Will digital kill mainstream gaming locally? 
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Gavin Mannion
July 24, 2013 at 12:30 pm

Nostradamus

Earlier today we reported on EA Games now earning 76% of their income via digital mean,  proving that digital is a viable future and that the days of buying games from brick-and-mortar retailers could come to an end. 

I for one love the idea of buying my games online and having a huge online library that can’t be stolen – but I also think there is a huge risk to this idea and one that could devastate the industry in a few short years.Here is my prediction of what will happen locally and why this blessing will turn into a curse for the vast majority of the gaming industry.

2-4 Years

Over the next 2 to 4 years local general retailers such as Musica, CNA and Look & Listen will stop stocking video games as the market will appear to shrink, with more and more people buying games online. This will result in the balance of power switching locally from retailers to media as more purchases are made online and the impact of retailers will fade.

Specialist retailers such as BT Games and online retailers will continue to thrive It’s at this point that all consoles get patched to no longer accept second-hand games.

Careful what you wish for

4 – 6 Years

Moar moneyWith publishers now earning 90% of their income via digital sales and the media having more of an impact than ever, the brains at the top decide to withdraw local marketing budgets from the regional distributors and rather funnel it directly into the top media worldwide.

Indie developers start suffering as the profit sharing from the publishers, who now own the platforms, becomes excessive and the only indie titles that are seen are mass-market titles.

This quickly destroys the emerging market media and concentrates all media coverage to the EU, Australia and USA. With a clique of 30-40 media outlets exploding with the increased revenue. The lack of advertising money hits the specialist retailers just as hard and they quickly either become generic technology shops or close up.

Unfortunately as the first world economies are still well supported this destruction of the industry in other countries goes widely unnoticed and no one reports on it. The only news that is noticed is that all video game exhibitions stop running. With no retailers or media to impress they are no longer justified.

6 – 8 Years

Videogame sales in emerging markets and smaller economies slow down drastically as the mainstream users never see any media coverage of the games and quickly begin to lose interest. The online retailers stop stocking the games as they are now costing more to store and ship than they can justify.

The publishers don’t care as their profits are higher than ever and they begin to cut back on which media outlets receive funding; this is based on size of audience and how good their working relationship is with that outlet. By the end of the 8th year the number of media outlets has dwindled to 10 with some going bankrupt and others merging together.

2 websites remain with the other 8 being split between broadcast and print. The 2 websites are both owned by a media conglomerate along with half the remaining outlets.

illuminati

8 – 10 Years

The next generation of consoles is shelved with the hardware companies refusing to invest more in an industry where their profits are plundered by publishers and with them no longer having much chance to sell peripherals and accessories for their consoles. The publishers profits start to shrink which results in the owning corporations plundering them for their assets before selling them off to the new Chinese mega corporation with more money than brains.

The remaining media outlets start shrinking and the industry we know and love goes into a 10 year recession before being saved by a new upstart, selling plug-and-play games in all retail outlets around the world.

20+ Years

Party like grannyWe’re all too old to enjoy the new found gaming sensation and slink of to die miserably….

Or we take some advice from this lovely lady on the side and try relive our youth only to realise it was better in our day and if we had just paid more attention and not been so eager to save a buck back in 2014 things would have turned out better.

Unfortunately since everyone only cares about themselves and would rather bulk import games to save R50 on each title than support local companies I simply can’t see how this future isn’t going to turn out this way.

Agree? Disagree? Let us know in the comments below

I'm cranky, arrogant and ever so amazingly annoying but when you get to know me you will also realise I'm honest and incredibly good at describing myself... now pass me that beer

  • Sageville

    I don’t see any mention of Jetpacks!

    When are we getting the damn Jetpacks!

  • Robert Infy Hart

    As long as kids cant own their own credit cards to make online purchases, brick and mortar stores will still have some form of client base. Not all parents are okay with using their CC’s online.

    • Sir Rants-a-Lot Llew

      The problem being that the majority of gamers are of age to own a CC. It’s about the majority being catered for here.

      • Robert Infy Hart

        I dont think its about the majority. As long as the minority is large enough in numbers, it should be able to support a business.

      • Verrayne

        Every time I’m in BT Games I feel like an ass I go in my lunch time to pickup my titles, and every single time there are parents with kids half my age getting the same game..

