63: Wal-Mart Rules

Even if you don't shop there, or even live near one, the retail giant Wal-Mart has probably affected your life in some way. Allen Varney discusses the Wal-Mart Effect on the gaming industry, and how parts of the industry are trying to break free.

Wal-Mart Rules

Allen Varney posits that online distribution may be the technology that unshackles the chains that Wal-Mart has put on the content and creativity of the games industry. However, what most tech writers fail to recognize is the appalling lack of quality conduits linking consumers to the internet. Not to mention these connections cost far too much for the amount of bandwidth they provide. Cable, phone, and wireless networks in the US hold a stranglehold on the potential of the internet to become the marketing and retail juggernaut it so desperately wants to be, simply because we have failed miserabley in the construction of high quality, high speed networks. I still can't get a decent signal on my cellphone and I live in a metropolitan area that serves over 200,000 people.

I remember the promises of telcom companies, before the internet was even in the public conscience, that fiberoptic networks were just over the horizon and that they would connect you to the world, "at the speed of light." That was decades ago and I am still waiting. Thus, today, if consumers in the US want to connect to the internet they must pay their cable provider exorbinant sums of money each month (as I do) or run data over the old twisted pair network their phones use (DSL). Meanwhile, the fiberoptic network is still, "under construction."

Until the infastructure is there, the promise of the internet mega-boom that will revolutionize the retail world is nothing but a pipe dream. One that has already cost dot.com venture capitalists sizeable sums of money, when the dream failed to materialize into reality in the 1990's. Just ask yourself why the largest traditional retail chain in US history has come to fruition in the era of e-tailers?

The potential is certainly there. We have the largest (in terms of capital) and most prized consumer base in the world. But if companies, game publishers included, want to distribute their products via the internet, they better push the communication and media companies to actually get some guys out there and build the networks, then offer access to consumers at an afforable price. The thing is, no one wants to pay for it and failing to do so will only result in slower-than-potential growth and moderate success. The Reign of King Wal-Mart will live on I'm afraid.


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