Entertainment 2.0 #231 : The Rock Solid Gospel Truth

Jun 14, 2013 by

It’s finally the week of the E3, and that means that the Microsoft, Sony, and all of the other giants of the video game industry are parading their new products. It also means that we finally get most of the rest of the details on the Xbox One and Sony PlayStation 4. While Josh loves gaming, and Richard loves gadgets, they just didn’t think they could do the topic justice on their own, so this week they are joined by Matt Paprocki from DoBlu and the Seen in HD podcast. There was also plenty of Windows and Windows Phone news to cover. Josh and Richard cover all that and more on episode 231 of the Entertainment 2.0 podcast. If you’re not listening live you’re missing a lot of fun, so make sure to join Josh and Richard for the live recording of episode 232 Tuesday, June 18th at 8:00pm ET!

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  • AlexB

    Great show guys. One thing that stuck in my craw was Matt’s statement that the Steam business model is flawed or will fail. (or something to that effect) I’d love to hear why. Is it just because they often offer AAA titles for cheap? Isn’t that the benefit of having an all-digital-content system that doesn’t allow for used game sales? (the publishers are fine with their games selling for less $$ because they aren’t losing out on used game sales)

  • AlexB

    Interesting article, but I’m not sure I agree with it. Of course GOG thinks Steam’s business model is bad – they’re competing with them! They make it sound as though the only games that get purchased on Steam are a few years old during big sales but that’s just not true. When the next big Call of Duty game comes out and sells 2 million PC copies in the first week (or whatever), those sales didn’t come from Gamestop – they came from people buying it for full price on Steam. Just as an aside, I love GOG and have bought a number of classics from them.

    I think the reason Microsoft prices the games in Xbox Live so high is because they have to play nicely with retailers. They just couldn’t get away with selling Bioshock Infinite for $20 while Target, Best Buy and Gamestop are still selling it for full price. Steam doesn’t have this problem because they’re not dependent on retailers – they’re just a service.

    Also – and I have absolutely zero data to back this up – but I’d bet my life savings that game publishers are making waaaay more money now on PC games than they ever were before Steam came along. Steam has contributed in no small way to the huge resurgence that PC gaming has seen in the past few years.

  • http://www.doblu.com/ Matt Paprocki

    Two million COD copies on Steam, six million on consoles. That’s the divergence. You’re also looking at a guaranteed seller. What about smaller titles like, say, Remember Me? It’s struggling for console recognition and had tepid reviews. Why wouldn’t consumers wait for sales?

    Microsoft keeping prices high isn’t because of retailers. Sony is giving away games with subscription as no additional cost, and offering them at decent discounts.

    PC gaming has gained a foothold, although for the attractiveness of advertised sales, which is really a shame. Not only because it creates an expectation and a mindset, but because console games do the same thing every day. The stigma that Steam is somehow perfect and always cheaper is wildly inaccurate. Tomb Raider Steam? $50. Tomb Raider console used? $20. BioShock Infinite? $60 Steam, $40 brand new on console. GameStop has a slew of games $5 and under now that they’ve taken a natural downward price drop, but they don’t actively advertise those. They also stay at that price instead of going back up.

    Here’s EA on the cheapening of IPs via Steam:

    http://www.gamesindustry.biz/articles/2012-06-06-david-demartini-origin-wants-to-be-the-hub

    And yes, EA is a competitor, but it doesn’t change what Steam is doing.

  • Peter Kuebler

    Can you link the new 8″ tablet you spoke of on this or the other show? With office pre-installed?
    Please?

  • AlexB

    Good point about Sony selling games cheaply for PS plus members. I’m not sure how retailers feel about it, but apparently it’s working fine so far.

    I made the 2 million number up, I have no idea how many are sold. I’m just trying to debunk this notion that the only time people buy games on Steam is 10 months later when they’re 50% off. That’s just not true at all, ‘AAA’ titles sell huge at full price just like they do anywhere else. The games they sell during big sale events are in addition to, not instead of.

    Speaking from personal experience, the games I buy during Steam sales are games I generally wouldn’t have bought in the first place. Do you get equally mad at the local bakery for selling day-old bread for half-off? Have movie-goers stopped going to new movies because of the cheap theaters that show 2nd run movies for $3? Has that changed the consumer’s “mindset” about seeing movies? Of course not. To be honest I’m really struggling to see what the problem is…

    I guess the bottom line is that this is all just capitalism right? If Steam’s business model is so bad, they’ll go out of business. If game publishers are getting screwed, they’ll stop letting Steam distribute their games. Neither are happening (yet) and I suspect it’s because these publishers are making more money than they were before Steam came along. Also, keep in mind that Steam is more than just a place to buy PC games. Steam provides a game installation and management “runtime” that didn’t exist before. They have added a number of console-like features to PC gaming – such as friend lists, trophies/achievements, and cloud saves. They’ve tied it all together in a relatively nice UI that can be controlled from a gamepad. And they’re branching out and bringing (or trying to) this experience to Linux and OSX as well.

    I hope this isn’t turning into a PC vs console thing.. I love my PS3 and game on it as much as my PC. Later,

  • http://www.doblu.com/ Matt Paprocki

    Look at this way: DVD sales were slipping. They plateaued and then began dropping. Why? Because of the prevalence of Wal-Mart discount bins. The entire medium as a whole took on a cheaper price in the consumer mindset, so they stopped buying at full price. As a result Blu-ray was rushed out the door unfinished, both as a counter to HD DVD and in attempt to establish a new format before the idea of full price DVDs fizzled completely.

    DVD is Steam.

    The capitalism argument is much like GameStop; if pubs don’t like used games, they should stop selling to GS, right? But they don’t, because it’s prime market space. Same with Steam.

    I don’t have numbers for new releases either. No one does. One of the downsides of digital is being unable to track markets. However, there is a reason many ports to PC end up rushed. There IS a market, but it is specific. Always has been. I’d be willing to bet something like Skyrim sold bonkers on PC. Battlefield? PC. Call of Duty? Console all the way.

    Bear in mind too last gen saw nearly 200 million consoles sold across three platforms (and we’re still going). Steam has around 50 million registered users. It’s a small market (relatively speaking), and their business model now relies on steep discounts. I do wonder how many people would actively use the service if Steam decided not to host summer/winter sales. Again, we’ll never know, but it’s something to consider. How many of those 50 or so million have bought games at full price? It’s a dangerous precedent, but Steam DOES carry value to AAA pubs. I just don’t think it’s as rich as many think it is.

    To indies though? It’s invaluable.

  • AlexB

    I think we’ll have to agree to disagree on the Steam stuff. Time will tell I suppose.

    I agree that PC gaming is pretty niche though, it always has been and probably always will be despite Steam’s efforts to bring it into the mainstream. I’m sure COD sells more now on consoles, but that was a franchise that was originally PC only and was later ported to consoles. It lost a lot of it’s support from PC gamers when they stopped allowing people to setup their own servers. Personally I prefer to play 1st person shooters on console because I hate using a keyboard/mouse. (which is usually a pretty blasphemous thing to say around other pc gamers!)