OR, HOW I LEARNED TO STOP WORRYING AND LOVE STEAM
Used games are on their deathbed, and most gamers are not happy. Everywhere you can hear the death knell of used games, from whispers of used game restrictions on the next Xbox AND Playstation, to the increased success of digital media distribution via services like XBox Live, Steam, and Amazon.
Further, gamers are increasingly willing to accept severe and even game-breaking Digital Rights Management (DRM) to play a great game, as evidenced by strong sales of Bioshock and Diablo III. The widespread adoption of Steam signals the loss of the DRM wars for consumers. Sales figures don't lie.
Not to put too fine a point on it, but if a game is good enough, to hell with our personal values, we're going to buy it.
Software Piracy, DRM, and Dolla Dolla Bills, Y'all
For the most part console gamers have had the luxury of avoiding DRM - sort of - because they purchased their games at retail stores. You don't (usually) need DRM when there is a mechanical requirement to play a game, such as a cartridge or disc. This is great for developers, since you have some assurances that your game is less likely to be pirated on a console than on a computer. Even though digital distribution services have gained significant popularity, some estimates of PC game piracy are as high as 93% to 95%. That's probably a bit far-fetched, but consider that in 2011 Crysis 2 was downloaded approximately 3.9 million times. Granted, Crysis 2 is only about $10 today, but back in March 2011 when it was released it was $60, dropping to about $30 by Christmas. Assuming the lower of the two, a $30 sale is about $117mm in lost gross revenue to Gamestop, Crytek, and their distribution partners. Now, include CoD:MW3, Battlefield 3, Fifa 12, and Portal 2 - each of which had over three million downloads via Torrent themselves, and you hit a half-billion in lost revenue pretty fast. Now expand this to thousands of games over the past three decades, including console games that have since been ported to emulators, the Playstation discs that were copied, etc. and you get into multiple billions of dollars in lost revenue.
It is important to discuss piracy in the context of used games because it highlights the financial motivation to move to digital distribution. The incentives are there and the technology exists to enable developers and distributors to almost completely eliminate the viability of used games, but there is some hesitancy due to the probable backlash from gamers. Honestly, though, it doesn't matter: Pure digital distribution is coming. There is too much money involved for the industry to notmake the move.
Artax represents physical game distribution. Atreyu represents gamers. The Swamp represents the gaming industry.
What to expect
Arbitrary prognostication has its pitfalls, but we can make some logical conclusions based on existing industry rhetoric and sales numbers to prepare ourselves for the future.
Cheap storage and significantly greater internet adoption since the introduction of the current generation of platforms virtually assures at least the availability of retail titles both online and in stores in the next console generation, with brick and mortar outlets eventually going the way of Circuit City. Expect the next generation of consoles to have gigantic hard drives and additional "cloud" storage. An ambitious manufacturer might even go solid state (faster than traditional platter drives, but still more expensive). Expect titles like Call of Duty and Assassin's Creed to be available for download on next-gen consoles, as a result, and downloadable content, or "DLC," to go away in favor of the more marketing-friendly "expansion content."
This will certainly be a problem for many gamers living in areas with restricted or spotty internet access. It's also going to be very annoying for military personnel overseas. Downloading a multi-gigabyte file via a 56k connection - which many people still use - is just not feasible. But with more (many more) consumers gaining access to high speed internet connections (source) it becomes easier for developers and distributors to stomach the loss of sales to a percentage of its base with spotty internet in order to retain more control of that distribution, reduce opportunity loss from piracy, and reduce manufacturing costs for packaging, shipping, etc.
The industry will spin it in a positive light; at first it will be a convenience: Why go to Gamestop when you can order the game right now from your console with a credit card? Shortly thereafter games purchased in the store will require an online connection for "updates," though what it really means is authentication servers (e.g. Diablo 3, and some of this is already happening today). Finally, you'll get download exclusives, followed by the elimination of retail distribution entirely.
