Business Approach for Video Game Physical and Digital versions *spawn*

[Cjail]

Didn't the original system grant a cloud/digital copy of the game automatically, no extra cost, after the online verification?

Anyway MS could follow Ultraviolet example and include in every physical copy a voucher/proof-of-purchases that allows you to download a digital copy of the game no extra cost.

 

[BRiT]

Didn't the original system grant a cloud/digital copy of the game automatically, no extra cost, after the online verification?

Anyway MS could follow Ultraviolet example and include in every physical copy a voucher that allows you to download a digital copy of the game no extra cost.

Yes, but then it was impossible to play with just the disc (without an online activation/verification). This is what the forum warriors were upset over -- the first time online activation and the 24-hour check-in for license revocation policy. They (FW) hated the fact that the physical disc was now worth as much as it costs to fabricate -- pretty much the $2 - $5.

Now why would MS sell you 2 games for the price of one?

 

[eastmen]

The forum warriors also claim its nothing like steam. But they are extremely similar with steam alliwing off line mode for some games while ms had the 10 friend game sharing.

The forum warriors just dont know what they want but it seems that if it hurts ms or makes trouble for ms they will take up the cauae and run with it

 

[AzBat]

Why does one price mean you're getting digital for free? Most likely they would increase the cost of the game to include digital. So before it was $60 for disc, but now it might be $70 to $80 for both disc & digital. To keep people from getting upset over the price increase they would need to continue to offer a disc-only version & a digital-only version at the original $60 price. What's the problem with offering choice? The FW fought for that, right?

Tommy McClain

 

[BRiT]

I'm all for choice. I wanted a choice. The FW took away my choice. They fought against it. They took away my choice of buying a physical disc with the benefits of digital copy.

However, I'm looking at it from an business economic standpoint. Does it make any business sense to sell 2 copies of a game for 33% more ($20 premium over original disc cost -- $80 disc vs $60 digital). Why would any business go for that when it's a 66% loss right from the start?

 

[Cjail]

Now why would MS sell you 2 games for the price of one?

MS, or any other publisher, would not only offer the best of both worlds to customers and thus a better service but also discourage buying used copies that would in fact not come with DD voucher included.
Also with your entire library simultaneously available digitally you would be less motivated to leave MS for a competitor and that is what MS wants.
Offering backwards compatibility in the future also would be much easier when your users already have a digital library.
Sony wants to offer BC with Gaikai and MS would be able to do the same.

 

[eastmen]

MS would not only offer the best of both worlds to customers but also reward those that bought new which is a great way discourage buying used copies that would in fact not come with DD voucher included.
Also with your entire library simultaneously available digitally one would be less motivated to leave MS for a competitor and that is what MS wants.
Offering backwards compatibility on Xbox Two also would be much easier with a digital library.
Sony want to offer BC with Gaikai and MS would be able to do the same.

But before MS would just have everyone ready for the future. You know like our grandma's on iphones are already in the future compared to the cutting edge systems that still aren't released.

But Forum warriors appear to be scared of any change which is very ironic to me

 

[Cjail]

To me FW are a living paradox: they spend their lives online but when a console requires them to be online once every 24 hours the worlds ends.

Anyway MS still has the chance ease customers into the future of always connected conses, digital delivery, could technology, and so on.
Thy just have to make the right steps.

Not all is lost in my opinion.

 

[hesido]

If you believe the billion dollar company changed their billion dollar marketing scheme because of forum warriors, you'll be quite off the mark here.

Also, the 10 member game sharing plan needs special mention, since it was taken away by the mighty forum warriors. It doesn't really make business sense, does it, for 10 people, with 2 at a time, to access the content. Personally I don't think such a wonderful scheme ever existed, but if you do, please care to explain how that was OK with MS.

I'm all for choice. I wanted a choice. The FW took away my choice. They fought against it. They took away my choice of buying a physical disc with the benefits of digital copy.

You mean, being able to sell your physical copy is not an option? It was removing an option. All the games would be sold as digital copies. So that is a reduction in options in the market. The only thing it saved you from was the download. You still have that option.

 

[Cjail]

If you believe the billion dollar company changed their billion dollar marketing scheme because of forum warriors, you'll be quite off the mark here.

MS changed his online polices because they received much negative feedback from customers, media, investors and so on.
FW are just a particular category of customers.

