SilentNegotiator (User)

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Consoles Will Never be like Steam

SilentNegotiator | 255d ago
User blog

Still drinking Kool-aid that Microsoft is not even selling any longer, many people are under the impression that the Xbox One as it was originally conceived was an excellent idea. A handful of people think that with DRM, Xbox One would have managed to lower prices and have better sales. The prices would even be on par with Steam. But the fact of the matter is that Xbox One was never going to be like Steam and consoles themselves will never mimic Steam.

What is a console? It is a closed platform. That means that Microsoft (in the case of Xbox One, which supposedly would have been the bringer of Steam-like service for consoles) manages everything and makes money off of everything that passes through it. It also means that there is absolutely no "internal" competition; once someone buys an Xbox, they have one source to buy digital games and one only; XBL. You don't like the price of the game on XBL or how they serve it? Too bad.

What is Steam? It is a game service on an open platform. That means that Valve does not control where you buy games when you buy a computer (other than titles brought to you by Valve and games that just happen to be exclusive to their service, but that's digressing). In order to keep customers, they must compete with other services, as there is plenty of "internal" competition within the platform of the PC.

On one platform, there is infinite amount of incentive to keep prices low. On the other, there is little incentive (other than the potential to get you to ultimately spend more with good deals, but the gaming industry doesn't seem to get this concept anyway). You don't like the prices on the console? Your alternative is having a massive paperweight; console manufacturers know that you have no other option once you've spent the money for the system. You don't like the prices on a specific PC game service? You find another; game distributors know that you have loads of alternatives.

It is business 101; if you control the supply, you can control the demand. Consider diamonds; they are far from rare, but one company controls about 80% of diamonds worldwide and has perpetuated the belief that they are valuable (and the other 20% takes advantage of being in a position of selling something that the western world has been convinced that you can't prove your love without). It is very similar (to a smaller scale, obviously) on consoles; they have no reason to charge you less if they control their economy/supply of digital games.

I hate to burst anyone's bubble, but consoles will never be Steam. There are fundamental differences in the infrastructures of a PC game distributor and a console and they do not favor consoles in prices.

zeal0us  +   255d ago
While digital is on the rise, console still rely on physical format for most of its sales. The physical format is probably the sole reason why price drop couldn't happen. Also probably the sole reason why console will never be like Steam.

A $60 physical games when broken down
-Retailer Margin $15
-Return $7
-Distribution Cost $4
-Platform fee $7
-Publisher $27

Out of $60 a game publishers only get ~$27. Drop the price of the game to $40 dollars and now the publisher would get ~$18. The amount other four also decrease.

The reason why Steam is a popular platform for publishers is because they don't lose cash from the middlemen(Retailers, Distribution and Return).
#1 (Edited 255d ago ) | Agree(2) | Disagree(6) | Report | Reply
SilentNegotiator  +   255d ago
"A $60 physical games when broken down
-Retailer Margin $15
-Return $7
-Distribution Cost $4
-Platform fee $7
-Publisher $27 "

Those are Onlive's bloated numbers. For one, $15 to the retailer is WAAAAAAY on the high end. $4 PER GAME to distribute is pretty doubtful, except maybe on much later, smaller, post-release shipments.

Remember that Onlive has an agenda in all of this; they're trying desperately to get publisher support. Onlive's history is far from a lucrative one.
#1.1 (Edited 255d ago ) | Agree(2) | Disagree(2) | Report | Reply
zeal0us  +   255d ago
While the numbers are pretty doubtful its pretty obvious that publishers don't get $60 and are still losing money due to middleman fees. Also part of reason why some publishers and developers said in the past that digital was better format than physical.
BillytheBarbarian  +   255d ago
Digital could have helped save struggling games and saved tons of jobs making games. Also, companies would be more willing to try new original games because the return would have the benefit no middleman distribution. There would be a surge in AAA creativity like there currently is with indie games because of the smaller losses.

I might still have had a job as a 3D animator had our games been sold digitally versus brick and mortar stores.

