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Ubisoft and Take-Two in “dangerous position” as market goes digital, says Cousins

Monday, 18th March 2013 12:08 GMT By Dave Cook

Ex-Battlefield developer Ben Cousins has spoken out about the industry’s switch from physical to digital, and warns that Ubisoft and Take-Two might not survive the move.

The quote comes from an old Gamasutra interview – via OXM – that most sites somehow managed to miss at the time. It took place just before THQ collapsed but it’s every bit as relevant now as it was then.

The interview opened with Cousins sharing his own thoughts on the way his former employer EA approaches the digital sector.

“When I was at EA,” he began, “the public view – and it was also used internally – was that they would transform EA from a packaged goods business into a digital business, and they would always talk about higher margins on digital.

“And for me that was never really going to be viable, I don’t think, just because of that cost of transformation. For me, the best case for a company like EA is just to survive it, at the moment.

“And you look at how the traditional revenues are declining and digital is increasing, but the top-line revenue is basically staying static. I mean that’s not a profit growth, right? The digital side of the business [has to outpace] the packaged goods decline in order for them to get growth out of it.”

Cousins also warned that the rise of prominent indies with a good handle on how the digital market works will pose a real threat to two major players – namely, Ubisoft and Take-Two.

He continued, “I don’t think that any of the [independent] publishers at the moment will be big players in 10 years’ time; I think there will be either companies that have just emerged or whom haven’t been founded yet.

“Ubisoft, I think are in a really dangerous position, and Take-Two are in a dangerous position, THQ obviously aren’t going to be around for much longer I don’t think.”

Would you agree that the two companies named are in a dangerous position, as Cousins put it? Consider that Ubisoft’s digital earnings were up 143% according to its last financial report, equating to some €55.2 million. Meanwhile, Take-Two seems to have all its bets placed on GTA 5 at the moment.

What’s your take on the digital switch? Which companies are doing it right? Which are missing the point entirely? Let us know below.

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16 Comments

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  1. onefivefive

    I’d find it hard to believe that Ubisoft are in any danger given how many franchises they have in the air (e.g. annual Assassin’s Creed).

    However I’d believe Take Two could be in jeopardy due to their more staggered release schedule.

    #1 1 year ago
  2. OmegaSlayer

    Didn’t Ubisoft started to offer games from other devs (EA and WB) via UPlay?
    http://uplay.ubi.com/
    (scroll down)
    Also Ubi is the third publisher at the moment (after Activision and EA) and it seems to be in good relation with other publishers (Konami, EA, Square-Enix)

    About TakeTwo…they have GTA, until they release it physical, people will buy it in every form :)

    #2 1 year ago
  3. BraveArse

    I think the big publishers have to realise that convenience isn’t enough justification for £60 on a downloadable title, no matter how AAA it is. Just look at the Wii U shop sale today. If that’s not a sign that the prices were just too high initially then I don’t know what is.

    To my mind the quicker the corporate sociopaths at the head of the big publishers fall by the way side the better. The money isn’t there anymore to support that level of spending/greed, depending on how you look at it.

    #3 1 year ago
  4. Demigod

    What is this guy smoking? Ubi has their own digital delivery systems which was annoying while it was just drm works well now as a store. Their games are also available on nearly all other digital systems. You can also order direct physical copies from ubi in many territories so Take Two yes but ubi I just cant see his point.

    The question comes to mind What is he trying to sell to get into the news like this?

    #4 1 year ago
  5. Emorium

    The guys who just released Borderlands 2 and are now releasing Bioshock Infinite are putting all their eggs in the GTA 5 basket?

    #5 1 year ago
  6. Fin

    Ah, Ben “I have no fucking clue about the games industry” Cousins.

    #6 1 year ago
  7. DSB

    I’d be very surprised if Uplay has any marketshare. I got a complimentary Assassins Creed game with a graphics card once, and they had a 30 day download limit on their online store. Ubisoft are just a bunch of retards.

    I fully expect them to suddenly discover the right way of doing things at least a year after literally everybody else has figured it out.