Will it happen overnight? No, it will happen over the course of many years, just as Steam and other online outlets have slowly taken over the PC gaming marketplace this past decade. And it's not all bad: Anyone who uses Steam regularly will tell you that there are also a host of conveniences to online distribution, not least of which is the actual delivery method of the game. You have online sales, instant tech support, community tools, contests, and occasionally special events. There's also fierce competition in online distribution right now, leading to some pretty amazing sales through Steam and Amazon, in particular.
All of this still isn't quite the same as reaching up on the shelf and dusting off that old copy of Super Mario Brothers 3 or, in my case, Frogger. You can't swing by your local store to get a discounted used title, either. But I firmly believe that it isinevitable. Just as the vast majority of consumers now purchase their music online and increasingly view their entertainment via streaming services like Hulu and Netflix, so too shall video games soon be delivered exclusively via the internet, eliminating the used game marketplace, and fattening the margins of developers and publishers.
Resistance is futile. Your life as it has been is over. From this time forward, you will download all game purchases.
Sources
Defective by Design
Gamespot News
Akamai State of the Internet
Ubisoft CEO claims 93-95 percent piracy rate on its PC games
Kotaku
Torrent Freak
Defective by Design
-Disclosure-
Opinions and speculation of and by Bozanimal are his own and not those of Gamespot.com or its affiliates. Bozanimal is not a Gamespot employee, and is not affiliated with any gaming companies in any way.
Several links within this article may lead to external sites. Neither Bozanimal nor host Gamespot.com or affiliates are responsible for the content of those sites.
1 Like I guess I'll just stop playing games if this happens.
Also, it seems logical now but it is guessing the future of an industry is very hard and has probably never been done 100% accurately. Something could change and then neither 'possibility' will become the reality.
peace.
1 Like I prefer digital distribution myself as I tend to download games through the internet anyway. Heck if your complaining online why we gotta use the internet to play games? Your already doing it already so why not?
2 Like ease of obtaining the product is readily apparent in digital distribution, whereas retail requires the consumer to purchase the game at the distributors location. it's obviously going to be the future because people are lazy and don't want to leave their homes, and besides, it's just a nice luxury to be able to get the hottest game immediately with just a trip to the digital marketplace. good topic man!
1 Like One of the main reasons why I whole heartily embraced the concept of online distribution of games was because of availability. I'm not the kind of person who buys games on launch day, I like to wait and save some money down the line. Problem is that it has occurred to me that once I wanted to buy a particular game on a store, I would find that the game is out of print, so either I find a used copy somewhere or be completely out of luck. Online distribution makes the game available for purchase anywhere at any time as long as I have an internet connection at hand, plus I can get that same or better discount than in the store. Another aspect of online distribution that gets overlooked is the environmental benefits to it. No more plastic gets use to print discs, and not a drop of fuel is burned to transport said discs around the world.
Also, Steam should learn a thing or two from GOG such as retrofitting older games to run on current OS and have all extra content such as music, art books, etc, included with a single purchase price.
1 Like Gotta agree with you here. I've been saying for a while now that everything is moving towards digital downloads. I also think TV will be done entirely online eventually. I mean the XBox has Hulu and Netflix along with music and social networking. It's only a matter of time. I might welcome that. I would pay much less than what I pay for DirecTV and have more on-demand options. I think we'll see a consolidation of media in one set-top box like an Xbox or Wii.
1 Like Pure digital distribution is short-sighted because at some point, people will realize the greatest inconvenience of digital products, lack of portability. Now unless these purported smart TVs become a reality where I can watch HDTV, surf the web, play video games, and order a sandwich, people will begin to resent the fact that they cannot do what they want, when they want, with the product they paid for.
Also, if I'm paying the same price for a digital product (that is purportedly cheaper to movr to market because of the elimiation of manufacturing and shipping costs) as a retail product, you are going to see the same backlash in the video game industry as the music industry saw when they switched from vinyl to CD (a format that was cheaper to manufacture) and doubled the price of the product. You can fool and take advantage of the consumer for a while, but when they figure things out and start talking amongst themselves, the consequences can be devastating. That's why today Apple is pretty much the end all and be all of digital music today.
