I'm sitting at school right now waiting for a lecture with David Hellman to start. David is the guy who did the art for Braid. He's supposed to be pretty cool. I can't wait to meet him. I can't imagine what would have happened if Downloadable games had never taken on.
Recently there were some blogs written saying that download-only games are essentially the devil. According to these people, owning a physical copy of a game is imperative to their enjoyment of the game. Personally, I strongly disagree. These comments are made by people who obviously know nothing about game development. I find it humorous that the same people who complain about downloadable games also complain about how much the industry is becoming like the rest of the entertainment industry- basically a couple big companies run by suits who don't know or care a thing about the content they produce. What these people don't understand is that the very reason the industry is headed this way is because of the retail market. In the 90's more and more games were being pushed on store shelves. Retailers started restricting shelf space for the smaller companies, and removing games from shelves if they weren't a huge hit after the first couple of weeks. Of course, these smaller companies couldn't afford huge marketing campaigns, and most of their sales traditionally came after the first month, as more and more people recommended the games to their friends. Because of the limited retail space, though, these games were usually gone from store shelves by the time that occurred. So dozens of companies either went under or were forced to join forces with bigger publishers. The retail market basically destroyed the cottage industry of gaming.
As time went on the price of designing a game rose. The companies that could afford to put a game on shelves in the late 90's saw their profits plummet in the new generation. Today, independent development is all but gone. Making a retail release costs tens of millions of dollars, and a single failure usually leads to the company going bankrupt. The retail market has become cut throat. Publishers worried about their bottom line force developers to release games before they are ready, and it is becoming more and more difficult to squash bugs in games that contain millions of lines of code.
In the past five years, though, hope has come back to the independent companies. Downloadable games can circumvent the traditional retail market. Downloadable games have a potentially infinite shelf life. They don't have to compete with big budget games for shelf space and they don't have to have multi-million dollar marketing campaigns. Downloadable games have lead to a resurgence of grass roots development and have seen the creation of numerous high quality innovative titles.
I understand the concern that having games be download-only will eventually lead to higher prices and less competition, but the exact opposite is actually true. The production budget of a game is usually around $30 million for a AAA title. Then you have $5 million for packaging and $10 million for marketing. If your game is downloadable you don't have to have the $5 million packaging cost, and you can afford a lower marketing budget because your game wont be jostling for space in a store with countless other games. In a downloadable world, all games have equal shelf space. So prices for games can drop, maybe even back down to $50. In addition we will see more titles, and more risky and innovative titles. Remember that right now it is important for publishers to see most of their profits in the first couple of months or else used game sales will start eating into their bottom line. Without used game sales publishers can take bigger risks knowing that they will be able to recuperate their costs for a much longer period of time.
Also, smaller publishers, who before couldn't make a mark in the highly competitive retail market will now have a higher chance of making a profit. This will lead to more publishers, more developers, and more and better games. Downloadable content really is in the best interest of every designer, and every consumer who wants more and more innovative products without seeing the prices of games rise next generation to $70 or more.
I wish that we could have the best of both worlds, and get all the good games for a low price and still get a disc to go with it, but those times are gone. For the industry to move forward, and for companies to make a profit, we are going to see download-only consoles next generation. And I have a feeling it will be good for everyone.