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Archive for November, 2010

Why do consumers, especially gamers, love physical media?

Monday, November 8th, 2010

Will physical media be soon supplanted by digital?

Although digital delivery has been gaining more and more recognition and is estimated to generate nearly £6.5  billion  of new revenue by 2013, it is still complementing, not displacing, physical media. And at least for the nearest decade media companies are to expect a period of synergy between physical and digital rather than ‘cannibalisation’. Why? Because basically people like to have what they own and be independent from the way publishers are ruling a game.

According to survey conducted by NPD, 75 % of game buyers prefer to have a boxed, retail copy of their game. Is it for collector’s sake? Out of nostalgia? Well, not only. 65% declare they would download the game if the title was 10% cheaper to download than buy at retail. There is also a ‘novelty factor’ which digital media seem to be taking for granted. While the price of a physical copy is more likely to drop down, the drive disc version may stay at the same price indefinitely, especially when there is no storage problem.

Another explanation for a preference to physical media is its independence from the publisher and licensing restrictions. Digital games do not belong fully to the user, they  are only under license to use, so the publisher has complete control.  There is also a trivial aspect, basically physical media are less harder to lose. There are no concerns about the servers going down or possible free or reduced price re-download. Many have pointed out that the  trade off digital media should be of much lower  price than the price of physical media, until that happens streaming and such is not all that viable.

Not only consumers share this view. Many retailers also perceive digital media as ‘ high investment low return business model’, as there are many problems in stock:  mobile internet access and reliance on the speed of downloading, supply chain customization, lack of standards in the whole sector. Searching for  effective content protection policies is one of the biggest challenge as pirated websites are more and more sophisticated. Ironically, in many regions of Europe and Asia it is still easier to find pirated movies than the legal DVDs.

In the era of cloud computing digital distribution is a natural part of the process and cannot be avoided. It is only the question of adopting infrastructure in order to provide a simplified and coherent method of data distribution.

What is the future of green packaging?

Thursday, November 4th, 2010

There is more interest in recyclability than in developing alternative materials

No packaging company can afford to be labelled as ‘environmentally unfriendly’. Consequentially, green awareness is seen as a powerful asset to boost sales. Unfortunately – as there still are no clear rules for naming a particular product ‘green’ – this often leads to overstated claims and the overall devaluation of the term.
One such example would be claiming that discs with only slightly reduced emission of CO2 are ‘green’; whereas this obviously is not a straight forward case.
Clearly there is a need for special regulation on this issue so that the consumers are fully informed about what they buy. Similar regulation is already to be put in place by the EU with regard to orange juice.

On the other hand, event the noblest of concerns – such as the environmental ones – have to be reconciled with customers’ needs. These however often tend to contradict each other; like the demand for reduced costs and increased sustainability. It seems that many will applaud minimizing environmental impact, but only few are willing to carry the weight of the costs involved. Especially that – since the packaging is a part of the product rather than an instant throwaway – there is more interest in recyclability than in developing alternative materials; no matter how sophisticated.

Again, it is necessary to carefully estimate the costs: is putting extra financial effort in producing yet thinner discs – which are recyclable to the same extent as the currently produced thin discs – economically viable?
The current data seems to suggest that the customers are more concerned about sustainability and less willing to experiment with new technologies.

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