Chaturday: You Can’t Download A Console (Yet)

The Pach is Bach! I have a particular affinity for Michael Pachter, partially because he gives me hope in my qualifications of becoming a respected analyst for the gaming industry ala Michael Pachter but without the few products I’ve assisted with being market failures, ala Leigh Alexander. Pachter isn’t right with his predictions all of the time, but then again who is?

This week Michael Pachter made the prediction that the next generation of consoles will still have disk drives, for reasons that are completely grounded in sensible logic: Retailers. Pachter makes the argument that there is no way consoles are going to go all-digital because retailers would revolt and many would likely refuse to stock them. He also notes the strong presence of the used game market.

“So, if you have to buy a console at retail, you can’t say to a retailer ‘Hey, please promote and sell my console but we’re not going to have any games available, so once you sell the console to your customer we’re going to take over the customer and own the relationship, we’re gonna make them download everything and screw you, we’re never going to let you sell a game again’.”

He’s right, and we know this because it has happened before. Ignoring the fact that the PSP Go sold like a wet fart, a number of retailers (read: small stores where employees would have more information and discussion with customers) were openly advocating against sales of the PSP Go, because the system was digital only and the store had no opportunity to recoup profits via software sales. The PSP was small potatoes, the idea of the Xbox Two selling without a disk drive? There is almost no incentive for Wal Mart to stock it, given how low profit margins on consoles are.

We can sort of look toward the PC market as an existing example of this, as that industry essentially went digital only over a decade ago with very few remnants of physical media still existing, and the majority of those being fancy plastic boxes with Steam keys inserted. My local Gamestop’s PC section is smaller than its display of Hatchimals, consisting of a keyboard (on clearance), two mice (on clearance), a bunch of cash cards, and ten boxed games (on clearance).

But I don’t think that Gamestop particularly cares about PC because they never had a stake in the hardware part of sales. Sure you had stores selling Steam machines for a hot minute, but that venture floundered and assuredly the physical retail market now considers the PC as that thing that doesn’t make up a notable portion of its income but is relegated to little cards that don’t take up much shelf space, so the two factors balance each other out.

But Connor, you might say, the PC market is doing just fine and there is neither physical media nor a used game market. True, but you also have to factor that the PC used market was stomped out well before the market boom of video games, swapping games mostly died with the 3.5 inch floppy and Microsoft DOS.

Unlike the PC market, retailers have a stake both in the hardware and the software aspects, with the second half helping the first in terms of revenue. Ignoring the backlash from consumers, the retailer revolt would pretty much torpedo sales and harm long term business relationships between retailers and the manufacturers.

Otherwise I have no opinion on the matter.

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