Also artists and programmers could get paid what the talent is worth.

I'm not against ownership of physical games but I can see the positive of all digital. All digital means people keep their jobs, talent gets paid, and creativity comes back to gaming in AAA form.

Instead we get call of duty every year because it's safe.
The_KELRaTH  +   254d ago
While some will argue that games would be cheaper of the publishers removed the retail, distribution and packaging chain you actually have 1st hand experience even now that not only do prices stay high but actually go up: As an example just look at all those CoD map packs that quickly cost more than you likely paid for the full game.

Look how just because there's new console formats on the way the games got another price hike.
Yet these new console games require less individual development time as you're effectively buying a PC game.

"Most publishers don't get $60 etc.."
How many retail business models do you know where only 1 part of the business chain makes all the money?

The middleman distribution IS the publisher.

Since when couldn't devs sell their games digitally on the PC - and now on mobiles.

It's always been about the huge chunk taken from the publisher AND that the devs were the last to get paid.

The future is self publishing on an open market
SilentNegotiator  +   255d ago
They'll still charge the same amount if console games go all digital. They've conditioned us to $60 on consoles and again, there's no internal competition.

Publishers will jump with joy that they can take a wider profit margin and never fess up to the fact that their budgets were horribly bloated (until they inevitably run back into the issue after giving their CEOs massive raises).
#1.2 (Edited 255d ago ) | Agree(4) | Disagree(0) | Report | Reply
zeal0us  +   255d ago
Heck some newly release digital pc games are priced $60 so even if console went all digital I honestly wouldn't expect publishers to drop the price.

I do have to agree there really isn't any internal competition. It would be cool if Microsoft said "Buy your copy on our console its only $55". While Sony shouted about their prices being $50 and Nintendo $45. I doubt we would ever see that day.
dedicatedtogamers  +   255d ago
Nice write-up. I like Steam, but I also use several other game services (mostly GoG) when I can.

It's true: even if a console matches Steam feature for feature, the competitive nature of the PC's open platform can never be replicated on consoles. That's why I don't understand DRM on consoles. The console hardware itself IS the DRM. Why add an extra layer (other than to just milk money)?
iceman06  +   255d ago
Very Nice!!! I have said this many times, though not as eloquently as you, and faced hundreds of disagrees. I fully understand that digital is the "future". However, there must be a plan that is beneficial to console gamers and not just a cash-in for the console makers. I read somewhere that if MS or Sony discounted their games by $5 it would cut into their bottom line as much as %10. We might scoff at that percentage, until we realize that be are talking about out of a possible BILLION dollars! Companies are NOT charities. No one expects them to be. It's about the continuous give-and-take that the consumer/business relationship should be about.
DragonKnight  +   255d ago
I'd just like to add that retail partners are also a reason consoles will never be like Steam. Stores like Gamestop make their money off of used games. Unless they are willing to undergo an infrastructure change and create some method of buying/selling used digital games, then they have to rely on physical media to make money. Not only will they threaten to pull support if publishers like MS charge less for digital games than they (Gamestop) have priced for physical games; they'll also fight tooth and nail against an all digital solution because it will put them out of business.

This would mean they would not stock the consoles that are threatening their business which would hurt everyone. There's no way around needing a console to sell your digital games on unless companies like MS want to switch to PC, which they won't because they want to dominate the living room.

So as we can see, there will never be a Steam-like service on consoles, and anyone that believes there will be is naive and blind.
Bladesfist  +   255d ago
In time it will all be digital.
tokugawa  +   255d ago
I have to agree bladefist. why?

because discs cost money.. simple. plus in a stroke it would cripple the second hand market. thus further increasing their margins. and ofcourse cutting the retailer and their small slice.

it will come, i dont know when, but it is inevitable.

dragonknight. if the platform holders and publishers decided to do that, then they would not care about gamestop. plus, there will always be someone will to step into the vacuum, and sell the consoles.

naive and blind are the people that spend their life blogging with others of their ilk, and seem to think that their twisted reality is somehow the real world.. perhaps a few extra bubbles, agrees and well saids could be the reason??
DragonKnight  +   254d ago
"because discs cost money.. simple. plus in a stroke it would cripple the second hand market. thus further increasing their margins. and ofcourse cutting the retailer and their small slice."

