Wednesday, November 07, 2012

The Data Blitz Raid (scytherage's take)

My wife has given her thoughts and has provided a lot of the 'facts' about this story. I only caught wind of it today and I thought originally this was just some minor thing with NBA2K13 being the only game at issue. Upon reading more and finding out over 2 million worth of games were seized, wow, I realized this was pretty serious stuff. I also saw other posts on Pinoyxbox and other blogs about how bad it was, with the store being closed and essentially putting a halt to their business operations for a day or two....Looks like Datablitz was subjected to public humiliation in this incident. Note that not all people are gamers so to people not familiar with the games business it just makes them lose a bit of face to have police coming in, and word going around about selling pirated games for a store with a large ORIGINAL signboard at their stores.

I've read most of the stories and know some of the facts. In the end I'd rather side with Data Blitz on this.

They're not perfect, sure. But imagine a world without them. Just visit SM's Toy Kingdom and fathom paying 3,000 pesos for your games. That's a world I'd rather not live in.

Games are a luxury, they aren't a necessity. Perhaps that explains their high prices. But the question is always, how high should their prices be? That's a complex problem.

From what I know, the market here locally for games is rather small. We're not going to turn into Singapore, Hong Kong or Japan anytime soon. People have to have a lot of disposable income to get into the gaming hobby. So having games be affordable is crucial for it to grow.

I'm sure there will be those that would side with X-play because it's entirely possible they do have some rights to selling that game exclusively. But if they are going to make an issue of this, I don't think they should have approached it they way they did. The tactic they used just does not win them faith with the very people they want to sell their product to.

At the root of this problem are a lot of other issues, parallel importing, grey markets...honestly I'm no law expert so I'm not going to get into arguing on this side of the fence. What I simply understand is this: relatively speaking, Datablitz offers very good prices. Compare it to play-asia, compare it to shopping in Hong Kong or other Asian countries....the prices they offer is relatively fair. I guess my wife brought up a very good point about 'how exactly do they do it? do they evade taxes?'

We don't know that. It's not like Data Blitz is publicly traded or anything. That's their business. I'm to assume that they do; if you're in business in major malls like that, with hundreds of games and a lot of customers, know what, if i was in that kind of business it would be a very stupid idea not to pay the right taxes.

It is entirely possible that they don't---but we don't know the facts and it isn't fair to think that 'because their games are cheap, they must be doing something corrupt/evil/whatever'.

The other thing is the idea of the 'exclusive distributor'; i have a hard time understanding this. Who made them exclusive? Is there some kind of court legal document that would say this? Completely out of my scope here, again i dont know any law stuff. But other stores are doing the same thing that Data Blitz is doing. If this whole exclusive distributor thing is such a big deal then how come other people are getting away with it? It seems the law in our country only applies to those who can pay enough to the cop who is going to catch the crooks. If the cops aren't paid, they won't do anything. That probably explains why pirated games/movies/etc can be sold in major malls even with the PNP just blindly passing by the stores. It's a strange, weird society we live in here in the Philippines. I think this whole Data Blitz raid underscores a deeper societal/cultural problem that needs to be addressed.

My simple view is that X-play probably paid an INCREDIBLE amount of money for exclusive rights to games like NBA2K13. When they eventually got the game and started selling them, they found out that the demand here....isn't really that great. They were probably expecting to sell hundreds of thousands of copies. But the truth is, game consoles, well, buying LEGIT games for game consoles is a middle class thing here in the Philippines. The middle class is about 1% of the population, and not all of that 1% buys original games. It's a really tough sell to market video games here.

So I can imagine these guys at X-play were stuck with thousands of unsold NBA2K13 copies. So what do they do? They start looking for someone to blame. They see Data Blitz, a successful business....and realize they can make back what they lost with their huge investment in ONE LOUSY GAME by suing the pants off them. I suppose their objective, really, is to get a settlement of some kind.

This probably has nothing to do with 'principle' or exclusive distributorship rights or anything like that. It's more likely about recouping that big investment.

If anything, the mistake of X-play is they probably overestimated the demand for NBA2K13. Yeah, you'll hear your buds talk about that game, if you're a middle class Pinoy with other middle class kids. But video gaming is NOT a "masa" hobby. Not everyone can afford it, even the pirated variety. It's still a big luxury here. And with people scrambling to make ends meet, buying a video game is likely the last thing on the majority's minds.

If they had factored in a bit of research before buying a billion copies of NBA2K13, then maybe they wouldn't be stuck in this conundrum. Market research is very important. It sucks to sit down and think and crunch numbers, but if you don't do it, you will end up like X-play here. One thing I've learned about starting a business (note: i dont have one but ive seen enough to know some things...), some people have great dreams but they dont have good plans, some people have great ideas but they dont have a good structure/foundation behind their ideals, and that's what usually kills great business ideas. X-play is likely going to be a classic example of this. But they are going the 'smart' route by going for the lawsuit.

Well, that is, if they win.....another thing is going the legal route can be expensive....

Other conspiracy theories ive heard --- the GMA connection, well that is troubling. If big media like GMA start seeing console games as a potential profit source, and if console games get handled like how X-play is handling it, we're going to see some dark times in console gaming here in the Philippines. Say hello to the 3,000 peso PS3 game. I really hope that does not happen.

But then again, if it does, I'm sure the market will respond in kind. By pirating even more games. Great job X-play, you just set us back 20 years in convincing people to support original titles. *sigh* *facepalm*....