CDW Feeds Video Games the Bomb

Posted by Denalan on Tuesday, August 16, 2005

The CDW buildingCDW (Computer Discount Warehouse) has decided to stop selling video games. You heard it here first! Twenty seconds of Google searching didn’t uncover this story anywhere else, so it must be exclusive.

Ok maybe this isn’t particularly newsworthy. But, this is meaningful in another way: perhaps this is a sign of the end of an era of PC games as we know them. As consoles gain more and more popularity perhaps this is adversely affecting traditional sales of desktop PC games.

I remember shopping at CDW at their retail outlet store when it was in the Buffalo Grove, IL area (before they moved to Vernon Hills) way back in the early 1990’s. I thought the store was great because they had just about any computer component in their warehouse, from obscure adapters, to strange varieties of backup tapes, to just about every software package you could think of, including games. This was probably one reason CDW got so popular; they had a large inventory of stuff of almost every component imaginable.

So why is CDW discontinuing the sales of video games significant? Well considering how large CDW is, and how they have a reputation for carrying a large variety of components, it’s interesting that they’ve chosen to do this. Shelf space for video games is supposed to double by 2007; the already huge multi-billion dollar game industry continues to grow. Since CDW hasn’t traditionally concentrated on console games, the only conclusion I can come to is they haven’t been selling many PC games.

A really lame stock CDW photo

CDW execs attempt to dig a hole with little shovels. They don’t notice the big ass backhoe behind them.

Also, don’t forget that two years ago CDW bought Macwarehouse, one of the largest online retailers of Mac hardware and software. This move away from video games affects Macwarehouse. A search on the Macwarehouse section of CDW for video games reveals only two games: a Windows game and a PS2 game. For Mac users, this means yet another retailer that doesn’t carry Mac games.

For me, it means the only stores that carry a selection of Mac games are the Apple Store, Microcenter, and CompUSA. With the possible exception of the Apple Store in Chicago (which isn’t particularly easy to get to in my case), none of these stores have a particularly large selection of Mac games. I’ll have to rely on mail order to purchase my games.

And with about three handhelds and three consoles (with more to come), it seems like traditional video game stores have chosen to neglect the PC games. EB Games stores I’ve seen seem to have reduced their shelf space for PC games—they even shoveled the games off into a corner at one store I visited. Gamestop appears not to have a lot of shelf space for PC Games, either.

Personally I hope this isn’t the end of PC games–I prefer playing them even when the same game can be found in a console version. But things certainly look bleak for the PC desktop gamer.

7 Comments »

Comment by Dan

8/16/2005 @ 9:04 am

Great article Steve, but I wouldn’t go pushing the panic button just yet. World of Warcraft alone should be enough of an indicator of how healthy a market there is for PC games. The installed subscriber base for this one game exceeds the subscriber base for Xbox Live, which Microsoft considers a success and is banking on for their future console revenues. Live subscription is also 1/3 of the cost of a WoW sub.

There is obviously a market for PC games, it’s just harder to quantify in terms of expectations. With a console, a game developer or retailer can look at the number of hardware units sold, and say, “That’s how many potential customers we have for this game”. How can you do that for PC’s? Everyone that buys a Gamecube is buying it to play games on, but the reverse is not true for PC sales. What about specs? Is there a market table out there that tells those interested not only how many PC’s have been sold, as well as potential PC’s built based on components sold, but also details the specs of such machines and lays out the percentage of how many will be capable of running that piece of software? Not even remotely possible.

I also think that the era may have come and gone where the niche computer superstore brick&mortar location can be successful. As I recall, CompUSA has been tottering pretty close to the edge there themselves in the past few years. The reason behind this can be seen in the success of the significantly less specialized Best Buy or Circuit City, and even Walmart (all your faves Steve ;-) ). Those people who aren’t savvy enough to need a selection of 40 different video cards to choose from will go to one of the above mentioned stores and pick from the 5 or 6 that they have available, feeling that they’ve missed out on nothing. Those that are savvy enough to need the variety are just as likely (or perhaps more so) to shop online at the same company’s e-commerce site or a NewEgg or ZipZoomFly where they can get better pricing and significantly greater options. It’s not the games section that’s dying…it’s the whole superstore location business model.

Comment by Jeff S

8/16/2005 @ 10:56 am

Dan’s comment, specifically the part about people who don’t need/want a selection of video cards, got me thinking about the issues of PC game vs. console game sales and why CDW and others have made decisions to minimize or totally do away with PC game inventory. In short, PC gaming is hard to keep up with and way too fucking expensive.

The developer side:
While some PC game developers go to great lengths to make their games playable and entertaining on older hardware (Half-Life 2, World of Warcraft), others load every available effect and gimmick into their titles without much attention paid to optimization. Sure these new PC games look great on brand new PC hardware, but even a year-old PC can be left in the dust. Console game developers work with a specific and inflexible hardware set and very tight CPU and memory restrictions. Yet console games, for the most part, are looking every bit as good as most of today’s PC games.

The consumer side:
Two years ago I built a computer that was, at the time, the king of gaming PC’s for about $1500. I now find myself having to turn down detail and effects settings on just about every new game demo just to get the game to run at an acceptable speed. To get myself back up to speed with a premium PCI-express video card and motherboard to support it, I’d have to drop another $500. The Xbox (which cost me $200) was released in 2001 and yet I can find new, graphically rich and entertaining titles that run perfectly almost four years later.

