the source article...

By: Groo (charlie.delete@this.semiaccurate.com), April 20, 2019 12:37 pm
Room: Moderated Discussions
Jukka Larja (roskakori2006.delete@this.gmail.com) on April 20, 2019 12:08 pm wrote:
> Groo (charlie.delete@this.semiaccurate.com) on April 20, 2019 9:36 am wrote:
> > Jukka Larja (roskakori2006.delete@this.gmail.com) on April 20, 2019 7:29 am wrote:
> >
> > > They have time to see how Microsoft will fare with their discless Xbox One. I'm somewhat surprised that
> > > it has taken so long. Downloaded games can't be resold, which should make Sony and Microsoft happy.
> > >
> > There are two big impediments to disc-free consoles, retailers and game makers. I asked this
> > question to console makers years ago and they all said the same thing and still say it now.
> >
> > 1) If you don't have discs you don't have retail sales. This of course cuts out retailers but
> > boosts profits for the devs and console makers. That said not having a retail channel pretty much
> > screws you, the consoles sell are roughly zero margins so there is no incentive for anyone to
> > carry them. Also consumers like boxes to keep on the shelf and look at which leads us to...
>
> So I don't know how things are elsewhere, but here (in Finland) it's easier
> to buy a Bluray or even CD player than it is to find someone who sells CDs or
> Blurays. I don't see how things would be much different for game consoles.
>
Margins on BD/DVD hardware are VERY different from consoles. I got the full rundown on console economics during the XB360/Best Buy days. The short version is the retailers make roughly zero on the consoles, normal margins on games, and huge margins on overpriced accessories. If there are no games to sell, they incentive to stock and sell the console is zero. You might sell an accessory or two when they buy it but the return visits for games and other things just went poof. Worse yet if one console has a disc player, guess which will be stocked/pushed?

> > 2) Almost every AAA game has a 'special edition' that comes with a plastic coin, trinket,
> > helmet, or whatever. These sell for a lot. A $3 plastic thingy makes a $59 game a $189
> > experience, I'll let you work out the profit margins on both variants yourself. You can
> > do the same with DL games but, well, not nearly as many people give a shit.
>
> If that's such great business, why the hell it is so hard to buy those special editions outside
> the major markets? Either they aren't that great business, or the publishers are idiots who can't
> handle the logistics to get the special editions to more than few countries most of the time.
>
I would say it is logistics and incompetence. That and higher income countries probably disproportionately buy idiotic things like this.

> > It isn't about can or whether it is a smart technical idea, such things aren't really of consequence
> > to planner. Making money is and a BD drive makes a _LOT_ of money. If they are giving that up, there
> > is a good reason for them to do so, or they are abjectly stupid.
>
> There are lots of console owners who never buy anything on disk and their numbers
> are going up. Just like many people never buy DVD or Bluray movies, because one
> or half a dozen subscription services is just so much less trouble.
>
I don't have really recent numbers but the trend seems reasonable. That said it is like freemium games, 99% of people never spend a cent but the 1% do. You are catering to the 1% here and it is usually a market too lucrative to ignore.

> > You will note that MS still sells boxes
> > of 'office' and 'windows' at retail. They contain a piece of paper with a code in them, that's it. But
> > they still do it. Don't expect discs to go away any time soon even if nothing uses them.
>
> Well, I don't expect them to go away. You can still buy Windows 10 on DVD or on USB
> media. It's quite telling that even though I assembled a new desktop for myself about
> two months ago, I don't remember which one I chose. Probably the DVD version, since
> that's the only one available in OEM form (in the store where I bought it).
>
I didn't mean to imply you couldn't get media, just that it is becoming far less common. OS installs will have disproportionate physical media for obvious reasons.

> I haven't seen anyone suggest that PS5 would not have a model with optical drive,
> but the fact is that MS already announced such version of Xbox One. I don't see why
> Sony's position would be so different that PS5 couldn't have such version too.
>
I agree, I was just responding to the thread where people seem to think it is a moot point for technical reasons. It may be but the financials for it are strong.

-Charlie
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