Marketplaces for digital goods are more prevalent than ever. Regardless of whether you vehemently oppose them, use them as a sales channel or are a fan of the cheap prices they deliver, the fact that they exist at all is a sign of the changing game consumer.
As the games industry reaches middle age, its consumers have never been more segmented. The older more established consumer still adheres to the traditional purchasing channels and information sources. The younger consumer, or next generation gamer has behaviour sets that are almost unrecognisable when compared to older generational predecessors.
The obvious one of course is that they are online as opposed to at the mall. They are also harder to reach when it comes to being marketed to. They consume content via YouTube, and Twitch and watch e-sports and frequently watch strangers playing games thousands of miles away. They find their information from following threads. One thing however that next generation gamers demand, that so often gets left out of the conversation, is fair price.
It’s a sensitive topic in Australia, particularly given that it is probably the only country in the world to have its own government inquiry into the price of software. The evidence suggests that the next generation consumer, those aged between the ages of 16–20 doesn’t agree with the outdated pricing structure of traditional AAA publishers. It’s fair to say that the pricing structures of these games have not significantly changed since they were constructed around the printed package, delivery, distribution and retail to end user model. Despite a huge change in distribution methods to consumers and the efficiency that digital delivers through platforms like Steam, Origin and GOG, not to mention aggregated content suppliers like Nexway or Ztorm, the current pricing structures are doggedly adhered to.
Why?, I can only guess to protect the illusory margins of distributors, wholesalers — because they just don’t reflect the reality of digital delivery at all. Nor do they reflect the pricing that sees millions of games and game codes per month change hands in the secondary markets around the world.
This is where Marketplaces come in. They deliver a direct line between wholesalers, distributors and resellers to the next gen gamers and turn the retail margin into savings that delivers a ‘fair price’.
If you have any doubts whether publishers and developers are taking advantage of the marketplaces, just look at some of the publicly available traffic data that is going through some of these sites. This traffic is not there to browse — this traffic is that next generation gamer paying a fair price for a game.
The marketplaces are sometimes hard to defend. There are many stories about the claims of stolen codes and fraudulently acquired codes. But if they really were what is sometimes written about them, there wouldn’t be hundreds of payment providers lining up to deliver them services.
The Australian games industry has been very resilient and managed to hold on to high margins but the horizon is fast approaching whereupon the current generation gamer will reduce their spending and the next generation gamer — well they are already left the retail high street.
Australia as part of a global marketplace is always been very threatening thought for many businesses. Australians are world renown for their ability to pay inflated prices for goods and services. For many businesses whom fill those needs, Australians paying fair international prices is the stuff of nightmare. But the good news is — it also works both ways.
As Australians find greater efficiency in digital commerce through the delivery of digital goods and services, the market is far less isolated commercially than it’s ever been. As such Australian businesses could find audiences and consumers all over the world willing to buy goods and content. But 120 dollar games just won’t cut it. It has to be reasonably priced.
Some of you may find this idea somewhat distasteful and akin to promotion of a grey market. But the reality is the publishers in the games industry created the grey market for their own gain, and Australians were front and centre in its creation. But that’s a story for another day!
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