 

[dagamer]

Why does one price mean you're getting digital for free? Most likely they would increase the cost of the game to include digital. So before it was $60 for disc, but now it might be $70 to $80 for both disc & digital. To keep people from getting upset over the price increase they would need to continue to offer a disc-only version & a digital-only version at the original $60 price. What's the problem with offering choice? The FW fought for that, right?

Tommy McClain

You realize that's two copies of the game for just $40 right? Dead in the water already.

As for offering a disc-only and digital-only version, that's what we have right now. It should be clear though, anyone wanting to instantly swap between games, particularly multiplayer ones, should always go digital, never disc.

 

[AzBat]

I'm all for choice. I wanted a choice. The FW took away my choice. They fought against it. They took away my choice of buying a physical disc with the benefits of digital copy.

I'm with you there too, but what's done is done. Time to move forward with a plan that the public is more open to. Seems the way the movies are done is a good as any place to start.

However, I'm looking at it from an business economic standpoint. Does it make any business sense to sell 2 copies of a game for 33% more ($20 premium over original disc cost -- $80 disc vs $60 digital). Why would any business go for that when it's a 66% loss right from the start?

I would ask the movie companies too. How much are they giving up by giving away DVD + Bluray + Digital Copy? They have evidently seen some figures where a certain percentage of digital copies are not getting claimed. It's a numbers game. So the question becomes at a given price how many digital copies would be claimed? At a $20 premium would there be 100% uptake? I don't think so. Would it even be at 50%? Not sure. I think the movie industry with its the digital copy & UV trade-in program has shown that the public are warm to the idea & so far it doesn't look like it's such a loss that the companies are no longer interested in continuing it. I don't think Microsoft, Sony & publishers would be any worse if they followed suit.

Tommy McClain

 

[dagamer]

I'm with you there too, but what's done is done. Time to move forward with a plan that the public is more open to. Seems the way the movies are done is a good as any place to start.



I would ask the movie companies too. How much are they giving up by giving away DVD + Bluray + Digital Copy? They have evidently seen some figures where a certain percentage of digital copies are not getting claimed. It's a numbers game. So the question becomes at a given price how many digital copies would be claimed? At a $20 premium would there be 100% uptake? I don't think so. Would it even be at 50%? Not sure. I think the movie industry with its the digital copy & UV trade-in program has shown that the public are warm to the idea & so far it doesn't look like it's such a loss that the companies are no longer interested in continuing it. I don't think Microsoft, Sony & publishers would be any worse if they followed suit.

Tommy McClain

Movie industry has already made its money when movies are sold at retail. Any extra revenue they see is profit. Remember, they aren't giving you three high quality copies of the movie, just one HD and two SD copies. SD copies that would be painful to watch on an iPad or a decent sized HDTV.

We're talking about changes affecting companies primary business model here, not ancillary income as in the case for Bluray sales. A blockbuster flop almost never becomes a success based on DVD sales.


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[AzBat]

You realize that's two copies of the game for just $40 right? Dead in the water already.

Look at the movie industry... You can get 3 copies of a movie(DVD, Blu-ray & Digital Copy) for as low as $5 a piece. They even have brand new movies coming out where you can get them for about $8 a piece! And $10 a piece if you include Blu-ray 3D. And you're squabbling over a $40 per game cost? Dead in the water? I don't think so. Should even help curb the used-game market.

http://www.walmart.com/search/searc...earch_sort=4&pref_store=358&ss=true&ic=32_32&

As for offering a disc-only and digital-only version, that's what we have right now. It should be clear though, anyone wanting to instantly swap between games, particularly multiplayer ones, should always go digital, never disc.

I brought those up for those that don't want to pay a premium for copies they do not want. Plus, it helps subsidize the cost of the disc+digital versions.

As for swapping, I agree. This is where I will probably start when I eventually get a Xbox One. Unless of course for a few bucks more I can get the disc too.

Tommy McClain

 

[dagamer]

News & Rumors: Xbox One (codename Durango)

Look at the movie industry... You can get 3 copies of a movie(DVD, Blu-ray & Digital Copy) for as low as $5 a piece. They even have brand new movies coming out where you can get them for about $8 a piece! And $10 a piece if you include Blu-ray 3D. And you're squabbling over a $40 per game cost? Dead in the water? I don't think so. Should even help curb the used-game market.

http://www.walmart.com/search/searc...earch_sort=4&pref_store=358&ss=true&ic=32_32&



I brought those up for those that don't want to pay a premium for copies they do not want. Plus, it helps subsidize the cost of the disc+digital versions.

