The digital age has given rise to thousands of games developers releasing titles on Steam, mobile and consoles. Sold Out sales director James Cato believes there's room at retail for these studios, too...
An MCV article (May 23rd, 2014) set industry tongues wagging by suggesting that over two-thirds (72 per cent) of consumers are buying boxed products only. Whilst digital delivery continues to excite the industry – us included – it seems that our consumers like something tangible.
Many of our customers like to collect. It's very difficult to display a collection of ones and zeros on a shelf. Indeed, so healthy is the physical market that some of the top five games publishers predict that their digital revenues may only account for around 10 per cent of their boxed sales.
Although the dominance of Steam's 85m PC consumers cannot be questioned, it seems the majority of buyers still like to hold a physical version of their game. Core gamers in particular have a genuine affinity with special edition sets – with many of these SKUs actually raising the price point, thus increasing both life cycle
Retailers have for years known that PC is the medium that generally delivers the richest, most graphically pleasing gaming experiences but, more importantly, PC is an area that also delivers the greatest gaming margins.
"Many of our customers like to collect. It's
very difficult to display a collection of ones
and zeros on a shelf. Indeed, so healthy is
the physical market that some of the top five
games publishers predict that their digital
revenues may only account for around
10 per cent of their boxed sales."
Meanwhile, download charges in certain territories combined with the sheer size of the PC game means that the good old PC disk is still punching above its weight by delivering way over that forecast revenue – with boxed console income equally valuable.
Boxed releases offer a growing market where prices are high and customers buy with a much greater attachment rate than the traditional two to three games per year the console marketing figures indicate as consumer demand.
The more things change, the more they stay the same. I have spent decades working with our partners to maximise life cycle revenues. By all means create new digital opportunities but the more revenue-focused operators will not overlook the lion's share of revenue.
Our recent partnerships with Rebellion and Team 17 helped both to maximise revenues with the releases they published together, but it is not just the longer established companies that recognise the value of these revenue streams. Sold Out has been preaching the message to the new wave of indie devs who don't realise the amount of money they are leaving on the table by only releasing a digital version.
Indies are realising that it takes very little effort to develop a whole new revenue stream. Digital may grab the headlines, but there's plenty of life in physical yet.