How Nintendo’s Digital Expansion Will Help Retailers And Developers

By Sato . December 6, 2013 . 12:28pm

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Over the past few years, downloadable games have become more and more common across all platforms. Famitsu magazine gives us a close look at the growing trend of digital purchases, and how it affects the market for developers and retailers.

 

  • Would purchase a physical copy—74.4%
  • Would purchase a digital version—20.6%
  • Would purchase the cheaper one—2.6%
  • Depends on the situation—1.4%
  • Depends on the title—1.0%

 

The above is a look at a chart indicating the answers of those who were asked which one they’d purchase out of a physical or digital copy of a game. Of the 7,643 people asked, almost three-fourths felt they’d opt for a physical copy, and the majority of them said it’s due to the feeling that comes with actually having a physical item.

 

Other reasons include: “Because there are instruction manuals,” “Because I can get bonus items,” and “I don’t see the merit of downloading software.”

 

Out of the 20.6% who went with digital, people had reasons such as: “Because it’s simple,” “So I don’t have to go out and buy it,” “It’s cheap,” and “To save space.”

 

While the numbers for downloads may seem low, according to the Famitsu research, it actually isn’t bad, considering that digital downloads have been more of a recent way to purchase games, while physical copies have been around from the very beginning.

 

Most of those who didn’t go with either choices had reasons such as, “I want to buy the cheaper one,” and “It depends on the hardware and title.” Since digital copies are often cheaper, there’s a higher chance that those who prefer to pay less will eventually go with more downloads in the future, while the latter can be described as collectors, who’d prefer to have physical copies.

 

According to a manager at a Tokyo electronics department, Bic Camera, prepaid Nintendo eShop cards in particular have been selling quite well recently, especially when hit titles such as Monster Hunter 4 and Pokémon X and Y are released.

 

However, with online games such as Final Fantasy XIV: A Realm Rebron, and PlayStation Vita games that tend to have plenty of DLC, it has been noted that players of these games are starting to make online transactions from the comfort of their homes as well, which also means a decrease in customers who go to stores such as Bic Camera for their purchases.

 

With plenty of new games coming out next year, the manager would like to urge fans to visit the store, where they can try out some of the latest games for themselves. However, he realizes that digital sales won’t be slowing down anytime soon, so he hopes they’ll be able to make a better connection with the customers through the sales of prepaid cards.

 

While on the subject of downloadable cards and digital games, Famitsu spoke to senior analyst Eiji Maeda, who states that Animal Crossing: New Leaf, which was released in November of 2012 in Japan, was a crucial factor in helping Nintendo start selling downloadable games. (Note: At the start of 2013, the game had sold over 700,000 copies in the form of downloads in Japan alone.)

 

“By placing downloadable cards on the shelves of storefronts, and using a system that provides customers with a similar sense they get from packaged software, it would eliminate the risk of retail stores having excessive stock,” says Maeda. “It’s safe to say that it’s a risk-free system for the retailers.”

 

Furthermore, download cards will have great appeal to those who refuse to make online purchases, especially in Japan, where people tend to be more wary about where they share their personal info.

 

“Nintendo’s business style of expanding downloadable purchases, will in the long-term, prove to be a merit for the developers,” says Maeda, as Famitsu points out that thanks to social and browser games, more people have been making online transactions, which may lead to more purchases of digital games down the road.

 

With titles such as Super Smash Bros. for Nintendo 3DS and Wii U, Mario Kart 8, and Metal Gear Solid: Ground Zeroes coming out, it will be interesting to see how it will affect the digital market next year.


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  • Suzaku Kururugi

    “…and the majority of them said it’s due to the feeling that comes with actually having a physical item.”

    This right there is why I prefer physical over digital. If it’s a game I don’t care about as much or a game I never would have played if it didn’t go on sale, I’ll go digital. But for series I love or have great interest in it HAS to be physical. I see the value of digital over physical, especially on handhelds but it just isn’t enough to get me to go or want to go purely digital.