    @2 They’re really not. Take Two are worth a lot more.

    @3 That’s not really backed up by sales. Perception is reality is the rule when you’re pricing something, it’s not about the cost of production but rather about the perception of value. So a game doesn’t suddenly become less valuable when you go digital. It may make them more money, but it’s not like they’re able to keep it these days.

    Practically all of the major publishers are incredibly bad at running a business.

    #7 1 year ago
  8. Walton

    @ 3 – you do understand that it is retail stores that dictate online prices for games right now and NOT publishers don’t you?

    Company X releases a game digitally for £20 but it costs £40 rrp in store.

    All retail stores then threaten to drop the product unless digital costs the rrp online too.

    In response, publishers sell game online for £40 rrp because they can’t afford to lose retail sales (yet).

    Retail then do discounts and sales so game is less than rrp in store.

    Publishers would love to sell games for cheaper online – it is in their interest to move people to online and away from retail as fast as possible. However retail stores won’t let them.

    #8 1 year ago
  9. DrDamn

    @DSB
    “So a game doesn’t suddenly become less valuable when you go digital.”

    I can’t sell it on, I can’t take it round a friends place, I can’t lend it to my brother. I also have an awareness that this cost less for the publisher to put out because of manufacturing costs, I feel like I am getting less.

    #9 1 year ago
  10. nikk900

    @8 That is simply not true. If you go on PSN you will see games from EA and Activision usually cost more than other digital games, just like in store they usually retain a higher price than other games. Most first party games are cheaper on PSN than in stores. The publishers set the prices for the games.

    #10 1 year ago
  11. pablo2008jedi

    For me, digital only will be a fail. Physical copies are cheaper, because sellers are competing with one another. Plus, wait a few months and the physical copy is 40-50% cheaper than digital.

    #11 1 year ago
  12. DSB

    @9 That’s obviously a problem with perception, but publishers have had no problems selling those games for the same as physical retailers in the past, which leads me to believe that the fact that sales are now down is simply because games are lacking in quality.

    It’s not like the recession has suddenly gotten worse, and people have less money than they had 3 years ago.

    It is absolutely essential to make it appear like the quality outweighs the cost though, otherwise it doesn’t work.

    It’s like selling toilet paper. The flashier the roll looks, the more you can charge for it. It costs almost exactly the same to make and distribute as the brand that costs half.

    #12 1 year ago
  13. Walton

    @10 retail dictate a minimum price that won’t undercut them (i.e the rrp) is enforced – anything outside of that is set by the publisher.

    #13 1 year ago
  14. salarta

    I think Ubisoft will stay in business, so long as they don’t pull more stupid crap with the DRM and the like. I wasn’t playing the Assassin’s Creed series at the time, but if I was, the news that ACII initially required an always-on internet connection would have been enough for me to not buy it.

    I also think that trying to go all digital is a mistake. Digital is usually only taken on when the game is much cheaper than a physical copy, and people do like to have a physical copy of things. At the very least, there are collector types that would want physical. For me, Tecmo Koei’s attempts to make several of their games digital only has led to me either not buying the game at all when I would have bought it day one as a physical copy, or outright importing a physical copy of the game (as in the case of Fist of the North Star: Ken’s Rage 2) instead.

    Oh, also I think Ubisoft will be fine so long as they don’t go to future E3s doing things like trying to spin glorified home laser tag to be the same thing as a video game.

    #14 1 year ago
  15. Lengendaryboss

    I Can understand why Cousins think that. But every PS4 game must be available on the PS Store and as for 720 are games allowed on the store instead of movies, music and killer apps such as Skype :). Ubisoft are in no danger and as for Take-Two as someone said above has GTA i buy it in any form (preferably Physical).

    #15 1 year ago
  16. Cobra951

    @9: Yes, you are getting less. The only plus is that you don’t need to insert a disc to play the game. Everything else is a minus. You don’t have a self-contained, transportable copy of the game when you buy digital, and that reduces or eliminates all your other options (which you already listed).

    #16 1 year ago