What do you see as the future of
retail versus download titles? A lot more download stuff is coming,
but a lot of people seem a bit cagey about going against retail. What
do you think?
JH: Well, people are still very comfortable
going to a store and buying a game. We experimented with that with
Warhawk, when we released both, and I think we had a lot of success
with it. To make our retail partners happy, we gave them a value-add.
They had a headset that came along with the game. And we sold more at
retail than we did on download.
I think what's cool about the download
space is that we can release games that would just be noise for retailers.
They'll take lower-cost jewel case games aimed at children on the PC
side, but those aren't the games we typically do. We have higher quality
There's no mechanism to get a $10 game to you right now other
than online, but the neat thing about it is that we can drive people
back to retail with games like Warhawk, because now our customers
hopefully realize that when we release one of these games, we're going
to back it up with continued online content. We just released an expansion
on Warhawk in September, and we'll release another one in April.
Each one makes the game bigger and bigger.
It seems to me that retail has too
much control for not being game developers, of what comes out in terms
of games. You couldn't release flOw in retail as a boxed product
for PS3. I don't know. It's a pet peeve of mine that people want to
still please the retailers when they're making a lot more money off
of games that developers sometimes make.
JH: Well, they take a huge risk. They're
carrying an inventory. They don't know whether the customer's going
to like the game or not, yet they're sitting on stacks of boxes of these
things, and they've got to maintain stores, keep the lights on, keep
the workers paid, yadda yadda yadda. And our costs for direct distribution
We have a significant investment in
the PS3 and establishing the network, no doubt, but basically, I'm not
carrying an inventory around. When you purchase that game from me, boom,
we download it from the servers, so the distribution costs are very
low. We pass those savings along to our customers.
I understand the retail side of things,
and we couldn't be here without them. That's important. And there will
always be a place for big, epic games like God of War, where
it's an event. You want to go to the store and be there at midnight
when it goes up on the shelves and be one of the first people that play
through it and brag to your friends about it. Those are fun. Those are
I mean, where are you going to get
your hardware, you know? (laughs) A lot of the times, when you buy that
hardware, you're going to buy a game along with it, and I don't think
we're going to see retail just go away.
I don't think digital distribution
is going to cut them out completely, and I don't think that will necessarily
be the right thing. I mean, a lot of things have been available for
a long time online, like with Amazon.com, and they haven't killed the
book business. People still like going to a bookstore and hanging out,
Also, there seems to be an attempt
with downloadable services to emulate a storefront, so you can still
sort of browse. It's arguably a better experience, because you can actually
play it before you buy it.
JH: Yeah. I think with these types
of games, this is absolutely the right space to be selling them. We
could not have gotten flOw to the consumer if we did not have