Physical game shops in a digital world

This post was inspired by an article I read a little while ago which detailed some of the financial issues facing GameStop. Here in the UK we don’t have the chain GameStop, at least not in a big way. But many of the same issues apply to shops here in the UK – as indeed they apply to those around the world.

When I was younger – and much more into video gaming – there were a number of different gaming shops on the high street. Even in the relatively small towns near where I grew up, there could be two or even three such outlets. The ones I remember most prominently are of course Game – the biggest, and the only one still around as far as I know – Electronics Boutique, Virgin Games, and Gamestation. Shops like Woolworths, HMV, Dixons, and Virgin Megastores also had prominent video games sections – so it could be worth shopping around for the best deals!

There were three pretty great things about this from my point of view as a kid/teenager looking to get SNES, Nintendo 64, Dreamcast, and finally Xbox games. Those were the consoles I had in my youth, by the way. The first awesome thing was that I could choose what to spend my hard-earned(!) pocket money on for myself. If I wanted a newer, more expensive title I’d have to save up for it, perhaps even forgoing trips to the cinema or other social activities, or simply wait longer. Or I could try my luck on a cheaper title – and then end up bringing it back a week or two later to trade it in, which was the second benefit of the abundance of specialist gaming shops. Finally, I could try to get games that weren’t suitable for someone my age!

The concern I have as shops like Game here in the UK, and Gamestop in the US and elsewhere, continue their decline is that for children and young people in particular – as well as people on a lower or fixed income, as I am myself – the relationship they have with gaming as a hobby is going to become more difficult.

Video gaming as a medium is increasingly digital. More and more transactions are taking place in online storefronts, with titles being downloaded with no need for a disc or cartridge. Increasingly, games require large patches or updates after release, so even buying a disc can still mean an internet connection is required. And often – especially in the PC gaming space – buying a “physical copy” just means you receive a box with a download code in it. Why bother at that point, right?

For young people, the transformative years between the ages of, say, nine or ten and thirteen or fourteen are where a lot of important skills are learned and honed. Money management is one of them. For someone too young to have their own bank account or debit card, how are they supposed to learn the value of saving up, of pocket money, etc. when the only way to buy a game – if that’s their hobby – is to get mum and dad to do it with their credit card? Not understanding the value of money leads to some kids ending up spending insane amounts of money on in-game microtransactions – they simply lack any concept of money as to them it’s simply numbers on a screen. And yes of course there are still plenty of things in the real world for young people to spend money on, but for someone in the position I was in at that time of my life, where gaming is their primary hobby, there are fewer such opportunities and I think it will have an impact.

The lack of trade-in opportunities will also change the way people on a lower income – including young people but also folks with disabilities like myself – engage with gaming. A game ceases to be an asset – something with resale value – if you only own it digitally and can’t transfer that ownership to someone else. It means people will need to be much more careful when making purchases – because a game is now a permanent fixture in a Steam library or on a console hard-drive.

All this is to say that I’m confident that businesses like GameStop and Game will not survive the decade. And unfortunately, many people will be the worse for their demise, even if they don’t realise it yet.

Physical shops of all kinds find it very difficult to compete in a world where the likes of Amazon exist, able to deliver anything to your door within 24 hours. The high street in the UK has been in trouble for some time, and many smaller towns – again, like those in the area where I live – have high streets which are full of charity shops, betting shops, takeaways, and not much else any more. As more and more commerce goes online, high street shops find it hard to compete. If that’s the case for physical items, a product like a video game which can be entirely digital is even more susceptible to the world of ecommerce.

From the point of view of game publishers it makes a lot of sense. They need to spend less and less money on discs, boxes, printed labels, and shipping, and they no longer need to split the cost of a game with whatever shop it was sold in as well as the platform it’s being played on. Console manufacturers can take a bigger cut of game sales as they each now have their own, exclusive, digital shop. And increasingly we’ve seen publishers like Ubisoft, Epic Games, Electronic Arts, and of course Valve running their own digital shops for PC gamers. Valve, who once made such titles as Half Life and the Left 4 Dead series, are now essentially a company who run a digital shop. They do have a couple of multiplayer-only games, but the vast majority of their income nowadays comes from Steam, the biggest digital shop on PC.

As the current generation of consoles winds down, there had been speculation that next-gen consoles – currently slated for release later this year – may not even have disc drives any more, and that all games would be fully digital. It does look as though Microsoft at least has pulled back from that, offering at least one model of the poorly-named Xbox Series X with a disc drive. There was a certain amount of annoyance from gamers at the prospect of all-digital consoles, but compared with the backlash Microsoft received in 2013 with its always-online Xbox One it was much more muted. This upcoming console generation looks certain to be the last where physical game discs are commonplace.

