Koch: ‘Nobody is abandoning physical’

Having won new deals to handle Sega and THQ games in Europe, Koch Media boss Klemens Kundratitz says a paradigm shift lies ahead for publishers on the continent.

The distributor expects more games publishers to abandon costly regional operations in favour of local partners as they try to invest more in growing their download offering.

This practise has already been seen by Sega and THQ, but Kundratitz stresses that this does not mean boxed products are a lost cause – instead they are more likely to be brought to market by traditional distributors.

Publishers will entrust their physical products to their own local teams as long as this is commercially viable,” he told MCV.

As the consolidation in our industry progresses, we will see different models of collaboration emerging between local value added distributors and global publishers.

In the foreseeable future traditional video games publishers will run a hybrid business model whichis firmly grounded on physical as well as digital revenue streams.

Unless publishers completely change their strategic direction nobody is abandoning the physical business. But a growing number of publishers may favour a network of strategic territorial marketing, sales and distribution partners over an in-house solution.

This is an important paradigm shift indeed and we as a pan-European independent certainly embrace this exciting opportunity.”

Kundratitz added that a new approach to boxed publishing will prove essential when releasing titles across the highly varied markets of Europe.

Europe is not some export territory,” he said. Europe as a whole – even if the UK is kept separate – is a major part of any publisher’s profit and loss and therefore it is of paramount importance that the network of local partners is well selectedand any inefficiencies between territorial partners are avoided.

Building and maintaining brands in key European territories is not something that publishers delegate easily and quickly, nor should they. Not many territorial distributors have the expertise and ambition to play the local re-publishingrole well.”

Under its new deals, Koch will handle distribution for THQ titles in Spain and Italy. It will also handle Sega releases in Germany, Switzerland, Austria,France and Spain.

Speaking about these new responsibilities, Kundratitz was delighted but cautious.

The success of these newly-forged partnerships will depend on whether or not the publishers remain fully committed to the physical business,” he said.

It will also depend on whether or not distributors are only aggregators in a consolidating business orthey add valueto all parties concerned.

Therefore we must ensure no less than first class service for all our partners.”

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