        • Sir Rants-a-Lot Llew

          You shouldn’t feel like an ass. You’re not the one in the wrong here

          • Verrayne

            with their judging eyes and stiff upper lip I can’t help it :P

  • John Ambitious

    So no nuclear holocaust? That’s good news.

    • Admiral Chief Groot Wors

      Or zombies…

      • John Ambitious

        I want to say zombies are fine but I have quite a number of friends who aren’t the brightest or the bravest (like me) and I’m fairly certain we’ll all end zombies ourselves.

  • Sir Rants-a-Lot Llew

    This is sadly true. Convenience is going to destroy the market. But I don’t think it’s going to happen as fast as you have laid out above. With broadband generally becoming cheaper and faster around the world the effects you are describing would probably take much longer to be felt.

    That being said I am no expert. But anyone can see that going all digital is a slow death to the industry simply because the backbone is effectively being removed by going all digital.

    • John Ambitious

      I buy most of my games online these days also, and I can see how this is especially going to affect countries like SA in the future…

      • Sir Rants-a-Lot Llew

        Yeah I hear you

  • Hammersteyn

    It’s already better back in our day. If games go fully digital the movies and music will follow suit and Musica, CNA and Look & Listen will have issues. Back in our day this would never have happend….

    • Sir Rants-a-Lot Llew

      Bwhahhahahaha. Winna!

    • Lord Chaos

      Lol. You win the internet with this pic.

    • Johan du Preez

      Yeh cause no one had internet :P

  • http://lazygamer.net/ OVG

    Good take. Agree. It is the start of the next gamer crash.
    The internet fcked up my hobby.

    • John Ambitious

      Yes. Spying isn’t quite as adventurous as it used to be…

  • RobbieH76

    Here’s the thing tho, on another site I’ve seen that M$ has made the RRP for Forza5

    £50 in the UK

    and in the EU:

    € 69.99

    Times this with our R13 vs Euro, and we are seeing R910 for 1 next-gen game…

    No wonder we are all skipping pre-orders and games like TR fail…

    R900 for a game is absolutely ridiculous, oh and that for Forza5 that isn’t even a “complete” game…

    F&%$ you next-gen, F%&$ you!!

  • CrasH

    Intresting, but the exact same thing was thought about CD’s with the MP3 and Istore and with DVD vs Blue-ray.

    Instead, i think we will be going back to cartridge type systems…
    SDD prices are going to be soo cheap, and games soo large and speed reliant, that the disc/install system will be too slow and require too much space.

    So you get a SDD in a nice cartride case, that has the install, a patch folder, is encrypted and flooded with anti piracy and for your digital download, can even be published on blank cartridges that will work if you have the license transfered to the physical device or will have to connect to your online library to work.

    • John Ambitious

      I’d love a shelf full of little SSD sticks.

      • Sir Rants-a-Lot Llew

        @fcc1afeea20a15d6473838b4e7e8b110:disqus Dude… That’s actually a kick ass idea 0_o.

  • Ultimo_Cleric N7

    I think there will be a radical shift in the market long before the real doom & gloom happens. Look at how the market shunned the XBox for its relatively tame Always Online requirements.
    Personally I think while Digital is great, there will come a sort of “Arab Spring” where gamers around the world will just get fed up of the dev & publishers taking advantage. Remember we are FAAR more vocal than any other consumer of media.
    I feel this will inevitably lead to a standoff between Demand (gamers) and Supply (publishers), and at the end of the day WE are the ones with the money, not EA. They cant MAKE US buy anything, we choose to.

    • Sir Rants-a-Lot Llew

      The problem is we as gamers are helping this along because we mostly chose to do digital. The developers and publishers are simply going to the places where we are actually spending our money.

      • Ultimo_Cleric N7

        Agreed, we have helped them get to this place. And digital isnt neccissarily bad. But I just cant see the publishers forget about certain countries just because the market isnt THAT big. Globalization is such that gamers are far too well informed. Look at the regional launches of the Xbox….so unpopular, even though +-80% of the gaming population are actually covered.
        Gamers are one big family………Leave anyone out and the rest get angry.
        True Story.

        • Sir Rants-a-Lot Llew

          But it’s already happening. People are making the push.

          EA removed local offices, XBox is launching late in our region. The device is made specially for American TV. They are already starting to only look at the already developed markets and letting the emerging markets fall on the wayside.

          Look at always on gaming. Many emerging markets cannot do always online. Heck some can barely do a once of online auth. But publishers don’t really care because the developed market is currently able to sustain them. So they are in effect, already forgetting certain countries.

