As the world goes digital a lot of attention has been dedicated to the fact that jobs and fields will no doubt be disrupted. It’s a fate we’ve already accepted started seeing this shift locally, as last year Standard Chartered closed 7 branches as part of their transition.
A group that has concerned me for a long time, are the guys that sell games at Avondale flea market (guys who sell physical copies). The stats show that the way people buy and play games is changing and there are some serious warning signs, that put them at risk of losing their jobs. With my view from the outside looking in I wonder how they’ll deal with the following shifts:
Disc-less consoles
Earlier this year, Xbox released the disc-less Xbox One, which is the first threat to the merchants reselling games locally. If Microsoft had gotten their way from day one, Xbox One would have come out with a DRM system that made it impossible to have one disc work on more than one console. This would have wreaked havoc on the resellers way earlier than they imagine but thankfully, the console buyers resisted that move strongly and the backlash from Microsoft’s proposed move was one of the main reasons why Xbox sold far fewer consoles than the PS4 this generation.
Unfortunately, as internet access spreads (especially in the console maker’s target markets) the consumers who resisted a digital-only console are now much more welcome to the idea than they were back in 2013.
And the data seems to support this…
Consumers buying digital versions over physical copies
In January, Eurogamer ran with a piece titled UK video game sales now 80% digital. The convenience of buying online along with the fact that multiplayer experiences can now be enjoyed online, it gets harder and harder to justify buying physical copies which can get damaged or misplaced.
Unfortunately, the way we experience games in Africa is largely different and because we don’t buy enough consoles/game copies it’s hard to justify companies making decisions with the African demographic of gamers as their primary concern.
Even though I say this, Africa itself is fragmented and not so long ago I started buying digital versions of games myself. Why? Not because I hate my local brothers but because buying FIFA 19 (not a big FIFA fan by the way) on the PS Store costs US$60 whilst buying it locally costs US$90+. It’s far cheaper for me to get it digitally and because I have unlimited internet, it’s actually a no-brainer.
Game streaming platforms
Google announced its Stadia streaming console earlier this year and best believe they are not the only company working on such technology. They are a host of other companies working on this technology and this goes a long way in entirely cutting out the need for resellers. Game streaming platforms are worse than disc-less consoles because in the case of streaming platforms the flea market guys won’t even be able to sell you any hardware thus totally excluding resellers and establishing a relationship between developers and the consumers directly.
What can they do?
In the short term (next 5 years), physical copies could still be a sustainable business models but I believe the wisest path would be to begin selling Xbox Live and PS Store gift cards as soon as possible. That way resellers will normalize the idea of digital copies to their consumers whilst keeping some of their power. If they don’t do this, consumers will discover these channels on their own and very quickly discover that they don’t need resellers (as I did).
At some point even this route might not be viable as consumers will no longer want to fork out US$65 for US$60 gift card or maybe it might not be profitable for resellers to sell the gift cards at lower profits than they are used to. Resellers at Avondale seem to have always sold high because their volumes seem to be low. Unless that changes suddenly, this might make the idea of gift cards viable for a select few, which is why it might be wise to be the earlier ones strategizing around this.
Maybe Hardware?
We know for a fact that the next Xbox and PlayStation consoles will come in some physical form like we have been used to in years past. This means that there’s still an opportunity to move hardware (in the short term) but hardware sells slower than the games since it’s significantly more expensive than the games. After the PS5 and Xbox Two (if they will be called that) it’s hard to know if Sony and Microsoft will still be selling hardware. Both are interested in streaming platforms and have already made in-roads with their PS Now and Xbox Game Pass services.
A rock and a hard place…
The reason why resellers are in such a weird place is because their existence was justified by the fact that consoles and the games were for a long time physical objects. With gaming going the way of the music industry and digital becoming a preferred option in the most dominant markets, it’s hard to see where the middle-men (resellers) fit in this new age where console makers and game developers sell directly to the consumers.
