Sony reaffirms retail commitment after Gaikai purchase

Sony has made comments about the necessity of retailers moving into the next generation, just as its Gaikai acquisition takes the company another step towards a retail-free future.

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Sony's recent purchase of Gaikai was one more sign of a major shift in the console market. As digital distribution and streaming games become more prominent options for consumers, brick-and-mortar stores are running the risk of obsolescence. But that change is coming slowly, and Sony has assured retailers they're important for the next generation of consoles.

"Coming down off that 2008 peak has been a steep ride for many and has involved fallout on many levels, not least of all retail," Sony UK boss Fergal Gara told MCV. He suggests that this is forcing some retailers to rethink their involvement in the space, but Sony hopes they stay the course. "We'd love to see as many of those retailers as possible maintain their interest in servicing the space because clearly down the road many of us are going to be doing our best to give another injection into the market whenever the next cycle starts."

Rumors have circulated that Sony considered cutting out physical media completely from the PlayStation 4, but those seem to have dissipated. The company's plans for its Gaikai acquisition are unknown, but it could be to offer an easy method of accessing older games without needing to emulate on the system itself.

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  • reply
    July 9, 2012 4:00 PM

    Steve Watts posted a new article, Sony reaffirms retail commitment after Gaikai purchase.

    Sony has made comments about the necessity of retailers moving into the next generation, just as its Gaikai acquisition takes the company another step towards a retail-free future.

    • reply
      July 9, 2012 4:19 PM

      Those journalists / analysts who start the rumors of a console builder cutting out physical media need to spend less time in Los Angeles / New York / Silicon Valley need to spend a month in a town where the fastest connection is flaky 10Mbps cable, and then see how fun it is trying to download a 50 GB package for a next-gen game. And then try it with extremely flaky satellite broadband.

      Physical distribution is not going away in the United States, because suburban broadband upkeep is terrible, thanks to the lazy huge telcos and cable companies. Because of those analysts, Sony had to go calm down their retail partners.

      • reply
        July 9, 2012 5:33 PM

        I wonder if the game sellers of today will ever get the Funcoland treatment.

        • reply
          July 9, 2012 6:43 PM

          I miss funcoland. I used to order NES games from them back in the early 90's. Then they got really expensive before Gamestop/EB bought them out.

      • reply
        July 9, 2012 5:57 PM

        Which ties into the point I try to make over and over and that no one wants to hear - consoles can never give up the physical discs because it will upset their retail partners and they'll get the boot. Yes B&M stores could just sell the consoles and accessories but they would be cut out of the games equation. Yes, they could sell "game cards" with the code or whatever but once the console crowd becomes like the PC crowd and just buys everything online it's game over.

        If Sony, Microsoft and Nintendo all at the same time went DD only then it would work but that'll never happen.

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          July 9, 2012 6:18 PM

          so why is this so different from the music, movies and ebook markets which have gone increasingly digital to the point where digital sales are eclipsing physical ones?

          http://mashable.com/2012/06/17/ebook-hardcover-sales/

          I don't think anyone is arguing retail is about to disappear shortly or entirely but GameStop knows their product is disappearing.

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            July 9, 2012 6:41 PM

            part of the reason is that if the consoles did it, it would be instant. the industries you mention have gradually been going digital over a period of many years. consoles dont work that way. you have your PS3 with its discs, then your PS4 suddenly no longer uses them. there can be no lead up to it. your prior gen has disks for 8 years, then literally overnight they are gone. i have no doubt the ps4/720 will have alot bigger emphasis on online and digital media but there is no way they are dropping it for this next gen.

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              July 9, 2012 7:00 PM

              part of the reason is that if the consoles did it, it would be instant. the industries you mention have gradually been going digital over a period of many years. consoles dont work that way. you have your PS3 with its discs, then your PS4 suddenly no longer uses them.

              You're going to have to explain why you think that's even remotely true. The 360 and PS3 already do discs and digital downloads of retail games, just not day and date. The Wii U is going to do discs with day and date digital releases of 1st party games. Why would they not keep an optical drive while also doing digital releases?