Discs cost money for the music industry, and yet they are still made. Discs cost money for the movie industry, and yet they are still made. Discs cost money for the software industry, and yet they are still made. Your reasoning is pointless.

"it will come, i dont know when, but it is inevitable."

Few things in life are inevitable beyond control, a completely digital future isn't one of those things. Something like that is only inevitable if it is allowed to be.

"if the platform holders and publishers decided to do that, then they would not care about gamestop. plus, there will always be someone will to step into the vacuum, and sell the consoles."

This is where you show your naivety. Yes, publishers are simply going to cut off one of their largest retail partners who operate in some of their largest markets in favour of some random, new company that definitely will not have the exposure of gamestop. Quite a logical conclusion to come to. It makes perfect sense not to care that the largest retailer of video game products isn't selling your console anymore. Perfect business sense. I bow to your genius and assume you have the most successful video game product business in the entire world to make such a claim.

"naive and blind are the people that spend their life blogging with others of their ilk, and seem to think that their twisted reality is somehow the real world..

The irony of your statement while taking the time to comment on a blog.

"perhaps a few extra bubbles, agrees and well saids could be the reason??"

Well now, the only reason to include this would be jealousy. You aren't... jealous are you?"
tokugawa  +   253d ago
my reasoning is pointless regarding discs?? what because they are still used in the other indsutries you just mentioned. yet you forget to mention that download is massive in two of those industries. movies not so much. you talk shit! and think that a veneer of superiority in your posts means that everyone should listen.

"Few things in life are inevitable beyond control, a completely digital future isn't one of those things. Something like that is only inevitable if it is allowed to be"

lol what are you and your fellow n4g bloggers going to stop them? in the UK in 2012, 30+ mil albums were downloaded, compared to 60+m cds sold. i cant even be bothered to look at 2010 and 2011, but i am sure that we both know that it increases yearly.

"This is where you show your naivety. Yes, publishers are simply going to cut off one of their largest retail partners who operate in some of their largest markets in favour of some random, new company that definitely will not have the exposure of gamestop. Quite a logical conclusion to come to. It makes perfect sense not to care that the largest retailer of video game products isn't selling your console anymore. Perfect business sense. I bow to your genius and assume you have the most successful video game product business in the entire world to make such a claim".

no, that is where you show yours my friend. not only naivety, but the fact that you really are clueless. like i said, too many "well saids" have affected your sense of reality. ever heard of walmart, tescos, carrefour or any already established major super/hypermarket chain that exist both sides of the atlantic??

the same chains that would willingly pick up the baton of selling console hardware if gamestop went kaput.. oh they already sell consoles too.. and it would only need a quick mention in their already mammoth ad campaigns if they were the only ones as well !!

what did i say about talking shit??

"The irony of your statement while taking the time to comment on a blog."

got me bang to rights their bucko. guilty as charged.

"Well now, the only reason to include this would be jealousy. You aren't... jealous are you?"

lol. that must be it. jealous, racist, the sort of the things people chuck around when they dont have anything to come back with!

i really do give a shit that you more opportunities to spew your endless nonsense in threads than i do lol. "i'm like, totally jealous of you dude"

thing is dragon, i try not single people out on here. but watching you day out in day out in comments section thinking you are better than everyone else is annoying to say the least. you and a certain other sony loving blogger on here, seem to think that your high bubble counts mean that we should all take note and listen.

when the reality is that you both are so full of shit, it is not even funny. on a site that wasn't swamped with sony lovers, you would be put in your place.

but on n4g... you are like gods lol

anyhting else?
#4.1.3 (Edited 253d ago ) | Agree(1) | Disagree(2) | Report
DragonKnight  +   253d ago
@tokugawa: I was reading over your response and thinking about responding until I came across this.