          South Africa only has roughly only 800 000 fixed line ADSL subscribers country wide.
          Guarenteed not every single one of those are gamers. So let’s be optimistic and say 30% are gamers. That’s only 240,000 gamers. Of those 240,000 gamers we take the 76% that EA claim are digital. So that’s 182,000 gamers only. This is taking very optimistic stats as South Africa’s broadband isn’t actually cheap enough yet for even 50% of those gamers to be truly digital.

          Then you take an optimistic approach that 40% of those gamers WILL buy your game. That’s only 72,800 sales. In an industry that sells millions of copies of games this is but a drop in an ocean.

          Edit: In summary: Publishers don’t care about our small market because it isn’t profitable

        • Bad @ss

          Dude I tend to disagree with you. It is already happening. Consoles, for now, have taken over the world of gaming. I am a PC gamer and I cant find someone to play with in COD ghost other than tdm as the publishers forgot about PC gamers and as an after thought published a PC version of the game. You see that there are 20000 plus people playing world wide yet you sit more than 10 minutes in a lobby waiting for enough people to join just to start a game. When PC were still king you use to get dedicated servers and not this cloud server shit they are trying to sell us, which worked .

          So my point is this. We are in South Africa, very very very small market compared to Europe and America. Dedicated servers in Europe America none in this third world country

          • Ultimo_Cleric N7

            Good point.

    • John Ambitious

      I hope EA goes first and gets a radical change

  • RinceWind

    Gavin, you just broke my future. Thanks buddy… Can I have my money back from that T-shirt, seeing as LG won’t be around in a few years? I don’t want people in 4 years to think that Lazy Gamer means Lazy Player…

    • John Ambitious

      Just use it as a dish towel

      • TiMsTeR1033

        or to use when waxing your car.

  • Umar Kiiroi Senk?

    Damn that was a gloomy article. How exactly will all the profit go to the publisher and with the publisher owning the platform?. That would be a cause of the greed of the publisher not Digital games … physical media is going to last a long time, especially in games. at least for next gen, what if internet infrastructure becomes better in that time and we can eventually ease into digital? I don’t see digital being the cause of a crash, this is evident by the boom in online sales (Steam, GOG etc), if anything Digital helps the industry grow too. don’t get me wrong, I do not have internet and rely on physical discs but Seriously, digital will not cause this, DRM will and Rigid online requirements …. If we could download and still play offline, that would be fine, if we can’t even play our console without connecting to the internet, that is a huge problem.

  • RinceWind

    OR:

    2-4 Years

    Lazy Gamer spreads like a virus, carrying with it the Word of gaming to the
    growing market in Africa. Fuelled by whoring itself to the East, Africa
    indulges in the luxuries of instant gratification from a technological point of
    view. This fuels an interest in investors from pre-established goliaths like MS
    and SONY who start to compete for their market share in the new, thriving and
    wealthy African.

    4-6 Years

    Having gorged itselfon the pulp of Africa, MS and SONY move from the once restraining high-rise
    building and expand to continent size corporations. The world does away with
    states, regions and countries, and forms itself into three disparate
    conglomerates. Microsoft, SONY and Nintendo are now the only options in Risk.

    6-8 Years

    The world sees an unprecedented era of peace. Fanboys are not allowed to leave their designated
    zone, and all is good.

    8-10 Years

    A new kid on the block rears its head as an underground movement. The Oculus.

    10-20 The human race goes blind from its dependence on the Oculus, and coach roaches take over.

    20-30 Years. Having been in hiding for the past 17 years, Darryn emerges from his Batcave and is greeted by 6 foot high roaches who plead for guidance. Darryn is promoted to Kingroach.

    30-

    The World Ends.

    • Umar Kiiroi Senk?

      Turn this into a movie NOW!

    • John Ambitious

      I’m just wondering…who’s going to be at the front of the ‘whoring’ expedition

      • RinceWind

        That can be discussed… ;)

    • John Ambitious

      The fanboys having their own zones won’t work, because the console guys will always be behind the pc guys and will eventually be taken over by them, resulting in the pc fanboys truly becoming the master race.

      • RinceWind

        Oi! It hasn’t even been released in its new ‘grittier’ version yet, no rewrites!

        • John Ambitious

          Sorry sorry. Got a bit too specific there. But to be honest I actually think Geof would have a bigger role there. He’d probably be the guy trying to overthrow Darryn

          • RinceWind

            How could we work him in here? Darryn comes out of hiding and finds Geoff, King of the roaches to be an annoyance?

