With the majority of games now being bought online, GAVIN MANNION gives his perspective on how this will change the gaming sector in the future.
EA Games now earns 76% of their income via digital means. That number proves that digital is a viable future for games companies. More significantly, it suggests that the days of buying games from brick-and-mortar retailers could come to an end.
I for one love the idea of buying my games online and having a huge online library that can’t be stolen but I also think there is a huge risk to this idea and one that could devastate the industry in a few short years. Here is my prediction of what will happen locally and why this blessing will turn into a curse for the vast majority of the gaming industry.
Over the next 2 to 4 years local general retailers like Musica, CNA and Look & Listen will stop stocking video games as the market will appear to shrink, with more and more people buying games online. This will result in the balance of power switching locally from retailers to media as more purchases are made online and the impact of retailers will fade.
Specialist retailers like BT Games and online retailers will continue to thrive It’s at this point that all consoles get patched to no longer accept second-hand games.
4 6 Years
With publishers now earning 90% of their income via digital sales and the media having more of an impact than ever, the brains at the top decide to withdraw local marketing budgets from the regional distributors and rather funnel it directly into the top media worldwide.
Indie developers start suffering as the profit sharing from the publishers, who now own the platforms, becomes excessive and the only indie titles that are seen are mass-market titles.
This quickly destroys the emerging market media and concentrates all media coverage to the EU, Australia and USA. With a clique of 30-40 media outlets exploding with the increased revenue. The lack of advertising money hits the specialist retailers just as hard and they quickly either become generic technology shops or close up.
Unfortunately as the first world economies are still well supported this destruction of the industry in other countries goes widely unnoticed and no one reports on it. The only news that is noticed is that all video game exhibitions stop running. With no retailers or media to impress they are no longer justified.
6 8 Years
Videogame sales in emerging markets and smaller economies slow down drastically as the mainstream users never see any media coverage of the games and quickly begin to lose interest. The online retailers stop stocking the games as they are now costing more to store and ship than they can justify.
The publishers don’t care as their profits are higher than ever and they begin to cut back on which media outlets receive funding: this is based on size of audience and how good their working relationship is with that outlet. By the end of the 8th year the number of media outlets has dwindled to 10 with some going bankrupt and others merging together.
2 websites remain with the other 8 being split between broadcast and print. The 2 websites are both owned by a media conglomerate along with half the remaining outlets.
8 10 Years
The next generation of consoles is shelved with the hardware companies refusing to invest more in an industry where their profits are plundered by publishers and with them no longer having much chance to sell peripherals and accessories for their consoles. The publishers profits start to shrink which results in the owning corporations plundering them for their assets before selling them off to the new Chinese mega corporation with more money than brains.
The remaining media outlets start shrinking and the industry we know and love goes into a 10 year recession before being saved by a new upstart, selling plug-and-play games in all retail outlets around the world.
We’re all too old to enjoy the new found gaming sensation and slink of to die miserably‚Ä¶.
Or we take some advice from this lovely lady on the side and try relive our youth only to realise it was better in our day and if we had just paid more attention and not been so eager to save a buck back in 2014 things would have turned out better.
Unfortunately since everyone only cares about themselves and would rather bulk import games to save R50 on each title than support local companies I simply can’t see how this future isn’t going to turn out this way.
* Article courtesy of Lazygamer.net. Follow Gavin on Twitter on @Lazygamer