Digital future will be bad for console gamers

Australian PSN and Xbox Live users get the jitters when some point to the inevitability of digital downloads. Let's take the PSN store for example, for a quick comparison of some new and upcoming releases:

PSN:
Call of Duty: Advanced Warfare - $99.95
Lords of the Fallen - $89.95
PES 2015 - $84.95
GTAV - $99.95

Now here's the comparable prices for disc editions from major retailers:
Call of Duty: Advanced Warfare - $59
Lords of the Fallen - $79
PES 2015 - $84
GTAV - $79

For some, the difference is minor or non-existant, but for major titles, the differences are huge. A near $40 difference for the latest Call of Duty is two thirds of a new release game. All this comes to a lack of competition. PSN and Xbox Live are closed systems, and unlike PC models of distribution, their digital stores have no alternative - it's locked to the system you own.

To appease publishers, Sony and Microsoft let publishers charge whatever they want on their respective stores. Even older games are not immune, with digital prices for 12 month old titles showing little difference from release date pricing.

Compare this to the competitive landscape of retail, and the differences are night and day. In week one of a new release, a distributor may sell a new release game to a retailer for little margin - at around $60-$80. In an effort to shift more copies, publishers will also offer rebates to retailers on games sold to sell at cost. This guarantees cheaper prices at launch, and stiff competition between retailers ensures net benefit to the consumer. By week two, the cost of a new game at wholesale can sometimes drop as much as 50%, depending on the title and its first week of sales. These prices are then reflected at the counter to consumers.

Meanwhile, PSN and Xbox Live retain a steady, high price for games well after the initial release window.

As digital downloads become more and more popular, the price we pay for our games on digital stores doesn't seem to change. This is despite the fact that distribution via digital should be a huge net saving to publishers. While we all rush headlong into the digital future extolling its virtues, maybe we should take stock of the fact that we are really seeing the rise of a monopoly retail model, which will hurt us all in the end, and will damage the industry.

[jackanderson1985]

ok fair enough from an aussie point of view that's bad but in Ireland it's opposite... you'll almost always find Digital to be cheaper than physical here.

i think the worst so far has been Trials Fusion nearly 50 euro in shops (after nearly 7 months it's still 45 euro), 20 euro on the online xbox store, 30 euro (43 aus dollars) difference is farcical

and it's not just limited to that COD was between 5-10 more expensive, lords of the fallen 10+, Sleeping dogs nearly 15 and so on and so forth

on a personal front there's no benefit to physical for me, i'm lucky enough to have a ridiculously high internet cap, good speeds, never trade in

[LightofDarkness]

Not from my perspective, next gen consoles in Ireland have huge E-shop mark-ups compared to their physical counterparts, particularly third parties on PS4. Most games are about €10 more expensive in many cases.

Compare this with PC: I just bought Far Cry 4, Dragon Age: Inquisition and Valkyria Chronicles for €107 total on GreenManGaming. You're paying about €160 for those on console digital at best.

[annoyedgamer]

Here in the USA, its costs a full $60 for digital up to 2 years after release while the physical editions are available for $30.

[colonel179]

That's why I don't like digital so much. They save production costs, as well as distribution costs, and others, yet, the price is the same as retail. That's a ripoff. That's the biggest flaw in digital games.

Retailers need to get rid of inventory, so they need to discount items that don't sell well (or as expected). That's why they reduce price quicker.

With that said, I had to buy Shadow of Mordor digital, because where I live, the price was too high, and somehow, the price of PSN was cheaper than anywhere I saw it available.

I usually buy the games $10 cheaper than retail price, but Shadow of Mordor was an exception I guess.

[ShaunCameron]

It must be the server costs. It cost money to keep the servers running at an optimal level so downloading won't be too much of a hassle.

[caseh]

@ShaunCameron

It's a charge for bandwidth, Sony take a cut of every game sold so the digital prices tend to be higher to cover that cost.

[Oschino1907]

I often get discounts on my digital games in the U.S. many times day 1 brand new games. Amazon and brick/mortar also sell digital so that's even more chances to take advantage of deals.

Also if games as still $60 for up to two years explain why every single launch game up to summer on PS4 has had there prices lowered permanently.

Here are some lower prices now with no current special sales. Most have been discounted even further during past few months of specials.

Lego Batman 3 - Pre-order $53.99-67.49(deluxe bundle)
Assassins creed 4 - $49.99
Battlefield 4 - $39.99
Injustice - $29.99
Killzone - $29.99
Knack - $29.99
Madden 25 - $29.99
Need for speed - $39.99
NBA live - $29.99
Tomb Raider - $39.99
Thief - $39.99
Cod Ghosts Gold Edition - $59.99
FFXIV - $39.99
Infamous - $39.99
EA Sports UFC - $39.99
A few others from summer but unsure if they launched at $49.99 or $59.99, and not sure of all indie pricing.

Plus many others still full price have had multiple sales and as I said often new ones can be had with discounts also.

[annoyedgamer]

Because retailers are having a hard time moving games due to the hardware users spread thin at the beginning of the new generation. Keep in mind those prices are matched to the physical copies. I guarantee you the day those physical copies are no longer distributed the games will be selling for $59.99 for months.