As for swapping, I agree. This is where I will probably start when I eventually get a Xbox One. Unless of course for a few bucks more I can get the disc too.

Tommy McClain

See my post above, movies don't make their money from Bluray and DVD sales, which is why they are free to experiment with whatever business model they want as the alternative (piracy) is worse. When messing with your *primary* business model, a company/industry never goes down that road until they've hit rock bottom (and I mean, real rock bottom). See the music industry. Same with the TV industry, everyone wants them to change but they have no financial reason to do so.


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[AzBat]

Movie industry has already made its money when movies are sold at retail. Any extra revenue they see is profit. Remember, they aren't giving you three high quality copies of the movie, just one HD and two SD copies. SD copies that would be painful to watch on an iPad or a decent sized HDTV.

We're talking about changes affecting companies primary business model here, not ancillary income as in the case for Bluray sales. A blockbuster flop almost never becomes a success based on DVD sales.

You make a good point about movies making money first from the box office, but I'm not sure I agree that DVD/Blu-ray/Digital Copy is just ancillary income. Not all movies are released at the box office or have a long theatrical run. Plus, the time between box office & home market is short(sometimes a couple of months). Home market is the long tail. Some movies probably pull in the majority of their money from those sales.

Tommy McClain

 

[BRiT]

The other part of why I think the MPAA/RIAA is going forward with it's cheap/free digital copy program is because it shows consumer good-will and possibly to starve off the massive pirating of their media. (Now if that's as wide-spread as they claim it is, is an entirely different matter, but for this conversation let's consider it to be true.)

Of course video games on consoles is vastly different, where the mass pirating doesn't happen. However what the console area has is massive second-hand sales that deprives publishers/developers. (Now if that's as wide-spread as they claim it is, is an entirely different matter, but for this conversation let's consider it to be true.)

I don't think MS/Sony/Pubs would be any worse off than they are on XB360/PS3 second-hand sales situation with a $70-$80 Physical Disc + Digital Version. At least they'd get another $10-$20 out of it immediately as opposed to $0 currently.

I think it could work, but think the vocal majority has misplaced where the real value should be at. I think they had exactly the right approach to begin with where the physical disc was only worth $5-$10 and the $60 Digital License was were the real value is at. Add in a capability for users to digitally sell their $60 games for $30-$40 after an initial no-resell period (3 months?) and it could have been something wonderful. I've never seen any used game trade-in system where the value was ever more than 50%-66% the cost of a brand new game.


Hrm, this entire discussion should likely be moved over to another existing thread.

 

[dagamer]

You make a good point about movies making money first from the box office, but I'm not sure I agree that DVD/Blu-ray/Digital Copy is just ancillary income. Not all movies are released at the box office or have a long theatrical run. Plus, the time between box office & home market is short(sometimes a couple of months). Home market is the long tail. Some movies probably pull in the majority of their money from those sales.

Tommy McClain

I call it ancillary because its not primary. A movie isn't going to gross $200 million from Bluray sales. And I'm sure some movies do make more from their retail release than their theatrical run, but is that really a measure of success? It's that a desirable outcome? Not really.

Regardless, movies and games aren't the same and we shouldn't treat them as such.


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[Shifty Geezer]

A lot of movies fail to break even, same as games. I think Hollywood has a much better culling policy though. Those digital services may not be especially profitable for the studios, but it's possibly better than not offering the services and having people invest in ripping their films.

I don't think we should be looking at other platforms for evidence of the ideal solution. These systems are very new and their real financial impact, good or bad, can't be determined yet.

 

[hesido]

I think "install as digital" while the disc retaining value as providing a game would / could still allow publishers to make money in the second hand market, maybe that option could be 10$-20$ for the initial buyer as the disc would come with a unique identifier (like it does now) and full price after that, or maybe it would be as simple as having it the same as the digital download all through out, first or second hand.

Currently, as it stands, once the disc is out there, publishers can make no extra money. But once you give people the option of going digital for the comfort of it (instant game switching, no worries of losing / damaging the disc, at the expense of second hand value), publishers could see continued income from these discs, and any extra income should be welcome. Especially with the disc making the transfer of digital data convenient for people with slow internet speeds, but still would like a digital library, this could be a viable option.

Also, if they want digital to prosper so much, they should make digital versions slightly cheaper (60$ disc, 55$ digital). But I guess publishers / platform holders have too much stake in retail, that they can't "afford" to do this.