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Why digital distribution needs to evolve

Feature by Stuart Edwards on 20th August 2010

Two thousand and ten. 2010. It’s overwhelming to think we’re here already – we should all be crossbreeding with aliens by now, according to 60s propaganda.

This year was meant to be the year that digital distribution finally became the go-to format when buying a new game. Sony wired its new console with an at-the-time huge 60GB of hard disk; Microsoft held the consumer’s hand and took baby steps by giving us a limited choice in storage, whilst Nintendo buttered up the dedicated with a huge back-catalogue of classic games to download. This gentle lubrication prepared us for the market’s inevitable thrust towards digital distribution. Five years later, there’s a desperate feeling of anticlimax and empty promise; but why? There are two simple reasons. Firstly, the western world isn’t as digitally endowed as expected. Secondly, we’re not ready (yet).

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It’s fair to say that the promises of faster broadband connections throughout the western world, have thus far been unfulfilled. The concrete jungles of the U.K. are slowly being converted to fibre optic broadband, but this is the minority of the country. Complementing this, only the heavy internet users are reaping the benefits of 20MB+ connections; the mainstream market is yet to embrace it. Japan and much of the Eastern world may have the resources to unleash such a system whenever they deem society ‘prepared’, but in the western world we simply don’t have the required standard yet. If Sony holds true on its threat of removing physical media from its next console, then it could be playing Russian Roulette with itself. The PSP Go!’s failings against the traditional model is only testament to that.

“The PSP Go!’s failings against the traditional model is only testament to the failures of digital media.”

For argument’s sake then, let us take a hypothetical scenario where connection speeds have increased tenfold throughout the western world. Our hypothetical minion in this hypothetical world wants to buy a new hypothetical game. He can either log on to Xbox Live/PSN and purchase the said two-year old release for £19.99 (or $30), or take a short (hypothetical) bus into town and buy the same title for £8 from his local retailer. He can also then sell this game on once he has completed it for £5. The gaming industry may have been hit less hard by the global economic crisis than others, but the consumer has endured months of watching where every penny goes. Without any way of purchasing a temporary licence, or re-selling it then the consumer will nearly always opt for the physical copy. All this is without any hypothetical sentimental value to a beloved collection.

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As yet, nobody is truly pioneering the digital age, but the likes of Xbox Live and PSN would do well to look at Steam’s success. Over the pat six years, Valve’s service has evolved from a means to avoid piracy with in Half-Life 2 and to make Counter-Strike more accessible, but it has slowly developed itself into the go-to platform for digital releases on the PC/Mac. Steam is renowned for their incredible sales, with classic games often available for as little as £1. We’re tempted into buying games that would usually pass us by, whilst developers (particularly the independent) are finding weaknesses in the market, as well as seeing more of the final sale price. These seem revolutionary in contrast to Xbox Live’s embarrassing ‘sales’ that occasionally offer a third off of a handful of Arcade titles.

The frustrating thing about temporary licences in digital distribution is that the facilities are in place. Thousands of people rent movies from their consoles and digital T.V. boxes every day. Consoles urge us to buy our games straight off of their services, so where is issue in merging the two? Games such as Bayonetta that feature a straightforward 10-hour single player mode constantly litter the preowned sections of gaming stores. Surely it would therefore be beneficial to road test such a service with a similar release. This way the developers would see revenue from every player, whilst reducing publishing costs. If you want us to go digital, then give us a reason to. The worst mistake a company can make is to underestimate the intelligence of the consumer.

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We also need a reason to buy digital instead of physical. As we’ve discussed, the price of a digital product should be considerably lower than the physical by default, simply because it costs far less to produce. If there isn’t going to be a compromise on the price, then we need to see more for our money. What’s to stop the offering of free additional content with a digital purchase? I’m not referring to the insults of a free themes and gamerpics, but extra single player content or download codes. The likes of Halo could offer free map packs, whilst a digital copy of Bioshock 2 could have included the original for no extra cost, or an MS point rebate. Steam has seen success with such methods – consoles are naive to not follow suit.

