The future of game downloads

October 11, 2009

Industry figures have been saying that one day, whether it is in the near future or ten years down the road, that disc-based media will be out of the picture. That’s right, everything will be downloaded.

This means TV shows, movies, music, and even games will be all-digital media. We’ve seen it for a while with individual episodes of TV shows, with songs and entire albums, and even more recently with entire movies. But games? We have two types of downloads: games that are exclusively released for download, and games that are released both in retail and digital marketplaces.

The recent release of the PSP Go has certainly sparked the interest in the discussion once again. What does this mean for the industry? We’ll see how the Go sells, but for now let us speculate on the future. I, for one, believe that we have no reason to see this happening any time soon, if it ever does. The PSP Go is a great device for what it is trying to do, but it’s way ahead of its time. No one is going to buy it, especially with the lack of UMD support pretty much screwing over current PSP owners. And then there’s the price point: only $50 less than a PS3? Sony isn’t going to be winning any new fans with this strategy.

Some say this handheld is a test to see how well the market reacts to a handheld like this. But that would make no sense; Sony cannot risk losing money on something like this, even though I do not see the device selling terribly well. What would make the PSP Go successful? Releasing it five years later, as a brand new handheld that does not already have a library full of games that most PSP owners have hard copies of. Sure, this may be trying to appeal to a market of non-PSP owners, but even then, the system’s library just doesn’t appeal to that demographic, so it’s an uphill climb.

So yes, the Go is way ahead of its time; I do not see a system such as this succeeding until the next console generation at the earliest. Current PSP owners are upset about not being able to play their currently-owned games on it, and non-PSP owners won’t care that much in the first place. But does that mean game downloads are done for? Not at all. I believe Microsoft has the right strategy: slowly release a few Xbox 360 titles digitally, and test the waters that way. Nintendo and Sony have tested the waters as well, with the the Wii’s Virtual Console and the PS3’s PS1 Classics (which can be played on a PSP as well). Releasing old titles to a new audience, or even an older audience who may no longer own their favorite games, is a good way to get games out there.

You may be wondering what this all means for GameStop and other gaming retailers. There are a few retailers that refuse to stock the PSP Go because, quite frankly, there is no value in it for them. Downloaded games only hurt the used game market, which is pretty much what GameStop makes the most money from these days. Stop-gap solutions have been attempted; for games like Patapon 2, retailers have sold redeemable codes in boxes, but once digital marketplaces become the primary source for games, that will become an untenable strategy. Will a download-only future mean the end for stores like GameStop? It’s a very good possibility, but these powerful companies will fight the change, so this “future” is probably just an unlikely prediction.

So, the future is uncertain, but we are definitely going more towards a download-centric future. Maybe the PSP Go will succeed, but if it does not, it will teach Sony a valuable lesson about how to approach a piece of technology that is pretty far ahead of its time.