What we end up with is a large percentage of new PC games playable only on the newest 5% of performance PC’s. The average consumer can’t be expected to research and spend money on a new motherboard and video card every time a new DirectX feature is added. Mind you, I am a huge fan of PC gaming but big-budget developers are shooting themselves in the foot by making their newest titles accessible to only the technically savvy gamers who can afford frequent upgrades. It comes as no surprise to me that PC games are receiving less attention from both online and brick & mortar game stores.

Am I even on topic anymore?

Comment by Tim

8/16/2005 @ 11:26 am

Yeah, brick & mortor’s are on their way out. I automatically assume whenever I go into a Microcenter or CompUSA that the prices are 25% higher than what I can get online. Half the time you go in just to check out the displays and see the products in person before going home and buying them cheaper online. That can’t be good for business.

That said, I don’t think it relates to the state of PC gaming. There are several reasons why a computer store might clear shelf space for other things. The advantages brick and mortor’s have over online sales such as seeing things in person and having humans there to help you are nearly moot with regard to selling video games There is no benefit in seeing the game in person nor is there any benefit in having an employee help you select the right game for you. People are more willing to buy used games online then buy used computer parts online. People are also much more knowledgable about how much games should cost then they are about how much computer parts cost so someone like CDW can more easily mark up their products and get away with it. Furthermore, PC games are fast approaching the day when no retail box will be necessary and downloading will be the way to go; thus cutting off the middle man entirely.

I definitely don’t think a lack of shelf space is the reason. I’ve never seen a computer store that didn’t also have DVDs, CDs, and other shwag filling the ailes. Most of them sell console games as well. Besides, PC games now come in iddy bitty boxes…

The point Dan made about not being able to effectively quantify the PC gaming market will become more of a problem for consoles soon. The next gen’s and handhelds are all being marketed as all in one media centers for use as a DVD player, stereo, photo center, etc. More and more the emphasis on gaming is being downplayed. It will be interesting to see how this affects the market…

Finally, someone who insists on playing Mac games shouldn’t be surprised about not being able to find them in stores. You made your bed, you lie in it. You’ve chosen the underdog and it is your lot in life to have to rely on the internet. You should feel lucky you live in a reasonably urban area. Where I grew up, it was Wal-Mart or K-Mart or nothing.

Comment by Dan

8/16/2005 @ 1:06 pm

I don’t care how much of an all-in-one media center the coming waves of consoles try to be…anyone who spends between $300 and $500 on a game console with no intention of using it for games is a damn fool. That’s what cheap PC’s are for; and DVD players; and phones. Maybe in the generation after this coming one, the inclusion of these features will not add to the price tag, but I doubt it. In fact, I would go so far as to presume that the only reason that they’re including these multimedia features (which can’t be that expensive to implement) is to justify raising the price tag so they can mitigate the losses they take on every hardware unit sold. It will always be about the software because that’s the only place in the business where they can make money (not counting online, which is still about playing the games). The first manufacturer that forgets this and puts out a console where games take a backseat to any other feature it has is going to learn a very hard, very expensive lesson.

Building on the point Jeff was making, I think the biggest problem with the flashy eye candy is when the substance isn’t there for backup. If it’s a truly fun game, they you’ll be willing to turn down the resolution and effects just to be able to play it. Presumably, the majority of the people who spent upwards of $2-3000 to build gaming bombs for Doom III’s release felt pretty robbed when they stopped caring about the visuals and realized that they had another 10-15 hours of monster closets ahead of them.

Comment by Chris

8/16/2005 @ 3:11 pm

You buy games at CDW?! I think the reason CDW is backing off video games is because people don’t buy games from CDW. From a strategic business standpoint it makes. Either you diversify to the point where you can sell to any joe off the street (a la Bestbuy) or you specialize in providing the highest level of service in one dimension. Niche marketing is nothing new to business, but it is a bad sign for CDW that they seem to be re-visualizing their core standards.

As for consoles becoming more capable, I feel like our opinions on what people use them for are tainted by the fact that we’re all extremely computer savvy. We wouldn’t use or buy an X-Box 360 for a multimedia center because we all have more powerful machines to do that already; however, those who don’t have computers would seriously consider it. My girlfriend’s brother just started his sophomore year of college without a computer - something I couldn’t even imagine. He just doesn’t use one. If you’re going to spend money on a game console, why not buy a console that can play mp3’s and handle digital photos? He doesn’t have anything else that can do that. For that matter, if you wanted to buy a DVD player, why not buy one that also plays video games, like say, an X-Box?

The gaming console is becoming the Model-T of digital entertainment: cheap, widely available, and accessible to those who are intimidated by the variety of computer options available. It’s no-haggle pricing for computers. You lay out your money, and they guy at EB hands you a box that does everything you want it to without more effort than plugging it in. Dan’s comment about buying a cheap PC is dead on, it’s just that the X-Box IS a cheap PC. At least, it’s getting there.

Comment by Tim

8/16/2005 @ 5:46 pm

Dan, if people are willing to shell out $1400 for a Bose Acoustic Wave stereo which is essentially a hunk of plastic with a CD player in it, I wouldn’t put it past them to buy an Xbox 360 and not play games on it.

Comment by Dan

8/17/2005 @ 12:10 am

Yes Tim, but does anybody shell out $1400 for a Bose Acoustic Wave stereo and then use it exclusively as a cutting board?

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