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Consoles Cannot Be Like Steam (Including Pricing)

Published on July 31, 2013 by in editorial

steamLet’s face it, this has been one dead summer.  On the plus side I’ve been barreling through my pile of shame at a maximum pace, had the time to pay attention to far too many indie titles, and of course I’ve been enjoying the Steam “Summer Getaway” sale.  This was my first year enjoying a Steam sale as a PC gamer that could readily play anything I purchased, which my previous article also mentioned is my first summer with a gaming PC.  It was quite liberating, I must say.  I’m no idiot, I was completely aware that PC gaming was a thing, that it was possible to enjoy almost every title I love without relying on consoles, and that Steam sales were amazing.  It doesn’t quite sink in until you actually do it, though.  I used to lose my mind over picking up a console title for $10 or less, even if it was a poorly received title like Two Worlds II.  At $20 anything I had ever wanted to play could pretty much be sold to me without question.  Needless to say that the near $100 I spent on the Steam sale to literally purchase any game I had ever wanted (including my ENTIRE wishlist), netting more than 50 games, most of them full titles, was staggering.  This isn’t a case of PC elitism, it’s basic logic.  I typically spend around $100-$200 per month on video games, which I acknowledge is high for even most core gamers, but I can afford it so I choose to do so.  That doesn’t mean I’m going to purchase Deadpool for $50 when I can get it for $20 or Saint’s Row the Third: The Full Package for $35 used or $40 new when I can get it for $7.50.  Now I know some don’t want to game on PC, don’t have a setup like mine where I chill on the same couch and use the same TV and surround sound and even the same Xbox 360 controller as my consoles, but since I do have this it’s literally another console choice.  Back when the Xbox One was announced and the digital license was being considered, not to mention the thought most of us have that all digital is going to eventually happen, one of the biggest promises is reduced prices and a Steam-like shop.  I have even heard from major sites this concept of needing to drop digital prices and make Steam store reductions.  I’m here to tell you right now guys, it is never going to happen as long as consoles exist and here’s why.

Retail Pressure

retail_gamesSteam is an open platform, a service and DRM hybrid that allows its users to purchase and access games in an all digital format that for the most part requires you to be online.  It is not a console by any means.  Nor is the PC or Mac, for that matter.  On the PC front manufacturers from all over match specs or piecemeal a setup and sell it to consumers for profit while the store selling it also gets a cut.  This is the way most retailers operate.  Certain products, like razors and game consoles, are a different concept.  They are sold for no profit at the retail store and the manufacturer usually doesn’t even break even, but rather takes a loss, on the hardware.  The concept is that through selling these devices as cheap as possible, retailers and manufacturers benefit from the profit margin of the add-ons like games and razor blades.  If you remove the retail disc from the list of available products you remove the profit for the retailer.  If this happens then the retailer won’t carry the console, which kills the market for the average consumer and everyone goes bankrupt that is involved in consoles.  PC gamers don’t make up a large enough market for that to matter from a gaming standpoint, which is why publishers and developers moved to digital and why Steam (amongst others) exists.  Core console fans will be quick to point out that they would gladly buy Xbox One and PS4 from manufacturers directly, but again the bigger market goal is to get those that won’t and that’s not the core gamer.  As a result the pricing structure has to remain constant, high retail manufacturing also remains constant, and the price structure stays stagnant, as it mostly has for the last 10 years. 

So you wanna know why The Last of Us is $60 at Best Buy, Target, Wal-Mart, GameStop, and digitally on the PSN?  Because the second they drop that price lower in digital form these retailers push back and threaten to not carry the games, or in Sony’s case, the console.  It will happen, too.  Frankly no one other than GameStop really cares if they remove video games.  It’s a good business but it is not the core of the business.  This is also true when games go on digital sales, the retail market retaliates.  Since almost all PC gaming is digital, retail barely carries PC games, and PCs aren’t tethered to the console market concept, it gets to avoid this altogether.  What this means is that as long as consoles, which are a retail format that hopefully attempts to appeal to the largest audience, you will remain in retail stores and thus your digital distribution cannot thrive on its own and cannot be cheaper than the physical media.  When this happens your customers refuse to pay the same price for digital as they do for physical, because c’mon, you’d be a PC gamer if you really didn’t care.  The resulting cycle is that even your core audience only wants physical media if all things are equal. 

PS4 vs Xbox One composite

As it all winds down this means that consoles can never, and will never, be like Steam or PC gaming.  Prices will do what they’ve always done.  As a result I know see as a PC gamer that my console and its games are what it always has been: a luxury.  This doesn’t mean I’m doing away with consoles, hell no, my PS4 will blow the shit out of the capabilities of my current PC, so I need it for the “really good games”.  But other titles that I’m only casually interested in can be put on the back burner and eventually picked up at rock bottom prices.  It’s an economic turn for me, and one that is probably necessary as my child grows older and begins to syphon my money like a hungry parasite.  I guess the point is that console gamers need to stop pretending the world of Steam could ever come home, because it simply won’t.

The opinions expressed here are those of the author, Fred Rojas, and do not necessarily reflect the views of the B-Team Podcast or its other co-hosts.  In fact most of the time the guys think I’m bat-shit crazy.

 
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