"i really do give a shit that you more opportunities to spew your endless nonsense in threads than i do lol. "i'm like, totally jealous of you dude"

thing is dragon, i try not single people out on here. but watching you day out in day out in comments section thinking you are better than everyone else is annoying to say the least. you and a certain other sony loving blogger on here, seem to think that your high bubble counts mean that we should all take note and listen.

when the reality is that you both are so full of shit, it is not even funny. on a site that wasn't swamped with sony lovers, you would be put in your place."

That right there tells everyone what they need to know about you. You go off on a tangent about something because you're jealous? Nice. I've talked to some characters on this site, but none have openly admitted to butthurt. Kudos. Now then, everyone knows that the only opinions you'll care about are those of anyone beneath you in the bubble area because bubbles matter so much to you. You sound like DK286K actually.

Yeah, there's really no reason to take anything you have to say with any serious consideration. Enjoy your envy.
tokugawa  +   251d ago
i really DO give a shit that you more opportunities to spew your endless nonsense in threads than i do lol. "i'm like, totally jealous of you dude"

I really do, should have been really DONT.

i even re-read my post before hitting the add reply button... and that slipped through.

anyway, i'll let you pretend that i only care about peoples opinions if they have less bubbles than me lol. desperate.

the thing is, even you know that that was a typo. but i suppose that i should let you cling to it.

next time you feel like debating some points, just let me know
XboxFun  +   254d ago
I disagree with this article. I understand your points about consoles being a closed off platform and content going through MS. But we have already seen a shift in their policies of self publishing which if I'm not mistaken will include self pricing and marketing.

If anything this could have extended also to the digital downloads. And in time with all these games and their game companies competing on a platform we might have seen a lot more sales or "humble bundles" occurring more frequently for consoles.

I think MS goal was to get a Steam like environment. This of course couldn't be done over night but in time it might have been on par or better than Steam.

The fact is we will now never know, so to say that MS's DRM would have never worked is reaching and jumping to conclusions with little to no evidence.
#5 (Edited 254d ago ) | Agree(0) | Disagree(5) | Report | Reply
mmj  +   254d ago
I'd be more worried about the number of manufacturing jobs being lost by going digital than a few AAA fat cat developers/publishers pretending to be impoverished.

People need to stop acting like they're too big to fail and need bailing out by giving away our consumer rights, all manufacturing/retail costs were taken into account when the price of games was set.

If they want bigger profits then start making innovative top class games like The Last Of Us instead of shovelling out the same shit with minor changes year after year.
#6 (Edited 254d ago ) | Agree(2) | Disagree(0) | Report | Reply
Skizelli  +   254d ago
Steam is overrated anyway, and I say this as a person who's used it since 2004. Steam may have some great deals, but it's all just an illusion. You don't actually own any of those games. Not only physically, but digitally as well. You're merely purchasing a lease to play them. I know I'm going to offend many by saying this (sorry if the truth hurts), but anyone who wants an all-digital future is an idiot. You're only handing the power over to the corporations. When I pay for something, I want to own it (either physically or digitally). If I didn't care about owning it, I'd just rent it. Unfortunately, digital is killing that too.
#7 (Edited 254d ago ) | Agree(3) | Disagree(0) | Report | Reply
Bladesfist  +   254d ago
Do you live in Europe? If so you are protected under EU law and can even resell digital licenses. Someone is suing valve over this currently.
Skizelli  +   253d ago
I live in the US. I hope that person succeeds. Maybe it will change things over here as well. (But I doubt it.)
MAULxx  +   254d ago
I'm with Skizelli on this. The all digital future sucks.
SilentNegotiator  +   254d ago
Also as a Steam user, I agree. I hate the way that digital ownership has been destroyed and everyone has a lawsuit waiver clause.

I only buy games on Steam on a really good sale. I treat every purchase as temporary, least I'm ever hacked, get mistaken as a hacker in a server and get banned, or otherwise say something in the forums that get me banned (considering some of their rules to protect their own interests).

An all-digital console future would just mean total control by publishers with few to no price drops.

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