It looks like Runescape developer Jagex has marked physical games for death.
Speaking to GamesIndustry.biz, CEO Mark Gerhard spoke on the future of games formats. “I think, 10 years out from now, we’ll be talking about [physical] retail nostalgically, as a museum piece,” he said. “I don’t think there’s much there that would give it a second life.”
Gerhard reasoned that the retailer industry was taking “huge chunks of margin” away from developers, which is why the digital space is the preferred way to go.
“That all erodes the economics for developers being able to make money. They take a chunk – say 20 or 30 per cent – the publishers take a bit, and after inflation it’s no wonder that the independent games industry isn’t alive and vibrant, because they’re not making any money,” Gerhard continued.
“[Developers’] response is almost desperation. ‘We’re going to go straight to the customer. We’re going to go online. We’re going to bypass the sequence that’s taking so much from us…’ I recognise that it’s sad, but I think it’s a fait accompli.
“It’s sad to see an institution decline, but the writing has been on the wall for quite some time – the internet didn’t happen yesterday… People are still playing games. They’re still doing business; they’re just doing it in a different place… If you don’t adapt you die. It’s as simple as that.”
Gerhard’s comments are clearly reflected in the recent financial troubles that UK retailer GAME Group has found itself in. Will it even take a decade for these retailers to die out?