$69.99 in the case with greedy EA, they will make their "deluxe" editions standard and raise the price.

Steam is proof that once users are hooked on digital, sales become less and less valuable. The sales Steam offers are nothing compared to the discounts given out earlier in its life span.

[MadLad]

It's the issues of a closed and lorded platform.
As a PC gamer, I am all for digital. There's so much competition, some of the prices you see are crazy.

I like digital, but that doesn't mean I want to see physical copies done away with. I have no idea what the console space would look like then, but I don't see it being very good.
Not unless they allow for 3rd party stores themselves, which I see never happening.

[Oschino1907]

You can take advantage of 3rd party deals on console digital though especially pre paid cards. You can buy the game codes or digital/physical pre paid cards from Amazon or many other retailers if they have sales/deals.

I only see better deals becoming more widespread as they start to compete for digital sales. Of course it all goes through Sony at the end but at least there is no Origin and such.

[SegaGamer]

Personally i don't see why we can't always have physical and digital as an option. Moving fowards doesn't mean one way needs to go.

[colonel179]

Of course it doesn't need to go, but publishers will always prefer digital over retail because it's a lot cheaper for them, and since consumers never demanded to lower the price of digital, they get higher profit margins.

It's not that they need to go, it's that Sony, Microsoft and publishers will make retail go as soon as possible. That's why the Xbox One was announced they way it did. Microsoft was the first one to dare to make a digital environment for gaming. Fortunately, they failed miserably, however, they won't rest until it happens.

[CaptainObvious878]

This.

People are always telling me digital is the future and I need to accept it.

As a fellow Aussie that can agree with this blog I say, screw you I'm never going digital.

[Brettman2008]

Unfortunately, gaming seems to be heading towards a game streaming future which may be the only way to play in a decade or so. Sony, in particular, are really pushing this. I dread this gaming future.

[ShaunCameron]

But it often does. Out with the old, in with the new.

[HighResHero]

Exactly. I buy mostly physical and DRM free GOG games. I also buy on Steam sometimes and see no reason why it has to be one or the other.
A lot of it might have to do with marketing. Companies trying to maximize profits by forcing new paradigms upon people.

[Amuro]

if you want digital only then Steam is the only viable option to be honest. Digital on consoles is not only a scam but often have pesky DRM too.

[knifefight]

GOG.com is also wonderful if people are looking for digital-only stuff.

I'm not saying I prefer digital (I don't), but if I'm going to buy digital anything, it's going to be for super cheap and completely free of DRM, like it is on GOG.

[deadpools_n64]

I prefer physical. I'm not always close to an accessible Internet connection at the oil rig so my gaming is purely offline and couch co-op when I'm at work for 14 days straight. So that's why digital and drm are my biggest fears as a casual gamer. Also why I skipped out on titanfall and Diablo3

[Kavorklestein]

Like a few others have said, all digital is not the way to go for some, and all physical is not the way some want to go either... especially with so many new games requiring day one patches, downloads, and updates. In fact, some games are STRICTLY digital titles, with no retail copies made available. (Arcade or Indie titles)

So, basically, if the digital prices were more frequently discounted similar to Steam, or were more competetive with retail pricing for Physical copies, also a common occurrence on Steam- then most people wouldn't even be complaining about this stuff in the first place...

I think the sweet spot and solution to this problem is really putting pressure on the Console manufacturers and Service providers to create New standards and policies with devs and studios before putting a game on the digital marketplace.

Be it PSN, or Xbox Live, they both need to present a more fair digital marketplace experience for consumers, (Not just have sales events with limited time discounts, but lowering prices more often, and more fairly depending on demand, and sales trends) especially since they are already offering such small hard drives and demanding such large game install sizes this Gen.

The trade off needs to be fair/balanced on at least ONE of these fronts in my opinion.

[BitbyDeath]

That is true for 3rd parties but for the 1st party games it is the other way around in Australia. eg.

LBP3 -

$94 from JBHifi - https://www.jbhifi.com.au/g...
$79.95 from PSN - https://store.sonyentertain...

The Order -

$94 from JBHifi - https://www.jbhifi.com.au/g...
$79.95 from PSN - https://store.sonyentertain...

inFamous SS was also cheaper on PSN when it had come out.
Moral of the story, buy 1st party games day 1 and leave 3rd party til they drop.

[bunfighterii]

I've noticed this but if you monitor it, those JB HiFi prices will drop day one, I guarantee it.

JB and other retailers often take pre-orders on RRP or near RRP prices, but come launch day when all the retailers like Target, Kmart, Big W and Dick Smith start advertising prices, watch JB's price drop.

Those pre-orders at $94 won't pay that when they pick up their game, or when it gets delivered, they'll only pay what JB are charging on the day.

Something else I didn't mention in the blog is price matching - most retailers will price match with their competition, so even if the advertised price is $94, you can still go get the game at JB for $69 or $79 if that's what Dick Smith are selling it for. This is impossible in a closed digital store - it's all about a lack of competition.

[kstap33]

I prefer digital. I'm not interested in scratched or misplaced discs. I have kids.

[hazelamy]

i would say a digital only future would be bad.
digital as one of the options, is good.