Fallacies and Myths of the Retail Channel

[DGuy]

While this article has mainly to do with retail, it's an interesting read nontheless.

It's from this months IGDA newsletter

Click here to read it (http://www.igda.org/articles/hhalpin_retail.php)

DGuy

[James C. Smith]

I find it interesting how many of these issues are exactly the same for downloadable games. Just replace the word “retailer” with “portal” and you will see all the same topics debated her all the time.

Fallacies and Myths of the Portals

Portals don't get how cool our games are: It's not that portals don't want to buy-in to how ground-breaking your title is...what matters is how salable it is.

Portals only display games that publishers pay to merchandise: ...Shelf space (front page placement) is a valuable commodity...

Portals only stock titles from the majors and don't want independents

Publishers push for sequels and one-offs because portals prefer them

But I found this to be the most interesting quote form the article:
Myth “Digital distribution will supplant retail and developers will deal direct with consumers “ But the reality is that customers will be downloading Madden 2010 from a retailer's website, not the developers.

[Jack Norton]

Portals only display games that publishers pay to merchandise
What do you mean?? I think that if BFG site has only Popcap and Reflexive games in frontpage is because those are the ones who sell mostly, and not because they pay to get there... :D

On the last point you quoted... fun I quoted it too in my blog this morning, read my comment. (http://www.winterwolves.net/blog/2005/04/retail-vs-esd.html)

[Richard]

One thing that irritates me about that article is the comment about how they saved the PC retail piece of the business by reducing the box size, thus forcing the PC titles into a smaller foot print in the store, in order to prevent retailers from dropping PC titles all together. To me that is a stop gap measure at best and smacks of "Get to the back of the bus". Don't get me wrong retailers have every right to make the most money they can, but I just don't see reducing the stature of PC Gaming to a smaller portion of the store as something to give it a longer life at retail. Eventually it gets to the point of diminishing returns, what am I actually getting in customer base and sales in exchange for loosing control of my product in the retail channel.

But again just my 2 cents worth. I'll get off my soapbox, just my knee jerk reaction topic ;).

[ErikH2000]

One thing that irritates me about that article is the comment about how they saved the PC retail piece of the business by reducing the box size, thus forcing the PC titles into a smaller foot print in the store, in order to prevent retailers from dropping PC titles all together. To me that is a stop gap measure at best and smacks of "Get to the back of the bus".
Most stores I go into have the console games in DVD-sized boxes and the PC games in slightly thicker boxes that actually take up more room than the console games. In fact, I think console games have had smaller boxes since forever, so it just seems weird the PC boxes were so large for so long.

But whatever. Market pressures sort issues like this out with a ruthless determinism.

-Erik

[Adrian Lopez]

"Merchants are corporate vultures and don't contribute to the good will of the business"

Part of the license associated with the aforementioned PC icon that we give to publishers includes a provision for three finished copies of each game in which they use our trademark. Those games are given to our affiliated charity, Games for Good, which redistributes them to worthwhile causes. You may not be aware of it, but it's entirely possible that your game is comforting a sick kid in a children's hospital, helping a battered woman gain the confidence to start up her own business, keeping an at-risk teen busy in a youth center, or one of many other altruistic efforts made possible through the dynamic described. Believe me, we care and we're doing something about it.
Three copies in exchange for the right to use the letters "PC" to identify your target platform? Wow! They're regular humanitarians, they are. :rolleyes:

That whole article irritates me. I can't help but get the impression that he's trying to sell me something, like one of those slick infomercial hucksters.

[KNau]

Yeah, PC game distributors hung on to those huge empty boxes of air for way too long. Even now there's far more packaging than actually needed, it's not like distributors actually print manuals anymore. It's funny, they cry about not making money but pay for premium packaging when a DVD shell would do just fine. Doom III could have been a disc in a ziplock bag and sold just as well.

[Ricardo C]

Not to mention that DVD-style packaging is, well, so much sexier than big cardboard boxes.

[PoV]

Maybe so, but as a kid, you can't tell me you wouldn't have prefered one of those oversized display game boxes. :D

[arcadetown]

Portals only display games that publishers pay to merchandise
In the retail world a publisher pays a retailer by various means for good product placement. Haven't really seen much of this in the online world but I wouldn't doubt that it will eventually become more pervasive. My opinion is that smacks of anti-competitive practices and why you see very few soda brands in stores for example. Such practices should be outlawed but my opinion doesn't really matter.

[arcadetown]

In the music industry retailers adopted more earth friendly packaging with CDs. To me it'd be a good thing to see similar adjustments in the games industry.

[Adrian Lopez]

I wouldn't exactly call plastics "earth friendly".

[Richard]

What I meant ;) was that his entire point is the smaller footprint of the boxes allow retailers to put PC games in a smaller portion of a stores overall retail space is a really bad idea. Heck I even remember when this happened that some in the industry said retailers may carry more PC games because of the new size. No what it allowed is for retailers to stick the slow moving PC games to the back of their stores, and to continue to shrink visibility over time.

Again that's good business for the retailers, but bad news for PC developers/publishers.

[James C. Smith]

In the retail world a publisher pays a retailer by various means for good product placement. Haven't really seen much of this in the online world but I wouldn't doubt that it will eventually become more pervasive. My opinion is that smacks of anti-competitive practices and why you see very few soda brands in stores for example. Such practices should be outlawed but my opinion doesn't really matter.

What do you mean?? I think that if BFG site has only Popcap and Reflexive games in frontpage is because those are the ones who sell mostly, and not because they pay to get there... :D

That is why these things are labeled “Fallacies and Myths” They are either completely untrue or greatly exaggerated. I don’t think BFG would do this but some developers seem to believe all kinds of theories about why the portals wont promote their games.

[arcadetown]

I wouldn't exactly call plastics "earth friendly".
Well sure, just meant more earth friendly than the original CD packaging incarnation that first made record store shelves. One thing really proud of about downloadable industry is we're all generating economic output with tons less earth impact. Just think about how much impact retail has with crazy packaging, people driving to stores, huge delivery trucks, warehouses, shrink wrappers, all that energy wasted, etc. Makes you wonder, music lovers cried foul on crazy cd packaging but you'd never hear a gamer cry foul. :rolleyes:

[Adrian Lopez]

Hi Arcadetown,

I don't remember the sort of CD packaging you're referring to, but I definitely agree that the downloadable industry is much, much more earth friendly than the retail industry. :)

[Jim Buck]

I think he meant how cds were put into these very thin but tall (2 cds tall, in fact) boxes. (They were probably to help prevent theft.)

[Adrian Lopez]

Hal Halpin strikes me as an industry apologist doing everything he can to portray retailers in a positive light. When I say that I get the impression he's trying to sell me something, what I mean is that he's trying to "sell me" the Retail Model. One comment in particular is relevant to indies in this regard:

Digitally distributed games today account for one on-hundredth of that one percent. Is it growing, sure. Will it be much bigger in five years? You bet. But the reality is that customers will be downloading Madden 2010 from a retailer's website, not the developers.
Perhaps he's right, but it seems to me he's just looking out for his best interests.

[cliffski]

" Hal Halpin is the founder and president of the IEMA (Interactive Entertainment Merchants Association), the game industry's non-profit retail trade association"

Yeah, you got that right. I'm happy with my 1% of the business thanks, I'm finding it a nice earner. The more that retail developers keep their head in the sand and keep spouting this nonsense to each other, the better.

[adamw]

cliffski - you got it pat, my friend. Just give us people with PCs with the freedom to download and get the heck out of our way. I'll find my market.

And I don't mind competition. Bring it.