Capcom has been pushing quite a few games through digital download pathways, and while this isn't directly Street Fighter related, Christian Svensson offered up a few more details on what the benefits are to using this delivery method.Digital downloads are more expensive than retail. At best they'll have the same price as retail, which might be true for 1-2 months after release. But publishers get more money for digital downloads.
Sven: Prices are kept with parity at retail, effectively more to protect the retail channel. That said, portal costs are higher margin than retail margin, so the, "more money to the publisher," is true, but not to the extent you may think it is. So some of the cost of goods sold benefit is eaten into. The real benefit to publishers is the avoidance of inventory risk and the avoidance of any pocket out-of-stock issues that impact sell through. Neither of those affect unit margin though.
If you're getting a game on day 1, you're more likely to get it BEFORE day 1 on retail, while if it's digitally downloaded they are never unlocked before the release date.
Sven: Sorry, but this "benefit" of retail goes away soon too with network authenticated games. Even though a retailer may break a street date (which they're not supposed to) in many cases and in increasing amounts, the authentication/matching servers won't be turned on anyway so you still won't be able to play until it's "launched" officially. While I'll agree this is true, in the future of GFW with SF4 for example, we wouldn't turn on the GFW servers until launch day. Steamworks and Gamespy and SecuROM and other authentication systems have had the same mechanisms in place for years. In short, this "benefit" is going away quickly. I wouldn't be surprised to see these sorts of mechanisms move to the console world as well.
Pre order bonuses have simply exploded the last few years with retailers in the US, and similar bonuses are extremely rare with digital downloads. Why do publishers do this?
Sven: Nearly everything we've done with digital distributors on PC has had a 10% discount for preorders. Sure it's not a stuffed toy or a figure or a lenticular print, but it's something. As far as why publishers do it? If retailer X's order was 10K units before offering them a particular pre-order item, and after you give them a pre-order item it's 18K, and that preorder item costs about 4K units worth to produce and fulfill... you do it.
That said, retail will never go away. In many cases, a digital customer is an incremental customer (or rather, increasingly, the retail customer is the incremental customer). Different customers have different preferences.
