The Committee: The state of digital distribution

January 12, 2011

The Committee is in session. We’re taking on various issues in gaming, and our word is final. In our second installment, we look at the world of digital distribution: its past, present and future.

In support

Mike Clark: There’s a variety of reasons as to why physical distribution is superior. First, there’s the fact that we have a physical item in our possession. Something that is a part of a comfort zone, as digital distribution has only been around for a very short time compared to the millenia of acquiring physical things. It’s harder to conceptualize that one owns 40 digital games than it is to look at their shelf and see 40 physical copies.

Then, the matter of purchase. Not everyone has the ability to buy digital items. Like myself, some people are forced to use physical currency to buy things. And in that same area, one cannot resell digital games. All sales are final, no refunds. Bought a bad game digitally? No money back. A physical game? Bring your receipt and return it, pawn it off, or keep it for years then sell it. It’s real, it’s there, and you can still redeem it for some kind of worth if you want to get rid of it.

In opposition

Gerry Pagan: While I can’t deny how good it feels to physically own software, whether it’s on a shiny Collector’s Tin or a sealed console game case, there’s something that can be said for how convenient digital downloads have become. Thanks to services like Steam and Good Old Games, I’ve been able to find and play games that I’d have a hard time hunting down a physical copy, minus any costs involved in shipping said games to my location or the high prices that go with acquiring games that are either rare or had low print runs. While I’ll still opt for a physical copy of a title I want to acquire, Digital downloads have changed the way I purchase games, more so than the used game market. 


In support

Graham Russell: Clearly it has. The last few years have seen a resurgence in creativity and innovation, and it’s been driven by the kinds of small games that wouldn’t have seen the light of day before the advent of mainstream digital distribution mechanisms. These tiny companies are putting out all these fresh ideas, but taken on their own, they’re incredibly unpolished and not ready for primetime. That’s why the larger companies have seen success in rounding out these ideas and incorporating them into the things they’d do anyway.

Ultimately, it’s good for both parties.

Then there are the nice side-effects of the industry shift. Digital-only games have made more go online, which helps those communities and allows for fun multiplayer experiences. They’ve pushed game prices down some, which helps the consumer, and they did it by reducing overhead, which means that (with some exceptions) it doesn’t hurt the game makers much in the process.

In opposition

Lillian Harle: If you step back and look at the numbers, digital distribution both helps and hurts the gaming industry. On the one hand, developers can basically ship out an infinite number of copies of their game to a multitude of people for little cost. It gets the company name out, plus it makes it so they don’t have to split costs with a retailer. On the other hand, not all customers can access digital distribution routes, and most of the time, this distribution is at cost, or consumers won’t buy thus said product unless it’s at cost.

A good example would be Steam sales. Though more product is being moved, it is at such a low cost that very little headway is actually be made to make the game profitable. Add on the fact that, even though memory is fairly cheap nowadays, the market for physical copies of games is still very strong, and to take away this strong market would only be a detriment. 


In support

Shawn Vermette: Maybe I’m crazy to suggest this, after all, I didn’t exactly wow my teachers in my business classes in college, but I believe that having a sell-back or re-gifting system in place would actually help sales of digital games rather than hurt them.

First, demos are fine and dandy, but not all games have them, and they are oftentimes a poor representation of a game. Due to this, I am hesitant to use them as a measuring stick of the worth of a game that I am stuck with, for good or ill, after I purchase it. Second, if I know that I’m stuck with a game, whether I like it or hate it, I am less likely to take a chance on a game that I’m not 100% sure I’ll enjoy. With physical games, if I feel I’ll probably like the game, I’ll usually take a shot at it, since I know I can get a decent amount of money back for it if I don’t care for it. With digital games? I have to be pretty close to 100% sure in order to buy it. 

The big reason this doesn’t exist is that publishers are afraid to lose money. Fair enough. However, one advantage of digital is that it is easy to record how much someone paid for a game. Thus, it’s easy to make sure that you always refund only a percentage of the game’s purchase price and give it in Steam Bucks, or Microsoft Points or PSN cash, allowing both sides to win.


In opposition

Graham Russell: Digital titles have forced prices down, and a lot of the reason publishers let it happen was the assurance that one sold game meant one sold game. The industry is reeling from the used game boom, as when GameStop sells you a pre-owned title, they don’t see a dime. The other way publishers have tried to combat this? Ventures like Project Ten Dollar, where they hold parts of a game hostage to those who buy used. Generally, people don’t like this, but it’s understandable for a company to want to make money when its product is sold. I’d much rather see the digital route become more common, as prices can beat pre-played boxed versions and the developers still get their share.

Besides all that, there’s no reason for online stores like Steam or XBLA to refund players for purchases. If you want to try before you buy, that’s what the demo’s for. Playing through a whole game? You’ve gotten your money’s worth out of that. If someone else wants to play it, there’s no reason they should get a discount for a “used” digital copy (as it’d be identical to a “new” one).

When Steam and other places have such a lenient policy on use for multiple systems and a tendency to sell at a large discount, I just don’t see why there’s a push to make them give up the few advantages they have for publishers.


In support

Andrew Passafiume: Downloadable games will eventually become the dominant future for gaming simply because publishers want to cut costs and developers want to be able to try new options. We’ve already seen a larger focus on the downloadable space with games this generation, and bigger publishers pushing for less and less focus on boxed games. Ubisoft has eliminated instruction manuals, eco-boxes have become prevalent for most major companies; it’s only a matter of time before the boxes are gone altogether.

Well, not altogether, but they will become less of a focus when the next consoles hit. New consoles will have bigger hard drives and focus on promoting downloadable games and content even more so than now. This will also be a huge blow to stores like GameStop that thrive on used games sales, something publishers like EA have been trying to do for the past year or so.

Physical copies of games will continue to be available for a long time, but they will slowly start becoming less of the focus for developers and publishers. It would take some getting used to, and it is a future I personally do not want to see, but it’s also one I feel is inevitable. Maybe not in five years, or even ten, but it will happen sooner than some may realize. 

In opposition

Justin Last: I’m going to start strangely – I love Steam, XBLA, and PSN. I think they are great services, and I buy quite a bit from each of them. That being said, there’s a trade-off to be made. 

Things have to be dirt-cheap before I’ll buy them because once I do I’m stuck with them forever. There is no secondhand market for digital distribution purchases so I’m less likely to take a chance. No demo, no purchase has become my motto for PSN, and I’m sure I’ve missed some good games because of it, but that’s my $15, and after I hit “purchase” there’s no going back like there is when I buy a dud from Best Buy and trade it in to GS a week later.

Given the choice, people like to own things, and that makes sense. My books are never inaccessible due to battery failure, my disc-based games are never toyed with when Good Old Games pretends to close its doors, and I can sell or loan that physical thing to a friend. Maybe I’m in the minority, but I don’t want to live in a future where I can’t loan Batman: Arkham Asylum to my best friend..

We’ve weighed in. What do you think? Let us know in the comments.