1 Like @GEVDARG I'm not sure I follow you.
Let's say I use Steam. I can go to any computer anywhere in the world and log in to my Steam account, download any game from my library, and play it. Digital distribution allows superior portability to any prior medium, and it's only getting better. Soon you'll be able to log into any XBox and do the same: Log into your XBox Live! account, and play anything in your collection from a friend's house.
I don't understand your music analogy, either. Compact Discs are vastly superior to vinyl in terms of durability and portability (try playing a record in a moving vehicle!), and extremely close if not superior in terms of fidelity. And we didn't move from Vinyl to CDs, we moved from Vinyl to the 8-track, then cassettes, then CDs. The original move from vinyl to 8-track was due to the superiority of using 8-tracks on the go, despite the inferior sound. You could instantly access different sections of an album, play it in your car, carry it around, and it could take a beating. Ditto cassettes and CDs.
And now CDs are dying a slow death to the inferior-sounding MP3 (or AAC3) because of the smaller file size and greater portability. If anything, Apply is the be-all-end-all of music because they have a very tight grip on their digital distribution platform, have done an excellent job marketing music as inexpensive (by the track), and making it easy to buy on impulse, even though a full album will often cost as much as a CD. You can also Sync your library with the cloud, which is a huge convenience for many buyers.
In that regard, I would think that Apply has "won" due to their portability and ease of use, but I'm not sure how this applies to your discussion of pure digital distribution being short-sighted.
5 Like I think there will be some level of co-existence but I agree that boxed retail's time is somewhat limited, at least in the numbers that it's doing today. The idea of boxed collectibles I think is something that won't go away, but we may end up in a position where the only physical copy is the collectors edition and the standard one just says go download it and the collectors is more a bunch of stuff and a disk with a glorified .exe
1 Like Digital or physical,new or old,I'm buying less everyday because nowaday most games stink.And with this new digital companies tendency that worsen the situation, I would have to say in the future:When I use to play videogames....
2 Like @hitechgraphs Really? Many of my favorite games have come out in the past few years, and I've been gaming since Frogger.
Portal 2, Limbo, Braid, Team Fortress 2, Insanely Twisted Shadow Planet, and I've recently really been enjoying Super Monday Night Combat- there's been a lot to love. I wouldn't have played them if not for many a Steam sale, making most of them less than $2.50.
@Bozanimal @hitechgraphs I agree with top guy. Maybe I am just not feeling like gaming anymore but nothing is exciting now for me. 4 years ago all I did was game and now I don't give a heck. Oh well. I can't even buy a decent game with split screen that was made in this generation pretty much. I have live but it's not that fun compared to playing with people I know in the same room.
3 Like Aside from taking up less space, there is nothing good about downloadable games compared to retail games for the consumer. They cost the same or more to download then they do to buy in a store, there's usually awful DRM attached to them, and you can't trade them in. The day the games industry goes all digital will be a dark day for me.
2 Like @johnsteed7 That's what I thought until I lost my Authentication Code for Unreal Tournament 3. With Steam, I have a receipt of sale. I can re-download it anytime at any computer. You can't lose the box. You can't have the original become corrupted on the hard drive. It can't be stolen and, even if your account is hacked, you will almost inevitably get it back, especially if you have proper documentation.
Now, you know I agreed with you back in the days of Bioshock (http://www.gamespot.com/users/Bozanimal/show_blog_entry.php?topic_id=m-100-25123023), but DRM in the form of Steam authentication is a far cry from the game-breaking DRM of the old days.
1 Like There will always be some form of physical copy sold, unless prices for new digital games come down significantly. Or if there is a monthly subscription charge that lets you play all the games digitally. Otherwise there are going to be people like me that won't accept digital distribution. You never see the money you paid for the game again. I can't resell a digital copy or lend it to a friend. I am a hardcore gamer and if I can't do these two simple things then Ill be playing a lot more on my friends consoles - because I won't own one.