    Also this is coming from a console gamer, I’m sure PC people would be much more used to digital than I with their game services and the fact that PC DVD-ROMs don’t mean much since they just install the game anyways.

    • Tom_Phoenix

      I’m primarily a PC gamer and, in general, I much prefer physical over digital. Plus, something that is worth noting that people tend to ignore is that PC retail is still important here in Europe, hence why you have examples of PC games that were released in retail here but not in NA (not to mention Steam prices in Europe can be quite horrendous at times).

      That said, I can’t really blame the people who are (almost) entirely digital, since physical copies of modern games are problematic. Not only are they incredibly bare-boned most of the time, DRM has all but eliminated the used market. Consumers need some form of risk mitigation, so rapid discounts and frequent sales on DD services occurred as a response to that.

      Unfortunately, rapid discounts themselves are problematic in their own right, since they threaten to eventually turn games into a commodity….but that’s a discussion for another time. Anyway, on rare occasion, we do still get a physical copy that is worth buying, such as the PC version of Dark Souls and The Witcher 2.

      http://img.photobucket.com/albums/v477/Tom_Phoenix/DSC06879.jpg

      Also, if nothing else, physical DVDs do still have the advantage of cutting down the time it takes to actually start playing the game, since you don’t need to waste time downloading it beforehand first.

      • Laer_HeiSeiRyuu

        Which is now defunct for the
        Xbox and the PS4 to a lesser extent

      • Suzaku Kururugi

        Thanks to you both for enlightening me.

    • Tatsuya1221

      As a pc gamer, i prefer physical, but unfortunately, i’m pretty poor, and digital is almost always cheaper, and if they aren’t i always wait for a discount.

      Most of my physical purchases are on the ps3 because honestly, most of the DD games i get are of genre’s i like but do not love, if it’s a jrpg i almost always go physical unless it’s not an option, but for let’s say, some platformers, i will go digital.

      Honestly i doubt i’ll be gaming at the same level as today in 10 years, as most games seem to not be worth the price asked these days.

      If the game is truly worth it, then i will buy 2 copies in some cases, like i will be doing for LOH:Tits.

    • James M Wallace

      THIS. Etrian Odyssey is the only series where I MUST have physical versions due to my love for the series – not to mention the additional trinkets packaged in the later releases. Rare JRPGs for me are worth purchasing as physical releases as well – unless they’re out of print or become marked up to such a degree that the only viable method of purchase is through digital means.

      For almost everything else, I utilize digital methods due to convenience.

    • http://gentlerobot.com/ Gentle Robot

      The “feeling of having a physical item” makes as much sense to me as printing out emails.

      The only benefits of physical copies are resale value and, puzzlingly, lower prices. Anything else is psychological.

  • MrRobbyM

    But of course. Being able to purchase something in many ways is almost always beneficial to everyone.

    The chart doesn’t surprise me at all. I love owning physical copies for most types of games. I love the feeling of actually owning a game I love. It’s kind of like a child’s teddy bear, in a way. For smaller, pick and play types of games, I actually prefer purchasing digital. It just makes it even easier to get into the game.

  • fireemblembeast

    Why can’t we have $10 cards? >_>
    I mean, for gifts and stuff.

  • Dantrox

    I have been recently buying more and more digital games. It is much more comfortable.

    As an example, I usually buy japanese psn cards instead of the japanese phisical edition of the game.

    This said, I still prefer phisical over digital… it just feels better to have the game in my hands than “simply” downloading it.

  • Minos

    Well, digital helps a lot on Latin America.

    New games can cost from 80 to 100 in my country, but their price its normal on the Internet.

    As per me, I have someboy who bring them to me by free from USA, but for the rest its a no brainer.

    Even more if you live on Argentina or Brazil.

    • MrTyrant

      This is my main reason. Most of my digital games are ones that I would have preferred to buy them phisically but the prices are just too much.

    • Wtv

      I live in Brazil. Tried to import games for some time, but it’s too bothersome and they will arrive only one month after or more.

      Then I realized that I hate to switch discs everytime anyway and went full digital.

