The challenge of going digital

I remember the time when publishers all were looking forward going digital with distribution. "It's here" they said and most of them were too early.

Now as digital is here there is a resistance going digital as they finally realize what it means: it means your product is visible worldwide - all at once - and if its quality is not good enough everyone is going to know about it.

In the old economy retail played a major role. It allows you to control sales by controlling shelf space. If you were good at doing this you could sell a minimum viable number of copies of your games - even if they are under average quality. There is always the 1% impulse buyers.

Now that is gone if you go digital. Visibility is no longer under your retail sales control. Someone else tells his audience whether your product is cool or not. No wonder the big guns try to establish their own digital distribution portals like Origin or U-Play and clone Steam - to control the "digital shelf".

Take a look at Steam: estimated revenues are 1.5b US$ in 2012 excluding micro transactions.

This means Steam is huge. In fact their revenues are larger than most publishers. And this does NOT include item sales! Check out the footprint: Steam is as important as retail. So yes digital is here and publishers are cautious what it really means.

It means it will be harder to get attention as suddenly all products available - worldwide - are fighting for attention. Before only your local markets did, and many smaller companies didn't even enter your home turf. Now everyone can. A good preview how hard it will be to get visibility is the App Store.

"Wait a second - what about consoles?" you might say. Recent rumors and leaks suggests that the next generation console will offer all games digitally and on disc with both offering instant play, with the disc merely replacing the necessary download. This means digital will be 100% there for all games - circumventing retail. And we know that digital trumps retail for many users as you can buy when and whatever you want independent on distance, time and location.