Can PlayStation Vita Save The High Street?

Sony's handheld offers a glimpse of a hybrid distribution future that retail and publishers both need.

PlayStation Vita finally launched in Europe this week, but despite tons of fanfare there's also a lot of scepticism about whether it will be the kind of success Sony needs or wants. You don't have to go far for lots of armchair punditry about the new handheld, of course, but there seems to be a lot of heart-versus-head debate surrounding it. On the one hand, it seems improbable that a 230 pure gaming handheld with no clear killer application will do much to upset the status quo. On the other hand, it's a wonderful piece of kit with tons of lovely software, which you would happily buy under most circumstances.

Vita's arrival this week is also interesting for other reasons though, one of which is that it's the first traditional gaming console to offer its complete catalogue of software through digital distribution in additional to retail - and all from day one. The PlayStation Portable nearly got there towards the end of its days, but by that stage it lacked the profile and momentum in new releases for its bold approach to really register. PlayStation Vita, on the other hand, is a huge new system launch by anyone's standards, and yet if you really want to do so you can buy all your software for it without ever setting foot in a shop or ordering online. The PlayStation Store will see to everything.

The significance of that can hardly be overlooked while there is absolute chaos on the high street, as the UK's only specialist games retailer, GAME (which also owns Gamestation), haemorrhages admin staff to cut costs and in some cases can't even take in stock for new releases. Tekken 3D: Prime Edition, which launched for 3DS last week, failed to make the UK charts at all despite promotion and strong reviews, but then that's not too surprising given that neither GAME or Gamestation were in a position to sell it to anyone. Whether this was down to the company's financial struggles isn't clear, but the timing is certainly unhelpful.

You often see a bit of schadenfreude among gamers and journalists about the failure of big companies to adapt to market conditions, and it must be tempting for casual observers to see the trends above and assume that the high street's loss is digital distribution's gain and so be it. Companies like Apple are raking in billions by selling apps and multimedia directly to consumers, which in turn is helping to educate mainstream consumers about the concept of digital distribution in the process, so why not?

"The traditional games industry will suffer enormously if we lose a specialist high street games retailer."

The only problem with that is that the traditional games industry will suffer enormously if we lose a specialist high street games retailer. That's one of the reasons you've got EA boss John Riccitiello on the phone to investors saying he's concerned about the health of a "major European retail partner" - he knows that if you take over 1 billion in games revenue out of the specialist tills every year you are not simply going to see that money rematerialise in the coffers at Amazon and Play.com - or even Origin, Steam or the PlayStation Store. You may not see a lot of it rematerialise at all.

Bricks-and-mortar games retail is vital to the games industry, but of course so increasingly are digital sales. The call Riccitiello was speaking on was to do with EA's third-quarter financial results (for calendar Q4 2011), during which he and his chief financial officer Eric Brown were also trumpeting 79 per cent growth in digital revenue. The challenge to overcome is that pretty much every major traditional games publisher needs both, and not just for income - prominent, dedicated high-street games retail also helps drive awareness in a way that the fickle supermarkets don't really care about, while digital distribution helps them to remain relevant in a world that's shifting more toward things like iTunes and, soon, the numerous app and media stores that will spring up on Smart TV dashboards.

So this is the dance that's been going on behind the scenes for a while: publishers like EA and Sony are growing increasingly bold with their digital adventures while retail struggles to adapt. Both parties need each other for different reasons, but, somewhat insanely, they have also been at each other's throats: publishers hate the retailers' second-hand game sales, from which they receive no direct income, and retailers hate the publishers' use of digital distribution, so they demand greater fees for in-store displays and more exclusive bolt-ons like those annoying downloadable pre-order incentives that make it harder than ever to get a handle on where you should buy something, and leave you feeling like you're always missing out on at least one cool thing somewhere else.

"What Sony has created with Vita's boxed-and-digital harmony is the future in a bubble."

Which brings us back to PlayStation Vita. If it is a massive success, it could pave the way for future games platforms to do more with digital distribution, but in the meantime this is a perfect opportunity for retail and publishers to experiment and learn, because what Sony has created with Vita's boxed-and-digital harmony is the future in a bubble. This is roughly what everyone will have to work with in a few years' time, so why not get on with it? And if there are hiccups and imbalances along the way, then the parties concerned need to work with one another sympathetically to find a new compromise.

If they manage that, then they'll all be laughing and so will we, because hopefully we'll move past this bitty, frustrating era of exclusive pre-order bonuses, online passes and other sticking-plaster initiatives designed to soothe the constant pain of friction between the shops and the people making the things they sell. This can be the golden era for quality games rising to the top - I genuinely believe that - so let's hope we see some common sense and conciliation to help us take advantage of that opportunity. If Sony's fine new handheld can be a key component of that, all the better.

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