[quote name='SaraAB']They are making a lot of money on download codes because they are the only store where you can go and pay cash for download codes. Even if they make a small amount on each code I bet they sell quite a lot of them. A lot of people want to buy DLC but don't have credit cards to do so with. Though I don't understand why people just wouldn't buy points cards with their cash and go and spend the points cards on what they want from the marketplace.
I don't think GS will be able to sustain a whole business model on selling download codes for cash though. The ideal would be if they would set up a kiosk where you could insert cash and get download codes that you go home and enter onto your console.
I like the idea of being able to purchase DLC items individually instead of having to buy a points card, where you ultimately get leftover points or dollars in your account that you can't use (but most casuals probably won't care about this). I am not sure why you can't just buy something individually with a credit card on the online marketplaces, doesn't make a whole lot of sense to me, but if retailers can fill this void then that would be great.
The casual gamer expects that they would be able to buy a disc, go home, play it then trade it back into GS then use the credit to buy more games and if the gamer is casual enough they will probably just be sticking with their Xbox 360, Wii or PS3 when they find out about no used games, if it actually happens. The casual gamer might also not connect their systems online, which means they want to put a disc in and play it and that is it. This also means they could be excluded from this gen if the systems do not function without an internet connection. This would be bad because gamestop sells a lot of copies of call of duty and madden to this group! The trend I am seeing is the casual computer and game users are just switching to phones, they don't have a computer and internet connection at home, they just use their smartphone for everything. I know quite a few people who have this setup.
The extreme casual gamer has already been converted to iOS devices or their cell phones, or they are already happy with the Wii and the 3 games they own for it so they are not really relevant to Gamestop right now. I don't think this type of gamer can be sold on another Wii right now, as 99% of them have already converted to iDevices. They won't pay $200+ for another games system and $50 games when they are satisfied with 99 cent apps on their cell phone which they already have. The value of 99 cent apps is undeniable right now, and even I am in the group that does not want to purchase another portable device because I am happy with my iPod touch. I have a DSi too, and a ton of gameboys, so if I want to play a RPG I am good, and I have plenty of those. But I could easily, and very easily live off of an iPod touch alone for portable entertainment. I won't be purchasing a 3DS and its $40 games anytime soon that's for sure (also, I can't see 3D).
Gamestop's iOS device trade in program is more for gamers who want to get store credit for their old devices, I don't see this being too relevant for the extreme casual gamers, because they won't really have a use for GS store credit.[/QUOTE]
Gamestop is starting to circle the drain, much like Blockbuster ten years ago. I just didn't expect to see see such a definitive sing this soon. ("Yeah, it's a sign all right! Going out of business!")
I had the same thought. Why wouldn't they just buy a points card? Then I remembered, there is no margin in points cards. At best it's like selling lottery tickets where the store pockets 5 cents on each dollar ticket sold. Content sales probably offers a bit better incentive for the store. But not enough to keep it aflot as time goes on and people are more and more accustomed to buying downloads. I do expect an interim stage will be the equivalent of the Redbox DVD rental machines in supermarkets today. As braodband penetration and throughput improves there is going to be a declining market for those. But for now it is the last gasp of a business that used to have a good sized space in nearly every shopping area in the country.
The heart of the casual gaming world today is downloads to phones, tablet, consoles, PCs; and web based, so if anything that sector is more than ready to never buy another disc. The capability of web browsers for gaming have advanced by leaps and bounds recently.
I'm not a hardcore gamer but far from casual either. I got a Samsung Galaxy SII in February, after four years on a Blackberry that lacked even WiFi. Last week I finally gave in and got a 3DS due to the Target promo price, although I PMed it at BB so I could get the points and put it on my TRU credit card for yet more points. (Whee! Points, points, everywhere!) Part of this was that there are now a fair number of good $10 games for 3DS now, and the Best Buy B2G1 Free this week got me some of the high-end titles for a lot less than MSRP. Though I'm holding off on anything else unless it's $12 or less. I'm past my new platform indulgence and can exercise restraint now.
All of my phone games have been freebies from Amazon or very low priced items from the Android Market but I have noticed there is an increasing number of higher priced items. I strongly suspect the smartphone market is reaching a new group of players who would never have bought a gaming handheld or at least wouldn't be seen with one. But they want more than Angry Birds. We're now seeing ports of early Final Fantasy games on iOS, among others, commanding much higher prices than 99 cent casual exercises.
http://www.maclife.com/article/gallery/23_musthave_rpgs_your_ios_device#slide-0
The iOS and Android game markets are growing to take more and more of the market once reserved for dedicated handhelds. They won't get all of it but Nintendo and Sony have to work harder and be more price competitive with their digital offerings. And this also means the dedicated handhelds shift more toward online sales. A few percent here, a few percent there... Pretty soon there isn't a market for dedicated game stores.
iOS and Android users have so far been willing topay higher and higher prices if the content is up to snuff. There will be a middle ground marking how high they can go and how low the consoles will go for high-end content. I expect it will be somewhere between $30 and $40. Some games that appear cheaper will be episodic and really amount to the highest price point if all of the content is played through.
One thing I found interesting about the 3DS is that Nintendo has loosened up their restrictions on where downloaded software can live. On the DSi (including DSiWare on the 3DS) games must be in the onboard storage to be used. On the 3DS you're free to use as a big of an SD card as you like to host your purchases and you can easily copy over the 3DS content folder from one card to another. Another little sign.
I don't recall if I mentioned this before but I've noticed more and more console games are coming without a real manual. Just the legal boilerplate and enough info to tell you where to stick the disc. The full manual is on the disc and presented on screen. The putative reason for this is 'being green' but it also better positions games for online sale as the primary venue.