July 19th, 2009
“Free Trade” Gathering Ground on Internet ‘Market’?
As in any other business, the games business sooner or later has to face an entire range of trading challenges, one of which seems to gather more ground, due to the influence of the digital era that brought an essential change in consumers’ thinking, this challenge being called the “Free trade”. The concept of “Free” has been and still is part of our everyday economy for such a long time, since many products that became widely spread on the market started to get a less priced value sometimes even reaching the zero level. This happens mainly to the products that one can not add further values or can not use the company’s image in order to support the product’s value. Producers can approach different methods to maintain a politic of high price, but sometimes at a cost that can involve moral issues thus emerging the effect that could be called ‘damage’. And exactly this situation may occur when it comes to networks supported by media. Media has always been seen as high-valued mean to promote the image of different segments of the market. We talk here about physical media that managed to create an artificial rarity which allowed the prices to be maintained on high levels.
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But the strategy of the physical media suffered the damages afore mentioned due to the appearance of digital technology, internet being the way through which the scarcity of information and media is pushed aside. There are modern technologies, such as BitTorrent, for instance, which displays hundreds of copies of the media’s results in a matter of short time and all these for almost zero cost, in this way changing the value of media in the consumers’ perception. This leads to the appearance of piracy that the industry fails to estimate its correct impact for the future times.
Due to the reasons of morality and law involved in using piracy, luckily a lot of consumers do not turn their faces toward piracy, though this is represented only for a short period of time, since the psychology of piracy is insinuating itself in the perception of the consumers. Lately a certain gadget for videogames consoles has been released in order to keep piracy away, but for other platforms piracy proves to be an easier way to perform and this is where “Free” concept starts to be in charge.
This “Free” concept is about preparing the games companies to recognize the decline of the media’ value in the perception of the consumers, and decide to cut this decline by releasing their products for free. The method they use is in the shape of boxed products giving away the up-front costs, relying on the capabilities of a game to get the consumers back in order to make some money via advertising, game time cards, micro-transactions or other services.
However there are some companies which do not plan to go through the transition, preferring instead to keep the traditional business model and at the same time struggling to find a way to replace boxed game incomes with ongoing income flows delivered by “Free” products. Yet the question still stands: Is “Free Trade” gathering ground on Internet ‘market’?








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