Over the past 6 months I have posted why Gamestop's toughest years are ahead, why Gamestop is the IBM of Retail and signs that digital downloads are at an inflection point. Today, the NY Times reiterated a lot of the same thinking:
A number of factors are at play, but none as significant as the industry’s march toward a future of games downloaded over the Internet rather than bought in stores, analysts said. All mobile games are delivered over the Internet, as are nearly all PC games. But the transition for console games — the biggest segment of the business — has been far slower. Large game files could take hours to download and quickly fill a console’s hard drive.
Now, faster broadband speeds and the bigger hard drives in the latest generation of consoles are reducing those obstructions.
I still believe this is the tip of the iceberg and faster broadband speeds are only one reason consumers are flocking to digital downloads. Early release windows, early trial periods, game incentives and ease of purchase are all reasons as to why customers prefer digital downloads. Publishers will continue their assault on the retailers for a few reasons:
- Publisher Take Increases: The Publishers make money by selling directly to the consumer through the consoles.
- Used Game Market Is Minimized: The more digital downloads the lower the amount of used games that can take away from new purchases.
- Owning the Customer Relationship for Future Marketing