Editor’s note: Tadhg Kelly is a veteran game designer and the creator of leading game design blog What Games Are. You can follow him on Twitter here.
There are sudden goodbyes and there are long goodbyes. In technology and media industries more usually the latter. Entropy sets in slowly, like a cancer or Alzheimers, and little things start unravelling bit by bit until one day you notice how everything changed but you’re not sure why. It’s like that with game retail. No one thing has yet killed it, although everyone who’s anyone has predicted that it will die. And yet it still hangs on in there.
I used to work in a shop selling video games to the public in the early 90s and I loved this time of year. It was the exciting phase when your days were busied with selling, advising and talking with customers about new games. You were run off your feet, but not to the insane extent that December would bring. The period I most vividly remember was 1995 when Sega’s Saturn faced off against newcomer Sony’s PlayStation and lost heavily. I remember being a Virtua Fighter fanboy back then and trying valiantly to push Saturns at everyone. But they all wanted PlayStations because they had been told they were just better. Everybody wanted some new fighter called Tekken, or the 3D racing game WipeOut, or Ridge Racer.
Game stores used to matter. Aside from the rush to sell copies of FIFA to the entire planet, they served an important function for customers. They would often read magazines and come into talk about or try games. We retail assistants would advise parents what games their kids wanted for Christmas, and what to avoid. It was retail, so profit was profit and all the rest of it, but it had its place. Over the subsequent two decades that place has been lost, and of course it’s all the Internet’s fault.
The first part to go was the conversation as the magazine-centric culture of games gradually gave way to blog-centric communities and social networks. The second was the actual retailing as people just started ordering things online instead. 10-15 years ago, for example, you started buying your games from Amazon. Today you just download them. But the part where the Christmas customer just buys vouchers or codes to give as gifts hasn’t quite hit yet. Neither has a price advantage.
A lot of that has to do with used games. Many game makers despise the retail arm of the industry because of their perception that stores fleece them blind. In 1995 a few stores used to have a side business going with used games, but not to the extent that they do today. Used games are vital to profitability in retail and every dedicated chain is heavily invested in them. They operate a quasi-rental system where savvy customers get to play many new games by paying for one big game and then trading and topping up to get at all the others.
There have been good business reasons for retailers to make this move, mostly to do with the way that costs have gone up while prices have stayed flat. Margins are squeezed on new products, but players still think they’re expensive anyway. $50 for 10 hours of middling entertainment is not good value, but $50 topped up and recycled through half a dozen games is.
That maybe delayed the death of gaming retail, as did a couple of other factors. A simple reason is file size. Blockbuster games are huge (filling Blu-ray discs etc.) and not so easy to stream. These days you can buy GTA 5 digitally from Sony but you’re still talking about a download that takes many hours. Another factor is that despite the obvious price advantages of the used-game system, as well as that shown by Steam and the Humble Bundle stores, console platforms still price their digital games far too expensively. Charging $19.99 for a five year-old game just because it’s online disincentivizes users from thinking well of digital when they could just buy a used physical copy for $5.
Yet all of these reasons are slowly evaporating. Tablet and mobile games have done a lot to fix the perception that games are objects in the eyes of the ordinary customer. Clouds, game streaming and pre-loading are all attempting to overcome the size issues, while projects to get fiber to all households might remove that practical limit anyway. And while console platforms have attempted to maintain their premium prices for a long time, customers now know that they can expect games more cheaply (even for free) and inevitably they will.
The retail death march continues. You might be the Candy Crush Saga player grabbing your games from app stores. You might be a PC gamer grabbing copies of awesome games for 75% off down to your PC. You might be a patron of Nintendo’s eShop, Sony’s PSN store or one of many others. You might be buying your new gaming devices from Amazon. Either way the chances are that you already buy quite a lot of your games in non-physical forms. You’re probably struggling to remember exactly when was the last time you went into a dedicated gaming store. You’re not entirely sure where your nearest one is. You suspect the last time you actually bought a physical game in a shop might have been at a Target.
This is the most important year in the games industry in a long time. A lot is riding on the launches of two consoles, with some wondering whether the game console is dying or being reborn. Both PlayStation 4 and Xbox One have done a great job in acquiring a lot of press interest and setting stellar expectations. Retailers are busy ramping up their bundles (although there’s been some troubling news for those recently) and hoping for a bumper crop after a pretty miserable year.
But I think it’ll also be the year when the long goodbye speeds up. With new platforms comes new shake-ups of the rules of the industry and, while the new consoles do have disk drives, the likelihood of moving away from retail just gets stronger and stronger. A few years from now when you’re buying Halo 5 or GTA 6 online and playing it there and then you may pause to wonder whatever happened to games stores. You might remember them fondly or wish them good riddance.
You’ll notice that everything changed, but not be sure why.