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                July 9, 2012 8:08 PM

                I think we may be arguing different things.

                Yes, I can see a future where like Steam games on console are day-and-date with digital and retail releases.

                What I can't see happening, ever, is the consoles switching to DD entirely. Which is what many people think will happen, and would ordinarily be a natural progression, but can't happen here.

                To tie in with the music analogy - if there were two different formats each with a single company controlling them (i.e., Sony controls CD, Microsoft controls cassettes or something) and one started transitioning to all-digital only? You bet it would start getting phased out in favor of the format which doesn't try to shut out retail.

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                  July 9, 2012 8:28 PM

                  What I can't see happening, ever, is the consoles switching to DD entirely. Which is what many people think will happen, and would ordinarily be a natural progression, but can't happen here.

                  Can't happen why? I don't think your argument below is a strong case for that. It'll happen when internet penetration and QoS reaches a certain point. That might be what is essentially 2-3 generations away but I don't see any compelling reason for it to never happen.

                  To tie in with the music analogy - if there were two different formats each with a single company controlling them (i.e., Sony controls CD, Microsoft controls cassettes or something) and one started transitioning to all-digital only? You bet it would start getting phased out in favor of the format which doesn't try to shut out retail.

                  But it won't work that way. Every platform holder will make the transition at a similar time and a similar rate because it's equally advantageous for all of them vs retail. If MS goes heavily digital rather than retail it's because that's where the money is. Sony can't go 'haha now we're going to take all of retail!' and get in bed deeper with Walmart and GameStop and suddenly conjure up additional retail sales into existence. If the retail market is shrinking relative to the digital one in such a way as to encourage some platform holders to increasingly shift that way, then it is that way for everyone in the game.

                  The whole point is digital makes such a format transition unlike the days of CDs and cassettes. You're increasingly not beholden to a third party to get your wares into the hands of your customers. You have a direct relationship that benefits the platform holder and the consumer in a number of ways. Retailers can shut you out if you don't play ball, but the percentage of sales they can hold over a platform owner's head is shrinking, not growing.

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            July 9, 2012 8:18 PM

            You don't think anyone is arguing that? Look down.

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              July 9, 2012 8:21 PM

              I guess I should rephrase, "I don't think anyone who knows what they're talking about is arguing that..."

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          July 9, 2012 8:18 PM

          I don't think that's the case at all.

          * Give Walmart/Costco/BestBuy/whatever a 15% margin or whatever and they'll sell it for you.
          * Ditto for Amazon, etc.
          * Sell it in your own store (online, and in the case of MS the few MS retail stores they have).


          I buy 99% of my stuff online and have it delivered. Not sure I see that number going anywhere but up for the general population.

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          July 9, 2012 9:29 PM

          If people will buy a product, a retailer will carry it, even if they're "pissed off"

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            July 9, 2012 9:39 PM

            No, if you piss them off too much they'll drop you

            http://www.fastcompany.com/magazine/77/walmart.html

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              July 10, 2012 12:59 AM

              but again this case is different. The pickle company his little recourse if Walmart drops them. There's no other means of getting sales of that volume, and certainly no new way that's growing in popularity. They require an intermediary and depending on the nature of the relationship that third party seller can actually end up with pricing power over the producer. If the pickle company's brand were stronger than Walmart, as strong as say, Apple's, then Walmart couldn't exert those types of terms. A company like Apple has further leverage because of the fact that Apple has a 1st party means of distribution of their product. That's what digital distribution does. It gives the platform holders leverage, and as the trend lines of physical and digital sales and internet penetration and QoS move in their current directions, that leverage only grows.

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        July 9, 2012 7:07 PM

        You mean like that thriving PC retail distribution system?

        olololololo

      • reply
        July 9, 2012 9:49 PM

        Remember when everyone was angry because Xbox 1 didnt support phone modems? Stop living in the past.

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