It hasn’t even gone live yet, but Green Man Gaming has already got the games industry talking.
The digital retailer arrives in March and lets consumers worldwide trade-back their digital product for money off their next purchase.
It’s a proposition that has split opinion. Some believe the service could be revolutionary, while others accuse it of being nothing more than a glorified rental service.
But COO Gian Luzio is confident Green Man can prove the sceptics wrong, and believes that a trade-in offer will encourage consumers to buy more impulsively.
“The inability for consumers to monetise their games collection has been holding the digital market back,” he says.
“Publishers want to sell as many games as possible, but they don’t just want to sell the big triple-A games, they want to sell back catalogue titles too. Yet if customers have to spend £40 a game then they are going to be cautious and probably just go for the triple-A release. We believe that letting customers monetise their digital games will encourage catalogue sales and impulse purchases.”
The sytem works likes this: If users want to trade back their download, Green Man Gaming will deactivate that user’s game code. Once done, that code will then be made available again at a ‘pre-owned’ price. This is the element that attracted the most criticism.
Sceptics point out that whether the code is new or used makes no difference to the end user. There’s no tatty box, dog-eared manual or scratched disc to deter a digital downloader from buying second hand. Therefore, is this not just a way for Green Man Gaming to sell digital product for less? And what’s in it for the publishers?
“Pre-owned is pretty good for the consumer and encourages them to buy the latest releases,” adds Luzio.
“So publishers do get some small benefit from the current retail pre-owned market, as it monetises games and helps customers buy the next one.”
MD Paul Sulyok continues: “What we are proposing is something where everyone benefits. Every single time that game is re-traded, for zero cost to the publisher, they will get royalties.”
But attracting the publishers isn’t Green Man Gaming’s biggest challenge. The retailer has already got a series of companies on-board, from small indie studios to publishing behemoths. And the firm expects to have 2,000 games available on its website by the end of the year. Instead, the real challenge for Green Man is bringing in the customer.
Last week Valve revealed that its PC distribution platform Steam now has 25 million members, a number the distributor has built up over years in business. So how can Green Man Gaming hope to compete?
“The goal is to reach the bigger PC audience,” says Luzio. “We want people to play games, we want them to feel comfortable making their purchase, and we want them to feel that they haven’t wasted money as that product still has some value.
“Steam is a fantastic platform. They have carved a market for themselves. Obviously some of the products we sell will be similar, but we aim to increase the audience and grow the PC market.”
Sulyok agrees: “You have to take your hat off to Steam. They have done a great job pioneering the digital market.
“Our approach is slightly more open. We have multiple partners, across traditional retail outlets and non-traditional retail. Our objective, with Gian taking the lead, is to grow the digital market, and to think slightly out of the box – which I think we’ve done well so far.”
Indeed, Green Man Gaming’s other big plan is to sell digital product through online retailers. But this is hardly a new idea, with a wealth of white label packages already on the market – not least Gamestreamer and Metaboli. But this is why Luzio joined the team late last year.
During his seven-year stint at Play.com, Luzio helped the online retailer become a market leader in games – with the firm picking up three MCV Awards and two Golden Joystick awards in the process. He enjoyed similar success during a stint at The Hut Group last year.
So Luzio has views on online retail – and he feels the current white label model does not work.
“We are not offering a white label solution,” says Luzio. “We are offering to integrate digital product seamlessly into their current retail proposition and pay royalties in perpetuity on game sales.
“I come from a retail background, and I’ve seen a number of different digital platforms, but I’ve never been excited enough by them to implement their proposition.
“This is because they offer very little to the consumer.
“Retailers are great at selling games and expanding the audience, but they don’t just want to sell one product to a customer and wash their hands with that relationship. With our system, they will keep in contact with that customer and keep the revenue going.
“A white label solution is a bolt-on. A retailer signs up and then they wash their hands with it. We don’t want that to be the case with our service.”
Sulyok adds: “Our partners set us a challenge where they wanted to retain the customer on their site through their checkout. They did not want a white label service where customers have to drop off their website and go on a totally different site – albeit with a bit of their branding.
“With our service, things such as bonuses, discounts, promotions, cross-promotions and so on, remain within the partner’s shop. Customers can buy their groceries, or a book, or a t-shirt and get their digital download at the same time.”
A closer integration of physical online retail and digital could turn out to be more attractive than Green Man Gaming’s headling-grabbing trade-in concept. Luzio also didn’t rule out the possibility of users trading in their games at one of these retailers and getting money off something else in that store – such as a T-shirt or iPod.
But for all the promise, Green Man Gaming has yet to announce its publishing, development or retail partners. The website hasn’t even gone live yet, and industry commenters on MCVUK.com remain unconvinced that the trade-in concept can attract a wider PC consumer base.
“We know there are going to be sceptics and that we’re going to have to do some educating,” concludes Luzio.
“And we know we need to go from zero customers to loads very quickly – I’m very conscious of that. We need all the content providers on-board and then we need to hit the ground running when we launch.”