GAME OVER: IS THIS THE END OF THE GAMING DVD?

Gamers worldwide have been following stories of Game UK’s demise with increasing curiosity.  A lot of Indian gamers were disappointed to see the store go into administration.  Admittedly, most of us based our best wishes for The Game Group based on our experiences (and cheap prices) with their website.  Those closer to the erstwhile retail giant’s physical stores felt otherwise.  For instance, here is a comment from a reader from the Guardian’s coverage  of the event that sums up a lot of what customers in the UK are feeling:

“Ask any gamer why they don’t shop at Game anymore. Price. Range. Poor Customer Service.”

The Game UK Website wore a "down for maintenance" notice as well.

Those are probably the three most important things that drive any business — it doesn’t matter whether the business is a brick and mortar store or an online site.  While our assessment of the coverage shows that Game’s outcome was driven by a series of incorrect business decisions, it does belie the question: what about the gaming market?  Will all stores eventually close?  We have seen how the music industry has been taken over by online (legal and illegal) downloads and no-one ever buys CDs anymore — is that what will happen to gaming as well? Considering how we are investing our lives savings into the GamesINC franchise, you can imagine how important this was for us.

But like what any business should do before they launch, this is one of the considerations we took into account early on.  And it is being supported by those in the industry sharing their opinions in the wake of Game’s demise.

Our take is that we are still between five and ten years away from going completely digital (more infrastructurally advanced countries may see the change in five years and we expect India to make the shift in 7-10 years).  So here is our no-numbers (well almost) quick assessment of the future (we can’t share all our IP on our blog now, can we?):

Software Requirements

Video graphics have come a long way in the last decade.

The top reasons why we love the console — the graphics, sounds, and features — eventually translate into massive software storage requirements.  An XBOX game can take up to 8GB in storage whereas a PS3 game can go beyond 15GB.  A digital download that size is still a nascent possibility in the UK and U.S., and a near impossibility in “fair” usage policy afflicted India.  Even without fup, I’d feel a tinge of guilt spending all my bandwidth on games — sort of like the guilt you feel when you print out a hundred pages on your work printer.  With time, the size of games will only increase, not decrease.  That said, there is a distinct possibility that — if the XBOX720(?) and the PS4(?) allow — the market moves to SD cards as an alternative to DVDs.  That will possibly be a step in the right direction and will enhance the lives of our consoles significantly.  In either case, there will be no impact on online and physical retail stores who will still have something to sell.

Internet Infrastructure

The biggest bane of online downloads is not fup, but overall infrastructure support in the country.  Downloading a 8GB game is hardly the same as downloading a 100MB music album.  Chances are high that even before games are delivered online-only, movies will take the plunge.  If a large proportion of the customer base moves to streaming videos, DVD and BluRay downloads, and game downloads, free bandwidth will become scarce.  Our Airtels, BSNLs, and Reliances will hardly be able to keep pace with the upgrades required. Of course, not all of these scenarios will come to pass all at the same time, so I am admittedly being more catastrophic than the situation demands.  However, if you look at how our ISPs have taken a reactive, almost regressive, stand toward business and have focused on acquiring customers that they know they won’t be able to sustainably serve with the current infrastructure, we see a lot of pain in the coming days — with or without massive digital downloads.

Compare your speed to those around the world and you can see that we are not nearly ready. Source: http://bit.ly/GYWiAs

Business Sense

The most important factor that will determine whether the gaming world goes digital is the amount of business sense it makes.  When Microsoft launched the XBOX, it was estimated to be losing $125 per box just on cost of goods.  It takes a lot of time, effort, and R&D money to design a new console — 10 years is a completely legitimate timeframe for such companies to ride the tide.  Companies will still make money through online sales of passes, DLCs, and (some) games.  It was only about 4 years ago that Microsoft started to make money off its console business and followed it up with about $1Billion in profit in early 2011 thanks to the Kinect.   It is too early to try to change the entire gaming environment by moving to digital downloads.  Remember the first XBOX and the red ring of death?  If Microsoft tries to change its hardware in a way that goes beyond extracting more performance, then it might well run into another couple of years of technical nightmares.  Its not that they can’t build a great system, but that it is unreasonable to expect that the first attempt will be perfect.

Beyond the technical aspects, there is also an entire logistical and delivery system associated with ensuring that a game DVD reaches the end-user.  A new delivery channel — technical and server upgrades for every publisher wishing to offer digital downloads, for instance — will need to be built. That does not come overnight.  We can speculate all we want on what the new XBOX720(?) or the PS4(?) will bring, but one thing that new consoles will not bring is automated upgrades for all service providers in the value chain.  It is still possible, but this will not be the revolution everyone expects — it will in fact push back innovation by a couple of years while we transition to the next infrastructure and game publishers themselves understand the new platform.

