Ben Gilbert: prediction

Transcript context

…Yeah. We should do a follow-up. We should. All right, so one more that I'm going to amend. I wrote in my notes the decreasing power of distributors in the internet era. But it's really the changing nature distribution in the internet era because I think that if you look at the power that Activision had historically and then you look at the power that Blizzard has had more recently, the nature of these studios is that they can kind of do their own distribution once they get scale. Once they establish a customer relationship once and they have a Battlenet, they have a steam, like they don’t need to incur a new cost every time of going and printing a bunch of CDs and then putting them in boxes and then putting them on shelves and getting people to go to the stores. Like actually, you acquire a customer once and you can retain them for a long time. It really inspires more of an ecosystem view of your customer where you can sort of keep sending new titles to them and figuring out what they would like for really their entire lifetime. So I look at this like Activision sort of had to make a play into the content world because not that they were dumb pipes like a Verizon or something or the way a lot of people think about Verizon. But not that they were just dummy distribution but the importance of what they did changed and they sort of had to adapt their business model and do something different because it almost gets into Aggregation Theory here where all the video games are not aggregated into a single place the way that all of information and advertising is starting to get aggregated into Facebook. It’s still kind of fractured among multiple game publishers but you really do see this incredible concentration of power because distribution is done differently now and it becomes “winner take most.” Aggregation Theory.…

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