Not that there will be anywhere left to buy them in another seven or eight years, at least not in person. A few years ago, post-release patches or fixes for games were uncommon, often reserved for fixing major bugs or for delivering major updates and expansion packs. But nowadays, almost every game seems to launch with a major patch on day one, with multiple patches and on-the-fly fixes rolled out for weeks or months after release. Thus, buying a game on a disc, even if it’s a single-player title, does not mean there’s no need for downloading. Indeed, for the last few years in the run up to Christmas there’s been advice even in mainstream news outlets telling parents to quietly set up a new console or game and download all its updates so that their kids aren’t stuck waiting for hours on Christmas morning before they can play with their new games. In this environment, where downloading patches and updates is a necessity in any online title and something that will improve even fully single-player experiences, there’s even less incentive to buy a game on disc.

Gamers themselves are becoming increasingly comfortable with buying games digitally, because despite some of the drawbacks mentioned above, there are some distinct advantages. Firstly, there’s no need to go anywhere. Instead of waiting in a queue in some shop at midnight or at 7 o’clock in the morning to pick up the game the moment it’s available, you can set your PC or console to download it the second it’s officially launched. Secondly, even with a slow internet connection like mine, games are downloaded in a matter of hours or overnight – a day at the most. There’s simply less effort required.

Epic Games was criticised when its PC storefront went live for being rather barebones and lacking in features, as was Google Stadia when that launched last year, but generally speaking most digital shops are good. They’re well-designed and laid out, it’s easy to both find a specific title and browse a wide array of titles, and they often have features like wishlists to save titles for later, as well as customisation options for a player’s profile.

One of the biggest factors has to be sales. Steam sales have become legendary in the industry, with the two biggest ones in the summer and around the holidays getting a lot of attention. Many PC games, even those only a few weeks out from their release, can be picked up at a significant discount – and many older titles can be 90% off or more. Some shops even offer free titles – Epic Games and EA’s Origin both have done this in the past. While PC gaming may be more expensive up front than buying a console, these kind of sales can make it a worthwhile investment.

There are also services like Xbox GamePass – Microsoft’s subscription service that aims to be the “Netflix of games”. All of those titles are digitally downloaded, with no need to visit a shop, and they’re all available for a monthly subscription fee instead of needing to buy them individually. While it remains to be seen just how popular this kind of subscription model will be with a wider audience, it’s already built up a substantial userbase. If someone asked me what the cheapest way to get into current-gen gaming is, an Xbox One S or preowned Xbox One and a subscription to GamePass is genuinely hard to beat for the sheer number of titles it provides.

Mobile phones, often derided by self-proclaimed “hardcore” gamers, are a legitimate gaming platform in themselves right now. Many iOS and Android games can be just as imaginative and interesting as games on other platforms – and they are all bought via Apple’s App Store or Google’s Play Store. The fastest-growing gaming market over the last few years has been on smartphones, and that market is wholly digital and always has been, further pushing people to accept digital distribution when it comes to games.

So where does all of this leave shops like Game and GameStop? Unfortunately the answer is that they’re on a path to bankruptcy and closure – it’s just a case of how long they can string it out. Some shops in larger cities may be saved by converting to selling gaming merchandise like action figures and t-shirts, but in smaller towns there simply won’t be a big enough audience to make that model sustainable, and many outlets will close.

For some people who may have been interested to work a job tangentially related to their favourite hobby, it’s going to be a shame that those opportunities won’t exist in future. And for current employees of these chains, it will be difficult to have to look for a new job in what is not an easy job market. However, if I knew anyone working for one of these companies, my advice would be “get out now.” By taking the initiative and looking for another line of work before the proverbial shit hits the fan, they would be in a much better position.

There are still some investors who can’t see the writing on the wall. And they may be able to be convinced to pump money into struggling chains to keep them afloat, but eventually I’m afraid the end will come. Some shops will continue to trade in retro games, but as the games industry continues its rush to make all of its new titles digital-only, there just isn’t a place on the high street for these shops any more. There will be consequences, and we may see some brands do better than others as a result. But there is only one direction of travel, and the destination is locked in. Just like video rental giant Blockbuster lost out to Netflix and on-demand streaming, game shops are set to all but disappear as we enter a fully-digital age for the industry.

All brands, shops, etc. mentioned above may be trademarked and are owned by their respective companies, corporations, etc. This article contains the thoughts and opinions of one person only and is not intended to cause any offence.