dumpster wrote:The big secret is now out of the bag. Since a number of Gamestation's higher management moved to Asda, the benefits of preowned to the retailer are becoming common knowledge, and it now seems that everyone is getting in on the act.
This means that one of the biggest reasons to purchase from a specialist store has been removed. There have been a number of times that I have bought a game from a specialist, knowing that the game was a few quid cheaper in the supermarket, but I'd be saving a greater amount by trading in. Now that Asda, Tesco, HMV, Argos etc. are all allowing you to trade your games as well, that's one more reason not to shop with a specialist.
Now, it has always suprised me how the distributors didn't seem to mind preowned, and the way that one copy of the game can be resold multiple times without the designers, programmers, distributors etc. making any money on any sale but the first. Recently, this has started to change, with the introduction of online redemption codes to make the preowned product less atractive. When you consider that I've seen recent preowned games on the shelf at only a couple of quid less than a new copy, this demonstrates that the greed of the retailer makes this redemption code strategy even more effective. Years ago, a £40 game would be more like £20 preowned, and this saving could outweight the benefits of the online codes for a lot of people. But since the chain stores got into preowned, the price of a second hand game seems to have risen dramatically.
The rise in price of preowned products is just one way that I feel the specialist stores have worked to alienate both their customers and their suppliers over the past few years. For example, does a software publisher actually want you to go to a specialist store in the first place? Why would they want you to go into a shop filled with preowned products that they make no money on? Every customer that heads into town to buy a new game only to come away with a preowned one is a lost sale for the software house.
And if they alienate the software houses, they're alienating the customers as well. The mantra for specialist retailers is that they give great customer service. But just how much customer service do you need when you go to buy Fifa 11? Because I don't want to be upsold a memory card, strategy guide or anything else. I want to pay a price for a second hand game that is noticably cheaper than a new one. How often do you see preowned games in your local store, and think, "I could get that new online for less".
So the software houses seem to have declared war with the preowned idea, and this must surely be a great worry for the shopkeepers. Another worry should be the rise of online retailing, which is now mass market. Online retailers are usually cheaper, and they deliver a new release to your letterbox on the day of launch - at the latest! Sometimes you get it a couple of days early. Back catalogue is often sgnificantly cheaper online, and you can pick up a copy of EDF on Ebay any day of the week, instead of hunting round loads of shops hoping someone's got one in. (Buy EDF, it's amazing.)
A further worry for the retailers should be that the console manufacturers are now in communication with the game players directly, over PSN and Xbox Live. They may not be monitoring my browsing habits or instigating a conversation, but they can see I am playing Dead Rising 2, and even though I bought it from a shop, they are offering me free add on costume packs, themes for the desktop and now, added content in the game that I can buy with my credit card. This does not feel like a threat to retail, but it should do. Every time I download something from Xbox Live, even if it's free, it's removing the barrier to online purchasing for me. If I was someone that was worried about online shopping, every free costume pack or downloaded demo makes me that bit more comfortable.
I would bet that, if Capcom announced Dead Rising 3, there would be targetted advertising on my Xbox Dashboard, free downloads of the demo, and ultimately, one day, the full product delivered directly to my console on launch day. As more and more people get broadband, they'll be online with their consoles and as soon as Microsoft start offering new release games as downloads, there's no reason to go to the shops. Of course, you could always go to the store to trade in your old games, but without packaging and distribution costs, the price of a direct download new release could be a fraction of what the stores would need to charge. What would retail do if new releases came out online at £20 or so? And also, if you've been buying online, what exactly could you trade in at the store? And would you care that you didn't have anything to trade in if the games were all half the price they are now? (I do belive that games prices probably would not come down in this way, but that doesn't mean they couldn't - look at these developers making millions by selling Ipod/Iphone games at 59p, for example).
It's been a while coming, but it seems to be finally sinking in that the software houses do not need the retailers any more. When I worked for a major retailer, it was rumoured that they charged for their shelf space - the shops were so valuable to the suppliers that the decision not to stock a product could be the death of that product. For example, when Lisa Scott Lee made that TV show that followed the launch of a new single (Totally Scott Lee), she was told that Woolworths had decided not to stock it and this meant there was no way the song could get into the top ten chart. Woolworths since vanished, and the changes to the music industry since then (Itunes etc.) would mean that this situation would not happen these days. The same is true of the game shops - they need the product, and if they get stroppy and decide not to stock a product, it only hurts themselves now. This is a significant shift of power away from the retailers and it's already happened.
Retailers in other sectors have either adapted or collapsed. When the industry changes around the shops, those that do not keep up flounder. Take Radio Rentals for example - they started out exactly as the name suggests, renting out radios. Then, as the world changed, they realised that no-one needed to rent a radio, so they adapted and rented TVs, VHS video players, and in the later years, full home cinema systems. But even then, the prices of the tech just continued tumbling, and it reached a point where there was simply no other changes they could make - the world just didn't need their business any more. If you wanted a radio, a TV, whatever - you just went and bought one. Radio Rentals adapted their business enormously, but ultimately had to accept that there was simply no need for their business model.
Blockbuster Video is next, in my opinion. Digital distribution of movies directly into the home makes their business redundant. Why would anyone make the journey into town, in the hope the film they want is not sold out, only to pay over the odds for a night's rental, then face the same journey the following day to return it, risking late fees if you forget. Netflix and Lovefilm go a long way to removing these issues, but I guess their days are numbered too, eventually, as more and more options arrive for getting the latest movies piped directly into your home.
But the biggest worry of all is the rumours that the next iteration of Xbox and Playstation won't even use disks. This really does put all specialist game retailers into the same position that Radio Rentals found themselves in many years ago. They won't even have the option to sell the products or not - retail copies just won't exist. The companies have property, employees and IT systems. Would their best course of action be to find a whole new industry and simply start over?
TL;DR - Every reason to shop with a specialist gaming retailer seems to have been eroded over time, and in my view, the best option is for them to completely restart in a different retail industry.
http://www.rllmukforum.com/index.php?showtopic=233866
