The Case For Retail - Jake H. Blog - www.GameInformer.com
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The Case For Retail

More and more, there is talk in the industry of the coming download-only revolution.  Analysts predict that all hard copies of media will soon disappear, and, while many like to preach the virtues of this new path, I find it very troubling.  As things stand now, when a consumer purchases a hard copy of a game, that consumer owns that game.  He may sell, trade, or do whatever with that game, because he owns that disc.  Therefore, the content on that disc cannot be revoked.  As long as the disc and the console on which it plays function, then the consumer can continue to use that content.  In a download-only world, this might not be true.

     When the only means of accessing content is by downloading off of online services such as Xbox Live and Playstation Network, then distributors hold all the power.  Not only can they set prices as they see fit, but they may also determine the usability terms of products distributed over the online services.  Gamers might never own the content, merely license it for a period of time.  Then, if the consumer wanted continued access to the content, the consumer would have to renew the licensed use of the product.

     While retailers are obstensibly middlemen, and middlemen do add a layer of cost to any product, retailers act as a price control on video games.  Retailers are forced to compete in an open market where others offer the same products.  If one retailer lowers the price for a game, then all the other must at least match this price to stay competitive.  A retailer will also not carry a product if it is too expensive for its consumers.  In order for retailers to stay competitive in an open market, they must carry products that will regularly sell.  Products priced too highly for their perceived worth by consumers will not be carried by retailers.  This helps to stabilize the price of games at a managable sixty dollars.  Take retailers out of the equation, and vertical monopoly appears.  The publishers and distributors of video games will control not only the production of content, but also the distribution of content.  In this scenario, consumers and gamers are likely to lose.

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