An all-digital gaming market is creeping towards reseller territory like a certain Night King did and unfortunately this doesn’t seem like a winter that can be stopped…
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12 comments
Have had the same conversation with some of my fellow gamers many times. What you missed in your article is that just across the border in SA, games are also sold in stores like Musica and BT Games/Incredible Connections etc for roughly USD$60. What this shows is that our brothers at Avondale are using a terrible business model that isn’t sustainable in the first place. SA shops have deals with distributors and buy the games at heavily discounted price and can therefor sell them at Recommended Retail Price (USD60). Cost of Digital games where things are “normal” i.e. not Zimbabwe, physical copies aren’t that much more expensive compared to digital. in fact people often complain that the price of digital is much the same as physical, offering no real savings. Hence my next point that digital/physical is just a matter of preference, except in Zim, where it’s a matter of the pocket and the ridiculous pricing model the guys at avondale use.
What about the issue of Regions. Is Zimbawe linked to PlayStaion, X-Box and Nintendo
It’s not linked to PS Store but we’re connected to the SA store… I’m not sure how it works on other consoles to be fair
They use a terrible business model because unfortunately there doesn’t seem to be enough demand to justify any other model… People tend to forget very quickly that SA’s population dwarfs ours by close to 4 times therefore a lot more businesses are viable there that aren’t here…
Speaking to your point of preference, if 80% of games in the UK are sold digitally that’s a huge incentive for game publishers to cut costs of making DVDs and game covers and just go digital… This inventive spreads to console makers who can also remove disc drives and put the money and space elsewhere…
They haven’t been able to do it because the technology wasn’t ready yet but we are getting there and I’ll be surprised if in 10 years the physical copies are still part of the rollout.
Interesting view. But for African market i feel the discs will be here for a while. Firstly because one cannot appreciate full online gaming unless using unlimited wifi and the cost for that locally and regionally at large is still on the higher end and not accessible to plenty. Also one aspect you didn’t consider is sharing of games. Many true gamers (myself included) would rather invest in a hard copy of the game so that they have bargaining power when swapping with a collegue for another game to play. The reasoning being if i invest in a very good title e.g The witcher 3 or God of War that one game can help me play 7 to 8 other titles just by swapping with other gamers meaning it saves me money. Every true gamer knows this. Also for memorabilias, archiving of collectible great gaming tittles has also become big business such that a great tittle today will be worth a lot more money a decade or so from now.
Digital games are only available online meaning if i sell my console i incur another cost interms of wifi to download the same game again on my new console! Now why would i want to do that especially in this country where data is so expensive. This is a quandary which console makers PS, Xbox have been stuck in for a while frankly since PS 2 and xbox live days but the reason the hardcopies are still and will still be available is probably because of the reasons mentioned above.
All valid points but I also believe that’s a short term view of things. If console makers are already flirting with no hardware and disc-less consoles and a minority in Africa still wants discs it’s hard to see them justifying the costs of discs when the bulk of they’re customers are now buying digital.
Does this also mean that the 80% of digital games bought in the UK where bought by something other than “true gamers”?
I agree with most of the reasons you mentioned but unfortunately the way consumers are buying their games in the markets that influence decisions of console makers means they will be going digital first sooner rather than later.
Avondale guys prices drove me to buy online and what’s more if you have xbox gold you get so many offers. I bought my Fifa 19 for US30 and yes the games are global if you buy from the UK and SA Microsoft stores and there other shops like CDKeys where I have bought my Xbox Gold Subs at a discounted price And I use my Steward Visa card
The convenience is unmatched, in March the PS Store had a deal for FIFA 19 and NHL 19 for $30 dollars but someone would rather buy physical because of nolstagia😂
Fifa 19 was released Sep 2018 Fifa 20 will soon be out in 3 Months thats why the price is so cheap. You clearly do not follow gaming trends. Even the hard copies are very cheap to buy now.
How much is FIFA 19 @ Avondale right now Mr Dave who clearly follows gaming trends?
I own a 1tb PS4, and in the two years I’ve owned it… I’ve only bought one disc based game from Avondale, Mass Effect Andromeda at launch.
EVERY other game I’ve bought since then has been digital.
Even on PS3 I’m now just buying digital.
Can’t bring myself to tell the guys I’m buying digital now though, they still get me some decent hardware here and there.
But with how much cheaper games are on PSN, especially if you have a PSN Plus account it’s a no brained if you have the bandwidth.
Even my friend in Bulawayo has me buy him PSN tokens because it’s easier for him to buy games online than to buy the discs.
A lot of people take that saving + convenience for granted. My dealer recently asked me where I was getting games now and I told him… Kinda felt like a betrayal but it is what it is😥