Sony Says Game Industry Needs Retail to Survive

Despite the drive to digital, Sony says a strong retail market will be vital to the next generation of consoles.

David Darling, the co-founder of Codemasters who now heads mobile game developer Kwalee, made a bold statement yesterday, claiming that the PlayStation 4 and Xbox 720 – his terms, not mine – will fail if they are not exclusively digital. Not that they should support digital distribution, mind you, or need to embrace it, but must be “digital only, or they will fail.”

“If the next generation consoles have media drives like DVD to keep distributors and retailers happy so they can sell physical product this will make the machines uncompetitive,” he said. “The retailers will say to Sony and Microsoft, ‘You can’t sell game X at retail for $60 and then sell it in your App Store for $2.’ However, console-makers will need to sell games for $2 or else they will not be competitive with Apple.”

Sony sees things different, however. Its recent acquisition of Gaikai indicates that the company recognizes the importance of digital to its future, but Fergal Gara, the head of Sony Computer Entertainment in the U.K. and Ireland, said that despite the bumpy ride of the past year, the next generation of consoles needs retail in order to survive.

“Coming down off that 2008 peak has been a steep ride for many and has involved fallout on many levels, not least of all retail. So what we’re seeing is not really a surprise, a bit of a readjustment if you like and it isn’t just happening to the specialists on the High Street. There is a bit of a reappraisal around space and the commitment from other retailers,” he told MCV. “We’d love to see as many of those retailers as possible maintain their interest in servicing the space because clearly down the road many of us are going to be doing our best to give another injection into the market whenever the next cycle starts.”

The industry’s current retail pricing model may be broken, but there’s no rational reason to suggest that retail and digital can’t co-exist, at least through the first half of the next generation, especially based on the idea that the same game that sells for $60 at retail will sell for $2 on XBox Live. How important retail will remain to the console market over an entire ten-year cycle is impossible to predict, but calling for doom and gloom if it supports physical media is just flat-out trolling for attention.

Source: MCV