“The worst mistake a company can make is to underestimate the intelligence of the consumer.”

The day that we can go online and download our brand new releases at a respectable price faster than it would take to go into town will be a better game for gaming. Millions of pounds will be saved on the production of plastic cases, gaming will be greener and the smaller developers will be on an even footing with the studios that give birth to AAA titles. Xbox Live Arcade and Steam showed us exactly why it is set to take over, but has since hit the fork in the road. Sony said the PS3 would be its last console to support physical formats. If that remains the case, releasing its successor within the next three years would be commercial suicide.

Time to put your money where your mouth is.

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About the author

Picture of Stuart Edwards

Stuart Edwards is a Staff Writer at Thunderbolt, having joined in November 2007. Aspiring journalist, recent graduate of Linguistics at Newcastle University, emotionless in favour of objectivity. Get in touch on Twitter @StuartEdwards.

Comments

  • pimpinassorlando

    20th August 2010

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    the first paragraph gave me a boner

  • Rob

    20th August 2010

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    With all due respect, for a semi-professional feature, there are far too many grammatical errors and words in places they shouldn’t be.

    That said, it’s an interesting feature though I believe the problem is that the Government’s plans to expand high speed internet (something which may or may not have been canned by now) would have benefitted the idea of digital distribution. As in Japan and parts of the States, households have up to 100Meg Connections, which would certainly incentivise those wishing to partake in downloading games. This proposed plan, combined with the reduction of downloadable retail game prices, could have brought about an increase in downloads of those sorts of games, but until anything like that happens, I don’t think downloadable retail games will ‘work’ as a concept for another five years at least.

  • DustinM

    20th August 2010

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    Personally, I don’t care about saving a few dollars by purchasing a virtual game over a physical game. I would rather spend my money on something tangible. Maybe that’s the collector in me, but I feel as if I’m just wasting money if I buy something that’s virtual and will have to be deleted when the HDD space runs low.

    I can’t display a virtual game on a shelf, hold it, admire the artists’ work on the cover, show it to my future children.

    No virtual game will ever be rare, highly sought after, or worth anything more than what it originally retailed for. There’s no Limited or Special Editions with collector’s items included in a virtual title.

    One needs to keep in mind that a good portion of the loyal gamers out there are people who fall in love with games and aren’t just looking for a quick gaming fix and moving on to whatever else will grab their attention. These kind of gamers/collectors/enthusiasts keep the gaming wheels turning. We pump our money into this industry because it’s something we genuinely care about.

    I understand the logic behind digital distribution. There’s no money being spent on producing cases, cover art, manuals, discs, distribution, etc. People don’t have to get out of their house and go to a store to purchase a game, or wait for one to come in the mail. If you want a game, by God, you should be able to get it right this instant! …in the form of a 4gb+ download.

  • Hank

    21st August 2010

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    All for digital distribution, majority of purchases are now in that format. But I am not sure one of your pillars is that secure. The bulk of cost when producing a game is not in the physical aspect. The unit cost of a normal, non-special edition title is at most $1-$2.

  • Stuart Edwards

    21st August 2010

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    Yes but the point I was making about physical vs digital markets are that digital ones are price monopolies - there’s no undercutting of one another to try and win the consumer’s sale.

    It’s a case of “this is the price and if you want it you’re going to have to pay that exact amount”. I mentioned Steam because they are the only service who are flexible with prices, who entice you into buying something you’d otherwise pass up.

    I’d be very interested to see the proportional figures of sales of a game on Steam, Xbox Live and PSN of a title released on the same day.

  • Philip Morton

    21st August 2010

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    The main barrier is surely bandwidth. Digital distribution works fine for smaller files, such as music and apps on iTunes, but for console games it’s not realistic to jump there just yet.

    You also have to remember that the US is a bit behind in terms of broadband, due to a lack of competition in some areas and lack of any coverage in others. Only when the US is up to speed will the major players bet on digital distribution for large games.

    Perhaps we might see a generation or two where you can buy the same in both physical and digital form. A gentle phasing out is probably more realistic than a sudden switch.

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