Microsoft wants “Competitive Pricing” for digital games
Microsoft’s mouthpiece “Major Nelson” recently suggested that competitive pricing for digital Xbox One games is “on the agenda”. This has raised a few questions in the industry, our shop was contacted by a gaming magazine on our opinion on the matter. I gave them a quick response & decided to extrapolate them properly into an article.
One of the questions we were posed with was wether Microsoft could initiate digital prices low enough to compete. They can definitely compete with most of the high street on new titles, especially when they’re handling games they publish themselves. When it’s third party publishers, I’m sure they’ll be able to broker a deal both parties are happy with. If Microsoft had their way, this would have been an all digital console. It recently surfaced that the Xbox One almost shipped without a disc drive, the only reason they added one was the suggestion that consumers would require huge bandwidth for downloading 50GB games. I suspect that the next revision of the Xbox One may be digital only.
We were then asked if we thought consumers would really ditch retail over cheaper digital. Lots of consumers go for convenience, this is one of the big reasons why the bricks and mortar stores struggle these days. Many shoppers rely on online purchasing. The whole process has been even more streamlined in recent times. Most people have dedicated retail apps on their phones, they can look up a game and order it within minutes and it can arrive on their doorstep a day later. The in store benefits and appeal are losing their footing with the masses, as it does so, I think the physical disc loses some of its merit. They often already add exclusive content for digital releases, with prices becoming more competitive it’ll only make things harder. How can shops like us convince people we’re the right outlet to acquire games.
The last main enquiry was about the impact on retailers who would sell the console. The impact on us selling machines is huge, we’d probably just not stock the machine. We make a pittance on selling the Xbox One, the idea is that we gain a customer from each console sold. If the console is the last line of income from each customer, why would we stock it at all. The opposite side of this is the impact retail support has on consoles, it’s a big difference, ask the PSP Go how much retail support matters. A concept that seemingly died instantly, mostly due to retailers not benefiting from its sales. If the Xbox One had a bigger install base, I think they’d stand a better chance of making this work. If they lose shop support so early on, they’ll only trail Sony further in the eighth generation race.