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GameStop: Digital distribution is not a threat

GameStop: Digital distribution is not a threat

US retail chain Gamestop says it isn't worried by the growth of digital distribution systems like Steam.

US retail chain GameStop claims that it isn't worried about digital distribution systems like Steam, Impulse or Greenhouse and that such services can't rival bricks and mortar stores. The comments came in an analyst note from Sterne Agee's Arvind Bhati, according to Gamasutra.

In the same statement GameStop also said that it was expecting major price cuts for both the PlayStation 3 and the Nintendo Wii in the near future - probably before Christmas.

"Management believes that a meaningful PS3 cut is highly likely in the near-term," claimed Bhatia, who went on to indicate that the price cut may be as large as a $100 USD discount to coincide with the launch of Madden NFL 10 in August - something that'll probably please Activision no end.

GameStop claims to have done an in-depth study on services like Steam and said that a solid market for digital distribution will not exist until 2014 and that even then only a quarter of the population will have the technology to access full games.

GameStop also believes that a number of issues, including spiralling costs and the niche nature of the market, will prevent digital distribution from becoming a threat in the short term.

Bhatia said that there won't be a huge push to pursue digital distribution on the behalf of publishers either, with many customers having an expectation that digital copies should come at a lower price - something that won't exactly encourage publisher interest. Of course, that seems to be skipping over the idea that if a game is being published digitally then there may not be a need for developers to sign with a large publisher anyway...

As for whether or not the market exists or not, while it's understandable that a large proportion of GameStop's audience is in a demographic that won't be aware of or specifically targeted by services such as Steam, that view could be ignoring the growing number of gamers who turn to digital services they trust before resorting to normal stores. With major publishers like Electronic Arts launching there own store and with Microsoft about to roll out a digital-only storefront for the Xbox 360 it seems like GameStop may be in the minority who think that digital distribution isn't going to take off.

What do you think? Let us know your thoughts in the forums.

10 Comments

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liratheal 22nd June 2009, 13:06 Quote
Nice to know they've got their head firmly buried there.

I sort of hope they go down the **** pipes :/
The_EXorcist 22nd June 2009, 13:31 Quote
I personally prefer a hard copy of a game, just something about the feel of the box, the manual the whole lot. But if digital sells it cheaper... then im going with digital
Stelph 22nd June 2009, 14:43 Quote
Hes not wrong, there will always be a place for Hard copies of games so in the UK shops like game and gamestation shouldnt be too worried about online distribution only services like steam ect, what they should be worried about however are the online only stores like play.com ect who regularly undercut their prices by £5-£10 or more. Sometimes I wonder if the only thing that keeps these stores afloat is the 2nd hand games market
naokaji 22nd June 2009, 15:08 Quote
They are partially correct.

Currently digital distribution is indeed no threat to the retail business for anything beyond music.

Games (Movies as well) are simply too big in filesize for the current infrastructure the internet is based on outside of Japan and about 3 select european countries.

Then add in the fact that often the price for digital distributed media is the same or higher than in retail and currently it does really not pose a threat.

However, once the Government and the Isps agree to who has to cough up the money to make widespread fiber to home reality digital distribution will take over.
iPEarl 22nd June 2009, 16:38 Quote
Not every one Owns a $39-$89 600kb/s internet connection.
I certainly only have DSL 75kb/s and online distribution is taking days to weeks to download.

So i preferre a Hardcopy and install that and download the needed patch which takes about mins to hours.

Pretty sure most hardcore gamers do have fast internet but the other 50% casual and minor aged gamers will have slower connection, and will need hardcopy distribution.
SMIFFYDUDE 22nd June 2009, 17:20 Quote
It wil be years before digital distribution be comes the norm. So many people have crap connections (like me) to the internet that downloading would take several days to complete. 5,10,15 GBs of game at 60kbps is never going to happen. So it doesn't.

But even buying hard copies doesn't always mean a download free install. Half-Life 2 is the first game where I bought the dvd rom only to be shocked when i had to download most of the content from steam, and that was when i still had dial up. Even today on my broadband it takes 5/6 hours.

And what about kids, they can't buy online cos they don't carry plastic, so another barrier to digital distribution.

Digital distribution will only become king when people can use it, and I can't see that happening for at least a decade, and i'm only thinking of the UK.
Ape 22nd June 2009, 18:07 Quote
Play.com & Steam.

My life is pure bliss without bricks and mortar.
rollo 22nd June 2009, 19:14 Quote
id prefer a disc and box also tbh. Hard copy all the way. digital distro is useful but it wont blow away the hard copy for a while yet
ZERO <ibis> 22nd June 2009, 21:09 Quote
For as many problems as steam has had and does have it did get one thing right and that is the distribution.
dicobalt 23rd June 2009, 00:53 Quote
In other news Sterne Agee's Arvind Bhati was found with his head stuck in a hole in the ground loudly voicing the words "La la la I can't hear you."
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