Publishers are Poisoning the Digital Distribution Well

[Miko]

Surprised noone has brought up the EA vs Valve deal with Crysis 2's removal and other games that were once going to be steam launches from EA vanishing from steam but going to its competitors instead after EA basically shit on Valve over some DLC scuffle and the launch of Origin.

 

[Agent_5]

When we did The Ball we had originally set out to do it digital only. And we had said "20$ is about fair for a Steam title like this". And then the retail distribution deals came. If we would have told them "Yeah you can distribute our game but we want you to price 35$ for it while we will sell at 20$" they would have laughed at us and we would have never been able to sign such deal. And this is even true for large publishers. They may have their own distribution networks, which takes some of the difficulties away, but they will still have to talk to Walmart and such. And they cannot possibly tell Walmart "please sell our game for us and give us a really good location in your shop but you must sell it at 150% our price"... Not going to happen.

Super Meat Boy Ultra Edition (PC) retail - $20
Super Meat Boy from Steam or D2D - $15.

Super Meat Boy (Xbox) download code at Best Buy or Gamestop - $10
Super Meat Boy on Xbox Live - 1200 MS points, or $15

The $5 difference obviously only applies to SMB and is not the usual trend, but I'm still perplexed by this abnormality. Is the MS point conversion accurate?

 

[elmuerte]

SMB and SMB Ultra are different products. SMB Ultra contains the soundtrack, a poster, 40 page comic thingy.

 

[Sir_Brizz]

That's what retailers typically do with DVD releases, too (special pack-ins that are exclusive to the store).

 

[ambershee]

You make good points, however, I think this culture is what is fostering the growth of the used games market (which makes Gamestop profits soar through the roof) instead of putting money where it actually belongs: in the pockets of the content creators.

Except that generally all trade-ins generate store-credit, which then will be put forwards towards the acquisition of new games?

 

[Sir_Brizz]

Except that generally all trade-ins generate store-credit, which then will be put forwards towards the acquisition of other used games?

Fixed that for you.

 

[[GU]elmur_fud]

This is not entirely true. It is a lot more complicated than this. This was true to an extend a few years ago but these days the retailers feel the heat of digital distribution. Even if you would WANT to price your game cheaper online, you probably wouldn't even be able to do it as you would endanger your contracts with the retailers. When we did The Ball we had originally set out to do it digital only. And we had said "20$ is about fair for a Steam title like this". And then the retail distribution deals came. If we would have told them "Yeah you can distribute our game but we want you to price 35$ for it while we will sell at 20$" they would have laughed at us and we would have never been able to sign such deal. And this is even true for large publishers. They may have their own distribution networks, which takes some of the difficulties away, but they will still have to talk to Walmart and such. And they cannot possibly tell Walmart "please sell our game for us and give us a really good location in your shop but you must sell it at 150% our price"... Not going to happen.

If multiple companies are involved in the distribution process you will never be able to make them agree to different terms. It would be like selling your game for 20$ at Steam and 10$ at Direct2Drive. It is going to piss someone off, and it is going to hurt your business.

Which is why I said long ago in another flamefest thread along the same line (were lots of my fellow forumers here tried to tell me I was a moron and other complimentary things) that the solution was to sell physical media with digital, allowing an incentive to offer it digitally before you ship physically. So I.E. You pay for the convenience of getting it early and digitally on top of getting your physical copy which in a retail pickup situation is a win win for a store as getting people in the door is the biggest challenge and why they offer sales. As well as creating new market opportunities within the gaming industry.

[Sarcasm]But I am sure I am still wrong as nothing has changed[/sarcasm] and they will promptly inform me of this.

 

[shoptroll]

That's what retailers typically do with DVD releases, too (special pack-ins that are exclusive to the store).

Agreed. I don't think the recent uptick in the number of games getting special editions with "feelies" is a coincidence with the rise of digital distribution...

 

[ambershee]

I remember when most PC games used to get 'feelies' without the need for a special edition.

 

[elmuerte]

I remember when most PC games used to get 'feelies' without the need for a special edition.

That's so pre-2000. Amaray changed it all.

 

[Agent_5]

SMB and SMB Ultra are different products. SMB Ultra contains the soundtrack, a poster, 40 page comic thingy.

I understand that. I originally intended to show how a game could be priced higher at stores by adding extras. In the middle of writing my post I thought it might be a good idea to see if there was an xbox retail version, and if so, how it compared to the PC price. The part I don't understand is why brick and mortar stores sell the xbox version for $5 less than the Xbox market does.

 

[shoptroll]

I remember when most PC games used to get 'feelies' without the need for a special edition.

Those also used to come bagged in ziploc backs if the stories are true, grandpa

 

[Checker]

Outside of the preference to buy digital or not, there is another way to look at this.

