Digital Distribution appears to be the next big frontier for gaming. Everywhere you look, more and more stories/forum posts/blogs are being written about the digitally-distributed future of gaming. It feels like an inevitability, and many gamers are excited for the possibilities.
However, there are 3 key impediments to widespread digital distribution which might make it more difficult to implement and worse for consumers.
Despite my protests, games are getting bigger, not smaller. The new Xbox will most likely have a Blu-Ray drive in it, or something similar. Regardless, on-disc sizes of games are going up, not down. It’s not uncommon to see PC game downloads run close to 20 gigabytes in size, with some patches inching closer to that 1 gigabyte mark. The common wisdom is that more games are going to have an internal resolution closer to actual 1080p as opposed to the upscaled sub-HD resolution that most games currently run at. The result of this is going to be even higher-quality textures that take up more room on a disc. It won’t be surprising to see next-generation games tilt more towards 30 and 40 gigabytes in size, a 300% increase in some cases. What does this mean for you, the consumer? Well, in a system reliant on digital distribution, Internet Service Provider bandwidth caps, an increasing commonality, put a limit on how many games a consumer could potentially purchase. In one example, a user on AT&T UVerse could download a potential maximum of 10 games per month. This, of course, does not take into account that users consume data for things such as streaming video, renting movies, purchasing music, and viewing high-quality images made for high-resolution displays. A consumer can go to the store and purchase a physical copy of a game an unlimited number of times. A consumer on a bandwidth cap may not have the same luxury.
Even without data caps, as games are getting bigger, the strain on servers grows. This is somewhat mitigated by the fact that users still purchase physical copies of games when able, but some games, such as last year’s Diablo 3, show a vision of a digital future that isn’t so nice. By any measure, the first day or so of Diablo 3′s release window was a disaster, primarily due to the game’s distribution and server systems. Large games such as Call of Duty: Black Ops 2 can sell in excess of 1 million copies on release day, but even this load is spread out over thousands of retailers across the entire country. If game distribution was centralized under one service with a limited set of servers and bandwidth, it’s entirely possible that digital distribution of the biggest games (especially in situations wherein multiple big releases come out on the same day) simply isn’t possible, yet. The download speeds on home consoles ranges from decent (the Xbox 360) to horrible (the Playstation 3 and WiiU), and this problem would only be made worse by having those consoles be the sole distribution channel for games.
The bulk of the promise of digital distribution as a cost-saving measure seems to be centered around the omnipresent and popular Steam sales. However, Steam sales are not representative of digital distribution at large. Albums sold on music services such as iTunes rarely if ever see sales (actually, some of the prices have gone up), and many of the library titles available on Microsoft’s Games on Demand service on Xbox Live are actually more expensive than their physical counterparts. The reason for this? Shelf space. Space in a store is finite, and it’s up to retail buyers to make sure that the highest-margin products are given the most shelf space. It’s actually an extremely competitive marketplace, with multiple publishers and distributors fighting over key areas such as space on eye-level shelves, or eye-catching end-caps. In a digital store, space is infinite. There’s no incentive to put titles on sale in order to clear out stock, and this keeps prices artificially high. Digital distribution skews the supply side of the supply-demand equation, artificially keeping prices up.
Additionally, in a digital-only future, there’s no such thing as a resale market. It’s possible now to purchase a game, not like it, and sell it back to a store or a friend for cash or store credit. There’s no such recourse with digital sales. Losing the ability to resell games could serve to depress the market. Even now, with a full-time job, I find myself trading in games in order to buy new games as they come out. Without the ability to sell games I’ve completed, I would miss out on many new releases.
The game market is properly spread out at the moment. A consumer has a myriad of choices when deciding where to buy games from and stores are forced to compete for business, currently by way of store exclusives for pre-orders. Each store has its own decentralized customer service arm by way of the employees in each individual store. If there is a problem with a game or system, it’s easy for a consumer to simply go to the store and return or exchange products. However, in a situation where all software is digitally distributed, it would become more likely that each platform holder would have their own exclusive online store, taking the retail store out of the delivery chain and consolidating everything under their own banner. The first byproduct of this market consolidation is that thousands of jobs would be lost. This might not have a direct effect on every consumer, but it would damage the economy, which isn’t good for anyone, especially companies looking to sell a product. The second byproduct of market consolidation is that competition is no longer a necessity. Typically, as market competition decreases, prices go up. Combine a consolidated market with a theoretically infinite shelf space, and there’s a recipe there to have games remain at their original market value in perpetuity.
The final, and most terrifying byproduct of market consolidation is what happens if any of these platform holders/retailers cease their retail service. Sega and Atari both used to be major players in the console market, and both are currently now barely making games. Fortunately, Sega doesn’t need to exist for a player to pop in a copy of Sonic Generations, but if the game were digitally distributed by Microsoft, and Microsoft suddenly went under? There may be no way to play the game in the future. The biggest impediment most consumers have to digital titles is that there’s a lack of tangibility. With restrictive, online-only anti-piracy measures becoming more common (and sure to increase in a future in which every game is sold digitally), it’s easy to envision certain games (or entire platforms) ceasing to work for long periods of time, whether due to a simple outage or, worse, a company no longer offering the service and disabling previously-purchased games.
There’s a long way to go in overcoming the potential hurdles digital distribution faces as a method of selling games. However, when considering the potential downside of a digital-only future, it might be best for those hurdles to remain in place as long as possible.
Is the game market ever going to be purely digital? Am I crazy for thinking that would be horrible? Let me know in the comments below.