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GameStop Boss: Disc-Based Games Are Here To Stay

Ben-Dutka 30 Comments

Many gaming executives, including Microsoft's Robbie Bach , believe the next generation of consoles won't support physical media.

But some industry bosses believe digital and physical will continue to coexist. GameStop chief executive Paul Raines is one of those people, as he informed Fortune in a new interview.

In fact, he thinks discs will continue on forever:

"Disc-based games will be around forever. The market has seen physical music sales down 50% from its peak and physical movie sales down 60% from its peak, but even in a doomsday scenario, disc-based games will be around for a long time.

I see a complimentary business where we sell discs plus download like the current console mode. Virtual reality games will also likely follow this model."

Of course, GameStop will need to increase its digital business and they've taken strides in that direction. Thanks to the sale of DLC and download codes (among other things), the retailer has "a pretty healthy digital business," according to Raines. In fact, GameStop expects to earn over $1 billion in that area this year; in the past year, it grew 11 percent.

Well, let's hope discs stick around. Real collectors will still need them. By the way, if you need some work this holiday season, GameStop is hiring 28,000 temporary employees .

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Game Disc Manufacturers Sense Digital’s Impending Dominance

Ben-Dutka 42 Comments

The expansion of the digital age is rapidly encroaching on the physical media veteran gamers know and love.

According to an MCV report , game disc manufacturers have predicted "a steady decline in the use of game discs" as digital continues to become more and more popular.

Some companies that duplicate physical games "are on the verge of going out of business" in Europe, and most assume the problem will only get worse. Said UK commercial director at OK Media Doron Garfunkel:

"We believe the European market for replication will shrink by about 10 to 15 per cent per year as more and more games, audiobooks, DVD and so on are being distributed digitally rather than physically."

The firms that are trying to survive are currently looking for new sources of revenue, and that includes music and movie distribution. They do say there "will always be a need for physical product," but there's no doubt that digital distribution is here to stay and will continue to claim part of the market. Said CD Writer's Nic Ranshaw:

" Manufacturing will become increasingly specialised and niche, with physical product being used to build brand awareness and generate a buzz on the streets with the publication of limited collector’s editions that sell for premium. "

The picture in this article should be clear to older gamers: It's a picture of the Lunar: Silver Star Story Complete box produced by Game Arts and Working Designs for the original PlayStation. That's what you don't get with digital. Just a friendly reminder.

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Report: Hardcore Gamers Will Stick With Physical Media

Ben-Dutka 31 Comments

While the casual gamers may not care about having a tangible product in their hands, the hardcore might always care.

According to a recently released Wedbush Securities report, the idea that all consumers are shifting towards digital is a "commonly held misperception." The report in question states that the hardcore gamers will continue to stick with physical media.

"Many investors believe that consumers are abandoning packaged products in favor of mobile and social games, and think that the publishers who have lost share will never recover. We think that this thesis is only partly true; in our view, casual gamers are likely to shift their playing time from packaged products to mobile and social games, but hard core gamers are far less likely to do so.

If we are right, the packaged goods business should be viewed as consisting of hard core games (the vast majority of sales on the Xbox 360 and PS3) and more casual games (the vast majority of sales on the Wii and DS). Our thesis has been borne out by the 2011 figures (according to the NPD Group), with Xbox 360 software sales up 12%, PS3 software sales up 4%, DS software sales down 21% and Wii software sales down 31%."

The report also noted that there is a "large overlap of social gamers among the older and female demographics," which isn't going to surprise anyone who understands this industry. Furthermore, with so many games coming out, consumers have become more selective and are often limiting their purchases to big AAA releases, which has led to an overall decline in software sales. For a 2012 prediction, the firm believes sales will continue to slide over the summer but should rebound during the holidays, with "3DS and Vita software making up for lost sales on other systems."

Yeah, it's true that the casual gamer might probably opt for the digital choice; it's generally faster and easier, and they don't care about having a game library. But the hardcore do, and having a bunch of files on a video screen doesn't constitute a collection, as any collector will tell you.

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