  • http://www.gamefaqs.com/features/recognition/21421.html?type=4 Kashell

    I’m going to always be in the school of thought that prefers physical copies of games to digital. There’s just something empty-feeling when it comes to downloading a game that isn’t a simple title that belongs in Play Store.

  • http://jesse-dylan.livejournal.com Jesse_Dylan

    Nice thing about that is retailers can sell the download cards at discount, too, since Nintendo refuses to be reasonable with prices on the eShop.

    • Grape Monet

      They never do, though, at least not in the US. No store I’ve been to in ever discounts the downloadable versions of games.

      • http://jesse-dylan.livejournal.com Jesse_Dylan

        Yeah, I’ve never even see the download codes for sale in the US. Gamestop sells a few PSN download codes at discount, but it’s been the same few for years.

    • Laer_HeiSeiRyuu

      Stop buying phone games for cheap and maybe they’ll slash things down by 2 dollars permenantly. Since they have sales every week

  • http://level6-shift.tumblr.com Level Six Shift

    While I definitely understand why people prefer physical copies, as I used to as well, I’m part of the minority that prefers digital games, especially for 3DS. Not having the small cartridges saves me a lot of trouble, with no risk of losing them, and the ease of buying it on the eShop helps me buy games early on to support tremendously, as I can’t drive still T-T Still do get some physical though, like I bought the Pokemon X game physical.

    • Rytan

      I tend to only buy physical copies if they come with bonuses now. It’s just a lot more convenient and I can’t turn around and resell the game then regret it later on. Which I had already done with half of my collection over the past year. :( I’ll get them back in digital form eventually!

    • celery

      I definitely agree! Some games I feel I should get physical, like Pokemon, just because I have the other Pokemon titles physically. But digital is so convenient, I actually prefer it–and I never thought I would prefer digital to physical! Nowadays the only factor I really take into account is, “Does the physical release come with physical bonuses?”

  • persona_yuji

    I only have one simple problem with the prepaid eShop cards.
    They don’t sell them in my country…

  • http://twitter.com/matty_125 matty

    It’s interesting reading this where I spent the previous night transferring save data from my PSP to the Vita.
    At first, I thought, “Man, what a pain this is!” but it donned on me that if I went the digital route more with games I wouldn’t even need to worry about past gen’s consoles. I mean, I’ll still own what I bought, but I have all of previous games (namely, ones I never got to) in one system and it’s more accessible because I actually use it.

    I’m glad to see that Nintendo is opening up more to downloads. I think it’ll benefit a lot of people in the long run.

  • Guest

    I’d love to buy more stuff physical… but digital is so cheap in comparison due my country’s exchange rate. Still when I’m fairly sure it’s a game I won’t enjoy for long, physical it’s the way as I can sell it even at a higher price.

  • InfectedAI

    I refuse to support Nintendo’s digital distribution platform until they fix it. They have the worst DD system out there. Games are tied to your physical hardware rather than an account which causes many problems. It’s completely unacceptable that there’s a chance you’ll lose all your purchases if your system is ever broken, stolen, lost, etc.

    And the upgrade process is a pain in the ass. Want to sell your 3DS to upgrade to an XL? Too bad. You need to buy the XL, connect both systems to the internet and transfer the content from one machine to the other, then you can sell your original system. And the System Transfer software isn’t perfect. It does screw up on occasion.

    Nintendo needs to get with the times and implement an account system for their digital distribution on the Wii U and 3DS. And allow cross buying on the Virtual Console. They expect you to pay for a game twice if you want to play it on the 3DS and Wii U, and have an upgrade fee to transfer Wii purchases to the Wii U. Compare that to paying once on PSN to play a PS1 game on your PSP, PS3, and Vita. Not to mention the Virtual Console is overpriced to begin with.

    • sd28

      and have an upgrade fee to transfer Wii purchases to the Wii U.

      this part isn’t true the rest is fine though

      • InfectedAI

        If you want your purchases to work outside of the emulated Wii mode (like being able to play on the Wii U tablet instead of the TV) you need to pay an upgrade fee per game. Maybe I should’ve clarified.