If I go to a market and see two equal sized boxes of strawberries, one from a local farmer whom is selling it himself, and one from brand name X from your local super market. I would buy the strawberries from the local farmer, because i know he did most of the work.

So buying a game through digital distribution gives more money to the people that actually made the game, which they will most likely invest in making more and/or better games. (By increasing the next games budget and improving the quality of life of their employees).And it doesn't cost you a cent more, unlike local produce (which is generally more expensive).

 

[[GU]elmur_fud]

Outside of the preference to buy digital or not, there is another way to look at this.

If I go to a market and see two equal sized boxes of strawberries, one from a local farmer whom is selling it himself, and one from brand name X from your local super market. I would buy the strawberries from the local farmer, because i know he did most of the work.

So buying a game through digital distribution gives more money to the people that actually made the game, which they will most likely invest in making more and/or better games. (By increasing the next games budget and improving the quality of life of their employees).And it doesn't cost you a cent more, unlike local produce (which is generally more expensive).

Except then they get it in their heads that they are justified in keeping the profit margin the same rationalizing that larger investment by them = greater value to you automatically.

 

[Severin]

This is not entirely true. It is a lot more complicated than this. This was true to an extend a few years ago but these days the retailers feel the heat of digital distribution. Even if you would WANT to price your game cheaper online, you probably wouldn't even be able to do it as you would endanger your contracts with the retailers. When we did The Ball we had originally set out to do it digital only. And we had said "20$ is about fair for a Steam title like this". And then the retail distribution deals came. If we would have told them "Yeah you can distribute our game but we want you to price 35$ for it while we will sell at 20$" they would have laughed at us and we would have never been able to sign such deal. And this is even true for large publishers. They may have their own distribution networks, which takes some of the difficulties away, but they will still have to talk to Walmart and such. And they cannot possibly tell Walmart "please sell our game for us and give us a really good location in your shop but you must sell it at 150% our price"... Not going to happen.

If multiple companies are involved in the distribution process you will never be able to make them agree to different terms. It would be like selling your game for 20$ at Steam and 10$ at Direct2Drive. It is going to piss someone off, and it is going to hurt your business.

This does make sense, however the last two games (AAA titles) that I bought at or near release were 30% cheaper for a boxed copy from a major bricks and mortar retail outlet than they were on Steam.

Shogun2: Steam price £34.99. Off the shelf at a retail store £24.99.

How does that work ? Not only are there fewer distribution costs with Steam. You don't get a box, 2 DVD's and a printed manual either.

Witcher2: Same prices but you get a making of DVD which includes the all the in game music presented as an album, a game guide, a 'coin', two papercraft models and a map thrown in as well.

 

[Zur]

I know this is not Unreal related, so shut up in advance. Destructoid ran a great article today on Digital Distribution. It kind of covers why people are hesitant to jump into the Digital Distribution pool, and I'd be lying if I said I didn't agree with most of these points about it. I tend to wait until games are under $20 before I buy them these days, and part of the reason for that is the ridiculous pricing.



I had a REALLY hard time picking a quote for this, hopefully that is good enough to get you to click on the freaking source link and read the rest of the article. It makes tons of great points. Then, please, come back and discuss it in the comments thread!

Great to see people are prepared to stand up against dishonest practices :tup:

 

[hal]

Hourences makes a number of very valid points that are completely overlooked in the article - all centering around the complex nature of dealing with B&M retailers which are still very powerful in the marketplace. There's a real value to having your title on those store shelves and as long as those stores have the influence you can be sure they are going to want as even a playing field as possible.

Of course, a couple of things are happening now that make it even more complex. Many B&M retailers are adding digital distribution of their own. It's also possible that we'll see the two merge in-store where you have empty retail boxes and instant DD onto hard media. Looking farther down the road, the lucrative console game market could be moving to DD of its own - almost exclusively at some point, I'd imagine.

But back to the original point: yes it is irritating, but the situation is a bit more complex than it may seem on the surface.

 

[toniglandyl]

the thing that horrifies me the most is the fact that so many publishers have a $1=1€ price on Digital Distribution platforms. (namely steam for example)

 

[Anton]

The physical aspect of a video game - the disc, the box, and the manual - costs pennies. When a consumer buys a digital version of a game, they still have to pay for its development, its advertisement, and its distribution via the publisher. Granted, the online distribution model is cheaper, but not by enough where you would see any real savings. Given all that, I was never really surprised or upset by the fact that online games cost just as much.

The only way to make online-distributed games cheaper is to cut out the middleman publishing companies altogether, and have the developers deal directly with Steam.

 

[shoptroll]

Shogun2: Steam price £34.99. Off the shelf at a retail store £24.99.

My guess is the game wasn't selling at £34.99 in the stores. Retailers have to buy the games at wholesale prices up front. If it's not selling, it's taking up shelf space for something else that could be selling.