Sometimes I read this board and it just seems sad how people are clinging to the past regarding this stock. Observations people make and the craziness behind them.....
- "People like owning physical media" This hasn't seem to stop CD's, PC Software, Movies, newspapers, etc. from going digital. People's preferences change and I dont see why these wont as well.
- "Last console cycle...." I dont know if history will be much of a guide here. New technologies like smart phones, tablets, 10 terrabyte drives, streaming, estores, etc. are changing everything and I feel sorry for people drawing too many conclusions from the console changes seven years ago. Plus, the gamers that I have talked to are saying that the change from Ps3 to Ps4 is fairly modest. Slightly improved graphics, not dramtically new experience.
- "People like going to the store." So Amazon doesn't make a difference? What if there is nothing in the store when they get there which will be the case for months at GME this year. What further percent decline in traffic will it take until GME is losing money.
- "Publishers will supply what people want" Agree. But they will also charge more for things that cost more. Physical media will end up being expensive ("collectors editions"). Download will be cheaper.
- "Internet downloading takes too long and too many bits." Do you really want to bet against long term improvement in internet technology? Do you want to bet against publishers and consoles ability to download in the background.
23 Percent decline in physical media sales during the new console launch period when they should have been great. GME has been closing stores. Thats the facts. People are buying less physical media as the industry and technology progress.
And the beat goes on.....
Okay, you read a Fool article and bought in on the GME article just because they were right about Blockbuster. We'll see how you are in a month. Dvd's and Cd's did not go away nor will physical media. The sales are down but not out. What kind of problems can happen with streaming? And have you ever encountered them? Those advertised ISP speeds are based on ideal conditions and when peak occurs and those biz's get first nod or didn't you know that? GME is down but I seriously doubt they are out. Ask some of those other pioneer media streamers what road blocks they ran into.
So funny...jumpinjeh..you are exactly what I was posting about...."physical media is down but not out". Yeah sure but how many more years of down will it take until you agree that down, down, down..equals out. Do you think that whatever problems exist now with DL and streaming won't get solved??? Ask Tower records and Blockbuster how they felt two years before they were at zero....
still waiting on an analysis that demonstrates how digital is cheaper for the consumer end-to-end (with or without trade-in). Bears say this about digital like its gospel, so it's incumbent upon them to prove it. Got any numbers?
Economics of downloading....
Lets just set some boundaries and then we can discuss the rest.
- 10 megs/sec internet speed x 60 sec per min x 60 min per hour x 24 hours per day = 864 gigs per day.
- Typical internet access at this level is maybe $1 per day
So, 864 gigs for $1 means around 1 tenth of a cent per gig.
So, 40 gig game costs maybe 4 cents to download.
So, some people are going to whine about the fact that ISP's are going to limit downloads, and my example here is extreme.
But, then I am going to whine and say that fiber is coming and 100m/sec is the FCC's near term goal and that ISP's are not yet limiting downloads, etc.
Either way, you cant get to any significant cost for downloading big AAA games compared to buying them retail.
Of course, most games are far smaller and so the cost is well under the cost shown here.
You seem to have a problem with doing research.
EA has been reporting higher % of revenues from digital for years. iOS, Android, Steam, F2P, all explosive growth last 5 years, all digital. Games on XBLA like Minecraft doing record numbers. Digital downloads of full games arriving sooner than before and with more convenience than before means higher sales. Meanwhile retail sales have been ugly for years.
Who says digital has to be cheaper? You are gaining convenience, not having to do more than a button click, being able to play it quickly any time with finding and swapping discs.
Don't fall into that trap of thinking GME is all good until digital is 100% of the market. Their retail business will be a footnote in history long before that threshold is hit.
You are right-on. I've asked that question 4 years ago and no one has answered it yet. It is the most important point here. If Sony or Microsoft want to eliminate the trade-in\used sale, they have to discount their games to make up the difference, the resale value. So if you want to spent alot of money to set up technology just to sell the games cheaper yourself, streaming\digital, then you better crunch the numbers to make sure that your margin increases enough and covers your additional expenses as well.