Technology advances spell ‘DOOM’ for high street video game retail

Colossal yet minuscule 128TB SD cards, advances in digital game delivery services, and a digital-only future for video game sales. Is technology finally spelling the end of specialist high street video game retail?  This week Piper Jaffray published a report indicating revenue from video games could come almost entirely from digital distribution as early as 2022.  Whilst many see the move to digital as inevitable, the report – which states the market is shrinking by around 10 points per year – will be cause for concern for the high street and its investors.

We have written much about streaming and subscription services for music, film and games, and the effect they have had on their industries and markets.  Sony’s PlayStation Now does a pretty effective job of letting you stream a reasonable library of games – as long as your broadband is up to scratch and you can cope with occasional latency issue. Microsoft to date have taken the opposite route of allowing gamers to download a library of games to their hard drive, via Game Pass.  This option ensures uninterrupted play, once you’ve waited for the download to complete and assumes you have enough room left on your hard drive.  Microsoft recently made those wait times significantly less painful following Xbox Game Pass executive Ashley Speicher’s E3 announcement of FastStart, which will halve download times.

Now the storage issue may also soon be a thing of the past as well.  The SD Association recently announced a new card specification that should increase maximum storage on SD cards to 128 terabytes.  That’s 126 terabytes more than the current limit.  The new cards will also provide increased data transfer speeds of 985mbps.  Furthermore, Microsoft’s gaming chief Phil Spencer also revealed at E3 that the company is hard at work building a streaming game service for any device.  In an interview with The Guardian, Spencer said “Our focus is on bringing console quality games that you see on TV or PC to any device.” The Ubisoft Chief Exec, Yves Guillemot, also recently predicted the next generation of consoles will be the last.

All these advances in technology are ultimately making the purchase of a physical copy of a game less desirable and less necessary for gamers. Add this to the fact that publishers make considerably higher margins from digital delivery.  With both gamers and publishers apparently set to gain from an entirely digital distribution future, the end of specialist high street video game retailing seems inevitable, if not quite yet imminent.

James Dodd

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Martin Tripp Associates is a London-based executive search consultancy. We work across the media, information, communications and entertainment industries. This means we can bring best practice from across the sectors to your business.  We have also worked with some of the world’s biggest brands on challenging senior positions. Feel free to contact us to discuss any of the issues raised in this blog.