    • http://yaminoseigi.blogspot.com/ Yami no Seigi

      It is good thing that Nintendo highly appreciate their digital content but seriously they need to consider evaluating their business model if they want their eshop to compete with PSN or Xbox live considering out of three digital stores, eshop is in the bottom by far margin

    • LaserVision

      No kidding. Itunes already solved this problem ten years ago. It’s 2013.

    • http://gentlerobot.com/ Gentle Robot

      I still fail to see the account system as anything but insurance.

  • Audie Bakerson

    “Since digital copies are often cheaper”

    On PC, where multiple marketplaces exist. Digital copies on closed systems have incredibly stagnant prices because there is no choice of marketplace (Capitalism, ho!). Instead the majority of publishers freely include the price of printing, distribution, most of the retailer cut and various other costs that simply don’t exist for a digital game and pocket it, which is a major reason digital hasn’t really taken off for for consoles like it has for PC.

    I’ll take physical copies OR dirt cheep digital ones. If there was actually a significant advantage to digital I might get a game at normal price instead of retail (like if Sony let me buy stuff on Japanese PSN, I’d buy games that way instead of importing, as it would be MUCH quicker)

  • James Beatty

    I really like purchasing digital only games from the eshop, but I’m still not 100% sold on digital versions of retail titles. Not really for the accounts, but because of the storage space and losing the ability to sell games since I do that a lot to actually afford buying new games. It is cheaper to buy on the eshop thanks to the digital rewards program if I choose not to sell my game, though. I kind of regret buying 3D world at retail since it’s a small file and it’s one I always want access to on my wii U. I might finally switch over with games I’m sure not to sell like Mario Kart and Smash bros though

  • http://yaminoseigi.blogspot.com/ Yami no Seigi

    Nintendo digital market will still not be able to catch Sony’s PSN at least in Europe region, Firstly the price of the digital game is the same or can be even more expensive than the Physical copy that i can find in retail store and the price of the digital only content is just unappealing compared PSN.

    The reason why i get physical copy is that if don’t like the game anymore i can sell the game which is common in my place and pretty much there is no reason for me to get digital copy when i can get the physical one.

  • Covnam

    I prefer physical copies of games, but I will go digital for a good enough discount, like on steam. Being on a handheld also adds to the likely-hood I’ll go digital for the convenience when I travel, but there does still need to be a savings there.

  • LazuliteLiamz

    I’m leaning more towards digital, simply because it’s more convenient.
    I don’t need to travel to the store to get it, switching between games is easier too, especially while commuting.
    As for games that I really love, I’ll double-dip! Digital cause I can get it ‘right now’ while waiting for the limited edition _<

  • ShawnOtakuSomething

    I prefer physical copies of games. nothing beats new game smell…

  • Auvers

    I prefer physical as well, I see some of the merits of digital but none of it works for me, I have a horribly slow connection so downloading a game would take forever plus I don’t like having to worry about data storage, there’s more room on my shelf most of the time! I’ll probably never bother with Nintendo’s online retail aside for perhaps to support some of the digital only games like Mighty no. 9 because of the lack of account system plus the lack of SNES/Genesis(possibly N64…) support on the 3DS rate they are going with the virtual console on the wii u it’ll be another 7 years before they have everything the wii virtual console has.

  • FlyingPony

    I prefer physical, its great to look at the packaging and the physical cartridge/disk, manual and bonus item is too good to pass, and seeing currently the pricing of digital and physical about equal on console/handheld, and physical is offering more advantage with a little trip to the shop (enjoy walking into a game shop to look around), physical is my way to go.

  • Haganeren

    I don’t like physical game for the “collector” aspect of it. It’s just because I can’t lend a digital game and I don’t trust my Hard Drive for keeping this game. (I have already lost a 3DS… And all digital game in it and my 360 had a ROD and I never understood why I could only play my games in demo-only form when I’m not connected)

  • smashbrolink

    I think the perfect thing to blend the two, physical and digital, is allowing us to download games to cards.
    That way, even if the system becomes corrupted, we still get to keep our games.

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