      • TiMsTeR1033

        pcs and consoles will be the same. playing off the cloud. no need for elite hardware just pay connect play whatever game you desire

  • TiMsTeR1033

    I personally Never see gaming idustry going like that instead more like this!

    Digital copies of games will slowly become more and more popular But only in 10 years time maybe 20 in South Africa will every game be bought online due to the fact internet will become a basic need like water and lights and be added to those bills.

    Until then physical copies will still be around, but then again I doubt the planet as we know it will be the same. Global warming is seriously messing up Earth and the way prices of fuel and stuff going up will you even beable to afford games let alone the console to play it on!

  • John Ambitious

    This must be the article with the most long comment posts ever.

    • Sir Rants-a-Lot Llew

      ..

      • John Ambitious

        May the upvotes smother you

        • Sir Rants-a-Lot Llew

          Tx

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  • Drizzt

    You forgot a more immediate threat we in SA would face if you own an Xbox. Their shockingly poor management of XBL! Xbox would cease to exist in South Africa after a few months because of them blaming the FPB and all the false advertising!

  • Unavengedavo

    This made me think of the Life After People documentary :P

  • Jim Lenoir (Banana Jim)

    20 years from now, I’ll be rocking a porno moustache and a six pack… Hopefully, I’ll own a genetically modified cat, called Dr Cerberus.

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  • Macethy

    The day that gaming does fully digital is the day I give up gaming.

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  • Johan du Preez

    The next medium will be digital and games on usb sticks

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  • Unsatisfied Reader

    I don’t mean this completely negatively, but where is the basis for these assumptions?

    To adequately explain the errors in this article would take far to much space, however:

    1. a growing online market does not automatically mean a shrinking physical market

    2. online sales are still often considerably over-priced when compared to physical alternatives (I have regularly purchased a physical game for less than I can pay for digital download)

    3. consoles getting patched not to use second hand games is unlikely – for myriad reasons – but look at the Sony marketing recently and the U-turn of Microsoft based on that stance (gamer reaction probably had something to do with it – but the more cynical will guess that it was the competition they reacted to, not the consumer)

    4. the problems with your 4-6 year predictions could fill a dissertation – as could your 6-8 year predictions

    5. 8-10 year prediction, equally flawed but easier to respond to. Consoles are there so that the manufacturers of those consoles can take a slice of everything sold – unless they over-step the mark so far that publishers/software developers completely stop making titles for that platform (pretty unlikely IMO) then the publishers can’t push them out of the market (when was the last time you saw MS or Sony get “bullied” out of a market? This doesn’t include their own self-inflicted fails)

    6. You have an article about the future without mention of the work Valve are doing to support indie developers (its not perfect but you can’t have an article of this nature and just ignore the type of thing they are trying to do)

    7. No mention at all of any technology like the Ouya http://www.ouya.tv/ – even if Valve don’t deliver real options to start-ups and small scale developers then this technology will be there to be disruptive
    8. No mention of the fact that many small developers can’t get on to platforms right now – the barrier for entry is just too high for them. They can get things released digitally that just wouldn’t be possible through traditional physical media
    I don’t mean to baselessly bash this article – but try to get some balance in there and cover the wider reality of the market without the doom and gloom prediction with some harder facts to back it up. If I was getting paid for dishing out opinion and coverage I’d go to town with dissecting this type of article…

    • Jim Lenoir (Banana Jim)

      Also, the cloud is a lie!

  • Annunaki

    this will only happen in SA if bandwidth becomes affordable

  • http://stevenshearingslife.blogspot.co.uk/ Steven Shearing

    Not all country’s have great internet speeds to support such downloads, for instance my area has no fiber optic leaving the highest speed possible at about 3mb connections that are unstable and has jitter on the connection.
    Until solved shops will continue to exist.

    http://stevenshearingslife.blogspot.com/

  • jquincy

    Right now, anyone who ever worked in or enjoyed shopping in a brick-and-mortar music store is playing the world’s smallest violin for the brick-and-mortar video game retailer.

  • robthom

    Cant be stolen except for the corporation that controls access to your shit

    I laughed at the story a few years back about the guy who had $2000 worth of games on steam,

    tried to sell his account but thats against steams terms of use and they found out,

    so they closed his account!

    Have fun with that dude

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