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Speaking with Computer and Video Games about the state PC game distriubtion, Darryl Still of 1C, a Russian developer and publisher, claimed that some UK retailers refuse to sell Steamworks titles. According to Still, certain big-box stores have warned publishers that they won't stock games with Steam integration, such as Call of Duty: Modern Warfare 2 and Fallout: New Vegas.
Still's comment all but confirms a report by MCVUK last November that claimed "key" retailers were blacklisting Steam games to stifle competition. Not only are retailers bothered by online game sales cutting into physical sales, but they're also concerned about Steam's overwhelming grip on digital distribution because they're hoping to enter the digital market too.
"If we have a digital service, then I don't want to start selling a rival in-store," said a major UK games retailer. "Steam has made it so easy for everyone and they have lots of users. But how long do you wait before you take control of your own digital strategy? Like with iTunes, at some point it's going to be too late," said David Perry, CEO of cloud-based gaming service Gaikai.
CVG's interview shed some light on the difference between selling games via retail and digital outfits from a publisher's perspective. According to Still, if 1C sold a £20 game via retail, the company would make £7 per unit, whereas that figure doubles to £14 when peddled through stores like Steam. What's more, 1C would receive that money three or fourth months faster.
Along with raking in twice as much cash per copy, Still noted that the digital medium has other lucrative advantages over retail stores. For instance, you know those mega-discounts that seduce us every Christmas with $5 AAA titles? Cheap games obviously boost sales throughout the promotion, but they also stimulate full price digital and physical sales after the deal ends.
When the game returns to its normal price, "it does so with an uplift in full price sales both on Steam and at the retail stores…because there is usually a whole new base of consumers playing and enthusing about the game on the forums. This phenomenon contrasts completely with retail, where once a game is discounted, it is heading to the dump bins and then out the door."
Despite its dominance over the digial market, Still said Valve isn't controlling. "Because they come from a developer background their aims mesh perfectly with ours, which is principally to get our games into the hands of as many users as possible." "They work closely with us to make sure that the price and promotions we set maximizes the interest and revenue available."
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