The Digital Distribution of Content, or: How we cut out the middle man and learned to love it.
Dragging our lazy butts to the store on release day to pick up your latest wanton desire. Waiting in line, with other sweaty nerds, digging through your wallet trying to find your pre-order slip from 4 months ago. You get to the counter, produce your crumpled up slip, only to be informed by the snide game clerk that your latest adventure has been delayed. Usually due to manufacturing delays, shipping errors, or some other disappointing reason.
Now imagine waking up on release day, turning on your console or PC and downloading the latest release straight to your machine. No more lines, pre-sale slips, Holier than thou clerks with their nose in the air. You wouldn’t even have to get out of your Yugioh pajamas.
It’s a thought that’s not too far fetched, and it will be here sooner than you think. On the PC, downloading the latest digital chapter in an ongoing saga, or taking on the newest MMO expansion is an everyday occurrence. The Xbox 360 already offers you the ability to download demos, in game items, trailers, and Xbox Live Arcade games. The Nintendo Revolution will have similar capabilities allowing access to its vast library of titles, and Sony recent announced its network allowing PS1 games direct from your PS3 enabled hard drive.
Selling games direct to the consumer is just what game companies are willing to do to cut down on production costs (no box, no instruction manual, no disc), and shipping costs. More importantly it cuts out the middle man. Several middle men really. No more production facilities to press the discs and print the manuals. No more major shipping companies to deal with. But the major middle man that gets the proverbial boot is the retailer.
While it’s true that game retailers don’t make a bundle off of new software sales, virtual product removes to ability to later re-sell said product as used. Not only does the retailer lose out profit on the sale of the new, but on the vital used sale that fuels the game retail industry. As much as game publishers rely on retailers like GameStop, EB, and Game Crazy, to promote new games and create excitement for their product, they lose crazy money on the used. If you were to buy a used PS2, a used memory card, and nothing but used games, game publishers would not see one red cent from your purchase. Every year the margin at which publishers make a profits declines. No wonder there are rumors about that the PS3 won’t play rented, used, or borrowed games.
So, how does this affect you as the consumer? In addition to easier access to new content having to leave the comforts of home, it would provide more convenience. Having access to your game collection from your hard drive, you would never have to worry about scratching your discs again. Forget about losing games around the house, they would all be available at the touch of a button. The possibility of lower game prices could be alluring to someone who doesn’t care about packaging but just wants to play their game now.
What about a return on your investment though? With your physical games you could always trade them in, albeit at a loss. Yet they still retained some value. Most of us have made an un-wise decision on some crap game, only to quickly turn it around into trade-credit or even cash. What about the collectors out there? Those who savor their massive bookshelves filled with gaming memories, archiving their past journeys.
Some long for the perfect box and instruction manual, which from time to time will actually increase the collector price of a select title. Maybe these people are in the minority?
If getting your latest gaming fix direct becomes the norm, it could change our industry on more than one front. Security would be increased and thwarting game pirates might become easier. Major company’s business models would change. Smaller developers and publishers that have relied on other larger competitors to get their product released (i.e., Ubisoft for Capcom, EA for Square) could globally distribute it themselves. The lack of huge distribution expenses would allow developers to take more creative risks. As a gamer and a consumer, we would all benefit.
New technology and consumers buying trends tend to make lasting changes on our industry. Remember that arcades were once in abundance. Where are they now? With broadband becoming cheaper and more available, computers and consoles becoming more powerful, and storage space getting bigger, things are going to change. Who would have thought over 5 million of us would pay over $15 a month ($180 a year!!!) just to play one game?
It’s not going to happen over night, but its well on its way. And not everyone is going to adopt this way of life right away. But getting the latest copy of WOW or Half-Life while sitting on my couch in my underwear, where do I sign up?
