Last week, MCVuk.com revealed that Microsoft has told its partners that the Next Xbox will not include a disc drive.
It's a bold move – and one that sparked passionate debates and misconceptions about the birth of digital-only home consoles.
While the next Xbox will feature no disc drive, sources tell us it will offer some sort of interchangeable solid-state card storage.
Whether this will be a new proprietary form like that of Vita, or a standard format such as SD, this will keep an avenue open for retailers to participate in.
PLAY YOUR CARDS RIGHT
The Hut Group's business development head Sarah Jasper says keeping retail involved is vital: An iTunes-style buying revolution is probably quite some time away. If the new Xbox ends up using a smaller cartridge, I would see this as a positive. Products would take up less weight and space, making them cheaper and easier to dispatch to customers.”
Mastertronic's Andy Payne adds: Xbox must offer backwards compatibility for gamers, otherwise Microsoft risks losing millions of core Xbox gamers.”
Retail also plays a role that digital currently does not: catering to the mainstream, casual and impulse buyers.
A large proportion of content sales are driven by impulse,” explains Tesco entertainment boss Rob Salter. The challenge for publishers is securing the extremely valuable real estate required to serve that impulse – either space in-store or online. So a switch to other forms of packaged goods could be desirable for both retailer and publisher.”
But Game Guide editor Chris Ratcliff warns that retail will not be able to rely on boxed media alone: A specialist retailer cannot exist in a fractured boxed and digital market unless they embark on some sort of diversification.
Many former specialists now sell action figures, mobile phone accessories, LEGO – the new specialist indies are an Aladdin's cave of boys' toys – I even know of one where you can buy a full-scale working Dalek.
Games will be just a product that will sell at next to no profit to keep the footfall to sell high margin gadgets and accessories.”
HMV has long since been expanding both its portfolio to sell more than just standard boxed products.
There is plenty of scope for retailers to remain a vital part of the process so long as they ensure that their offer is a multi-channel one,” says PR boss Gennaro Castaldo.
The key thing is to create content that excites consumers. Get that right and, as we have seen with Vita and Mass Effect 3, and there will be opportunities for retailers across physical, online, digital – or a combination of all three.
The change will come whether we like it or not, so the key is to embrace it and see what new opportunities come out of it.”
Jasper adds: You could argue that digital-centric home consoles already exist. The popularity of points cards demonstrates that there's still a sizeable number of people who enjoy purchasing physical goods over digital ones, or who aren't likely to become au fait with the digital marketplace just yet.”
Regardless of what types of physical media carry games going forward, some companies believe the day of the disc is over.
WHAT'S A DISC?
Instead, some claim the future lies in solid-state cards and online products that will be activated at the point of purchase.
The disc business is inherently a high risk one, where content value is recognised on manufacture not demand,” says Salter.
A shift to a world where nothing is valued until it is sold, whether physical or entirely digital, is a highly desirable one for retailers. The current model is wholly unsustainable.”
The Xbox 360's successor could be the first home console to centre its sales around an online marketplace. And some publishers believe that a disc-less Xbox would still embrace retail.
Rather than aping Sony's PSPgo – an ambitious but failed attempt at the model – it is more likely to follow the recently launched PlayStation Vita, striking a balance between physical and digital.
THQ marketing director Jon Rooke adds: It is more likely that the disc-less Xbox would be one of two or three SKUs aimed at the high-end connected gamer – like Microsoft did with the Xbox 360 Arcade, Premium and Elite.”