Digital distribution changed the music industry forever, and many think that games are heading along a similar path. However, Take-Two CEO Ben Feder doesn't think that games will almost universally shift over to digital distribution the way some are predicting.
“While an ever-growing segment of our fans are comfortable with acquiring content digitally, the retail channel will continue to play a valuable role in reaching the majority of our fans,” said Feder to MCV. “Overall, I believe that digital distribution won’t cannibalize retail sales of console games in the short-term. This isn’t the music industry all over again. Our industry has some of the best content protection via the consoles, which helps maintain the value of our IP."
"As you look at the history of the entertainment industry, new platforms have grown, not cannibalized, existing markets,” he continued. “VHS recorders almost doubled the size of the business for movie studios, despite fears that home entertainment would cannibalize theatrical revenues. Cable and pay TV had a similar effect for TV shows and movies. I believe downloadable content will ultimately grow the business for games publishers.”
Maybe Feder is being overly optimistic, but we'd like to believe that retail and digital releases will be able to exist concurrently in the future.
1 Comments
April 8, 2010
I hope he got a prescription for those meds he's taking. His historical reasoning is faulty. The most recent and relevant example of digital distribution is the music industry, and it's pretty clear that digital distribution is vaporizing that retail channel. Yes, it won't happen right away due to file sizes, but the camel's nose is already in the tent on all the consoles and handhelds. When bandwidth gets another shot in the arm, retail distribution will get a blow to the head.
Retail distribution will still exist in the next decade... it will just become a smaller and smaller share of the total over time. I think he is making these sort of statements more to keep GameStop happy than to reflect an actual belief... or maybe he does believe it to the exclusion of evidence to the contrary... which is all too common an occurence among executives these days.