers want something tangible so the brick and mortar may never go away..
crimsonedge38 @ Apr 20th 2009 10:58PM
Makes sense. Why would I go to the store to buy a game that requires me to download it? Once I go through that process once, I'll just stick to buying the game online.
Why is he saying this? Because he's pro-industry. He cares less about squabbling and competitiveness and more about the consumer. It's good advice. It's no different than the advice he gives to companies about pirates. If someone doesn't have an incentive to buy your product, why would they buy it? Why would they pay for something that they can get for free?
It's the same thing. Most game companies add in multiplayer, and that's fine... if your multiplayer is worth the price. Stardock makes it a huge hassle for you to get patches unless you have a legit registered CD-Key. That's smart.
Levi @ Apr 20th 2009 11:14PM
"Once you have the thing set up--once you've experienced how to purchase the game or deal with it online--why would I go back to the store for the next purchase?"
Cause I want to have the option of buying - and selling - used! I just bought Turok for $11.50 on eBay after shipping, and I'm looking at Eat Lead for around $20 - which retails for $50. It's often the way I get to try a lot of off-shoot titles that I end up liking more than the majority of gamers. I've liked the first hour of Turok!
I'm about to put up like 4 or 5 games on eBay, as well as my PS3 wireless keypad, and I expect to get over a hundred bucks for it all easily, when I'd be lucky to get $50 at Gamestop, let alone $ZERO if it was digital distribution. The only way to get back some money on digital distribution is to sell accounts, which isn't as easy as listing a physical disk.
Premature ejaculation man @ Apr 20th 2009 11:50PM
Your points are valid on their own. But, unless I'm mistaken, he's talking about retailers selling download codes.
Levi @ Apr 21st 2009 12:08AM
Yes, but he is saying that retailers selling codes is dangerous in that it will kill them. It will kill them because he believes people will not want to go val to the store after learning how easy it is to download - they will skip the store altogether. None of this would happen unless gamers favored downloads over discs - and I was pointing out why that won't happen, as long as there are people like me.
Though I'm more ok with it the cheaper and smaller the games get. I primarily mean this about console games, and this did branch off of Patapon, I assume.
Chesley @ Apr 20th 2009 11:33PM
On top of all that, I like having my physical copies, thank you. All that needs to happen is some kind of server crash or have my Internet go down and there goes my collection with it.
THE WICKER MAN (BWF) (GT: Dalek Prime) @ Apr 20th 2009 11:37PM
I would much rather download things then waste gas driving to the store. In addition to that down loads should be cheaper and friendly to the environment as no case or paper inserts are required. CUT OUT THAT GAMESTOP MIDDLE MAN! I say. I support downloads.
Virtuous @ Apr 20th 2009 11:59PM
If digital distribution catches on brick and mortar retailers will be cut out of the food chain. People that have slow Internet access can order games from online stores.
Popfrogs @ Apr 21st 2009 1:50AM
Yeah but there's still an angle here, you gotta buy hardware to play the software on.
AzzX @ Apr 21st 2009 12:19AM
Steam FTW.
Retail has been dying for a while now in regards to both software and media.
aj @ Apr 21st 2009 12:20AM
But I like not paying shipping and handling charges on everything I buy.
Also, I like going outside from time to time.
MaJoR @ Apr 21st 2009 2:15AM
There are two factors that I care about in regards to digital downloads.
The first is download rates. With US telecoms installing caps and keeping us eons behind other nations at internet speeds, our net is slow enough that alot of the time it is just faster to go and buy the thing. And if you are already going to that store anyway or the store is close by, you could have the entire game bought in your possession with no added time to your day. It would take an insanely fast connection to compete with that.
The other is the oldest complaint in the book. No physical copy. I still have all my old NES games, even though it is in need of a new 72 pin connector. No matter what happens in the company, whether nintendo goes bankrupt or takes over the world, it doesn't matter, I have them forever. But with downloadable content, if the company tanks or something, you could be no longer be able to play your game. Imagine what happens to an old game that you downloaded years ago and you reformat. You go back to renew it on your new machine and... it's not there. They ended support for it and whipped it clean. Oops. I still like that no matter what I have physical copies of my games.
Sidebuster @ Apr 21st 2009 2:45AM
Then I guess it is time to move on and maybe learn from your mistake. There are tons of other ways you wouldn't have or be able to play that old game. Like if the game doesn't support your hardware. The disc is too scratched to read. You just lost it. etc.
I'm not trying to side with anyone on the debate, but I've done both Digi Distribution and Physical. Both have their benefits.
Physical-
GOOD- you get a real copy of the game on a disc
BAD- you can waste gas, time, etc.
Digital-
GOOD- You save a trip and maybe taxes
BAD- Long download so you don't get to play right away. and the chance of losing the game forever.
Nox @ Apr 21st 2009 8:34AM
I prefer a physical copy but Stardock are doing something that suits me fine.
You can download online and they mail you the pshyical copy. Hope others will pick this idea up.