Chapter 11

U.S. Videogame Sales Remain Uninspired
http://www.vancouversun.com/technology/gaming/videogame+sales+remain+uninspired/3677594/story.html

Summary:
Compared to last year, the sales of videogames and software has been on the decline.  However, this can only be said about the physical sales that happen in retail stores - it is difficult to measure whether or not the industry itself is going downhill due to the amount of downloading that occurs online.  However, the sale of videogame accessories has shown improvement compared to last September 2009.  Sony's Move, motion-sensing controllers, for the PS3 helped push sales upward.  As well, the Xbox 360 Live and PS3 points cards are popular items.  These cards can be used to purchase online products from online game play networks.  Nowadays, sales by digital distribution are of growing importance to industry sales.


Connections:
In relation to this article, for merchandising businesses that sell videogames and software, their gross profits would decrease as more sales occur online.  For example, companies that sell Microsoft Office products will not necessarily make the same revenue off these goods; Microsoft allows consumers to buy Microsoft Office online - this profit would then go directly to Microsoft.  Although this does not affect consumers much, retailers will lose profit due to online availability.  Furthermore, retailers have to decide on how much inventory they should have on hand.  If they have too much, the company would have to lower the selling price due to depreciation.  Too little, customers may become disgruntled having to wait and order in the product or the customer will purchase the same product from a competitor store.

Reflection:

As the Internet plays a more prominent role in people's lives, the amount of online transactions that occur will increase.  However, there will always be a problem that affects the profits of many companies.  Piracy.  There are many sites out there in the cyber world where you can download digital content for free.  The content available includes videogames, movies, computer software, and music.  As more people download, not only do merchandising businesses lose profits, but also the producers and artists behind the product lose profits.  Internationally, this is and will continue to be a growing issue.  Even though software can be downloaded, accessories cannot.  Therefore the sale of accessories will be maintained as consumers will continue to purchase the desired product from a retailer or order it.