MY sales are better than YOUR sales!
If you’re into entertainment, the United States is a great place to be. Finding it is simple enough: drive into a city, walk into any media emporium, and find movies and music from all over the world. If that’s not enough, there are thousands of games to choose from too, created by developers from numerous countries and released across a bevy of platforms. These booming industries are a shining example of our materialistic, consumer-oriented world, which means a lot of money is involved, and no one will make peaceful concessions about who’s making the most.
Take the recently released annual report from the EMA group, which states that the total sales of games, consoles, and accessories were higher than the sales for DVD movies. If you take away the hardware portion of things, DVDs take the top spot with a lead of around $7 billion. However, these numbers don’t include used game sales. 49% of GameStop’s first quarter profits came from pre-owned titles, derived from a $415 million gross. That’s only one quarter’s sales, and it doesn’t include what people picked up on eBay or at their local Blockbuster.
The industry tends to ignore used sales because that doesn’t put any money in the pockets of developers and publishers. Nonetheless, millions of consumers buy pre-owned product, both in game and movie form, although GameStop is forever broadening its used sales scope while retail movie chains are narrowing theirs. To compensate for this cutthroat competition, more new games are being released at bargain prices, and both markets are pushing to increase digital distribution sales. Despite their best efforts, a meager $5 savings is enough to persuade people into purchasing used.
We’ve all heard people say that games would have already won this war if they cost $19.99 when first released. That doesn’t account for movie theater ticket sales, but DVDs have been outselling those for years anyway. It’s taking the biggest share of the market — the home spender — into consideration, and it’s easy to believe games would’ve sold to the tune of billions more if they were that cheap. To get them there, however, developers and publishers would have to function with smaller budgets and less manpower, and their costs are only rising. They work hard only to be stabbed in the back by dipping retail prices and rising pre-owned sales.
Undoubtedly, more developers will collapse under the pressure. Budgeting challenges won’t go away, and the cheaper and unstoppable “casual industry” could overwhelm the entire market to become the true rival for DVDs. The fight for the biggest numbers overall could prove exciting for price-conscious consumers, and may be rougher on the creators of their beloved products. No one can predict what will result, and everyone hopes it isn’t going to be an endless stream of EA-branded clone games, but surely, this battle between the two entertainment industries will rage on for a long, long while.
This blog article should be recognized as the sole opinion of the editor and does not necessarily reflect GotNext’s official position on the subject.
Tue 27 Jan 2009 - 3:16 pm