The change from physical media to online digital downloads cannot be avoided and will happen, whether some of us want it or not.  Companies, suppliers, and retailers will have to innovate or die.  But it is still a few years out in the future.  In the meantime though, it is not business as usual.  In India, we have a lot of work to do.  Unlike most other ventures — online and offline — the gaming market itself is nascent here.  We can’t sit back, look at those burgeoning numbers that consultants share with us, and expect the money to keep flowing in.  India is still not taken seriously as a gaming market.  We retailers, developers, and gamers have to build the market together.  But that is a story for another time.

How far out do you think the digital media revolution is?  Do you think Indian infrastructure and gaming market is ready for it?  Share your thoughts in the comments below.

Research and articles sourced from:

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THE TROUBLE WITH VIDEO GAMES ISN’T THAT CHARACTERS ARE DICKS: IT’S THAT THEY ARE EASY SCAPEGOATS

The inappropriate laugh that came out of my work cubicle pierced the office silence and brought stares of disapproval from my way-too-serious coworkers. I ignored my colleagues who were driving business results through PowerPoint presentations and returned to Charlie Brooker’s hilariously written blog “The trouble with video games isn’t the violence. It’s that most of the characters are dicks.” I was so amused by the blog, I shared it with all my friends and posted it on the GamesInc Facebook page.

A few days later, as I was doing the level in Modern Warfare 3 that brought Charlie’s sudden flash of introspection and moral righteousness, the same sense of moral righteousness overcame me. I was not disturbed that I had to slit a guard’s throat in a cold and professional way. I was outraged at Charlie’s affront. How dare he judge these characters?

Video Game Characters Live In A Crazy World - Picture From Modern Warfare 3 Where The Russians Decide That Invading New York Is A Good Idea.

Your characters (Yuri, Price of the moustache, and Soap of the bathhouse) are infiltrating a military compound in Sierra Leone where soldiers are busy executing civilians, and to make a bit of extra cash, are also selling chemical gas to terrorists planning to deploy it throughout Western Europe. And instead of taking out the guard silently to ensure silent infiltration, Charlie would have you ask the guard, nicely, to leave. Now, admittedly, I’m not a psychologist and my lack of emotional intelligence is only matched by my inability to find my car keys every morning.  However, I would assume that suggesting to the heavily armed guard that butchering innocent civilians is probably not as fulfilling as a career in HR or customer service may not be the right move…you might end with a knife in your throat possibly?

Charlie Borker argues that violence is not the issue, he is desensitised. No kidding! Just turn on the news or live in a wartorn country and you’re all good on that front.  The issue according to him is that the characters are dicks. These guys are special forces operatives trying to save the world, and they are being judged as dicks for slitting the throats of terrorists. A bit harsh maybe.  What Charlie missed in his post is that the worlds they live in, not the characters, are the problem. Your characters live in a world where a terrorist has destroyed half of Europe swiftly followed by a Russian ground invasion (poor Europe, an economic crisis and now the Russians invading—how far the continent has fallen since its heyday of world domination).  Are we really surprised your characters need to use brutal measures to stop a crazy terrorist? The world they live in has made them do unthinkable actions, but despite it all, they keep their sense of purpose and camaraderie.  They are not dicks, they are heroes!

And this is similar in most video games, characters mostly (emphasis on mostly) have admirable characteristics in the often harsh, immoral, crazy, or even evil worlds they live in. Take the Grand Theft Auto series for example. In all of these, you are a thug with little opportunities in life due to a difficult upbringing in a dog-eat-dog environment.  You go around the city stealing cars, beating up people, and even killing people. And what for? To survive and succeed. Now, take the business world. The most successful business men/women get to the top by not always being nice. They deal with difficult situations and overcome them through often tough and sometimes downright unpleasant actions. What is the difference between that person and your GTA street thug? The GTA thug is an exaggerated projection of a modern businessman merged with a petty thief.

Charlie Brooker has got it wrong. The trouble with most (again, emphasis on most) video games is that the characters are too good. They have courage, moral values, and determination which make the rest of us look petty, weak, and immoral. And some of them such as Batman, Prince of Persia, and Zelda are downright Saints!

Iraq Bombing

Is The Real World Less Crazy? - The Coalition Of The Willing Looking For Weapons Of Mass Destruction In Baghdad (No Irony There).

The world they live in forces them to take actions which sometime offend our moral sensitivities. These worlds are a projection of our world and morale values through the lense and imagination of a storywriter/producer. And how different is that from Hollywood?  It’s not – we should judge games as we judge movies.  Some have great storylines and characters, some have terrible storylines and characters (and that can ruin the game as we blogged before) .  But it remains entertainment – let’s not forget that.

Now, back to the real world of my company and my PowerPoint presentations that make a difference. Tonight I will return to the crazy world of Modern Warfare 3 where I’ve just lost a close friend, and I need to storm a fortified castle in the Czech Republic. But if I turn the real news on, I would see stories of the Syrian Regime massacring its population, NATO trying to figure out what the hell to do in Afghanistan, and undoubtedly some successful or unsuccessful terrorist attack somewhere in the world (pick your country, you’re not short on candidates). It’s a strange world we live in…

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