1 Like @moeman636 My point is the same as yours: You can't resell the game or lend it to a friend. Those are lost sales from the perspective of a developer. If anything, that's all the more incentive for them to require digital distribution to retail better control of their product. You have to look at it from their perspective, not ours, and they are a business.
Will you NOT buy New Game X because it's digital only? Maybe; but they'll make up for your loss by selling more copies to other gamers. Consider it this way:
------------------
There are five gamers. I buy a Rockstar game, and lend it to two of my friends, neither of whom buy a copy. Then I trade it in to Gamestop, and another gamer buys it. She then trades it in again to the last gamer.
To Rockstar, this is one sale. They get nothing from Gamestop on those two resales, or from my friends (who didn't buy anything).
Now if you and your friends all refuse to buy copies digitally, those are lost sales to Rockstar, but if the remaining two gamers DO buy a digital copy, Rockstar still comes out ahead versus having a physical copy that could be traded in.
Because digital distribution allows developers better control of their product, I truly believe Used Games days are limited, whether we like it or not.
1 Like @Bozanimal @moeman636 I still don't buy this argument. The secondhand market exists for practically every industry, why should games somehow be exempt? It just comes across as greedy.
1 Like @Vari3ty @moeman636 Greedy? Well, of course, if anything that's my point! I don't know of any non-profit game developers, publishers, or distributors. Don't confuse my explanation and acceptance of DRM - in this case via digital distribution - as an endorsement.
Honestly, I expect music and movies to follow in the digitally distributed footsteps of the video game industry. Already my movie collection has waned and my music collection's growth stymied due to my use of Netflix and Pandora. You cannot resell movies and music distributed by those sources, either, yet nobody is pitching a fit over the loss of the second-hand DVD market!
I could be wrong, but I still believe the profit motive is too great for hard copy distribution to persist for a prolonged period.
You can't use piracy as an example for being in favour of digital games, IMO digital piracy is easier than disc based piracy as you dont have to purchase discs, all three current gen consoles are hacked to play pirated digital games, not sure if you can do it on steam but you probably can.
Also if there is a death of used games then theres a death of casual gamers on low incomes who cant afford to pay full price titles. If they cant buy the games then they wont purchase the consoles so all industry sides lose out eventually
2 Like @mrmad2012 "You can't use piracy as an example for being in favour of digital games..."
Yes I can, yes I did, and yes I will. Developers are moving away from code books (super old-school) and on-disc DRM (like StarForce) in favor of online authentication for good reason: It is more secure and effective for them, as developers and distributors, against piracy.
As @Gryn89 said, where there's a will, there's a way. Piracy will still happen, but online authentication reduces its frequency dramatically. Even Windows - which you can certainly get illegally - uses online authentication. To some degree, it works.
Regarding your low-income gamers comment, it unfortunately doesn't matter. You're looking at it from the gamer's perspective: Those second-hand sales benefit the retailer and gamer only. Used Game sales are an Opportunity Cost for developers; digital sales will help bring that down and increase revenue.
Low-income gamers will just have to wait a few months more to play an anticipated game, or save up a bit for their games of choice. That shouldn't really be a big deal. Just look at the example I gave for Crysis 2, a major AAA release that went from over $60 to $10 in less than a year!
2 Like As long as you are required to pay for the games you want to play, piracy will still exist. it's on human nature yu cant go against it. As for download only, i have to disagree that you call the future, its the trend but not the future, i think it's more dangerous owning a digital copy of something when you can have a real copy. A HDD can be easily broken down by accident and an account hacked even more... Why should i buy a digital copy when its the same price of a physical one??? Whats the advantage of it if its the same price?? Its a comodity nothing more, but still I'd rather have something to collect at home, than have a HDD filled with dozens of games. I'm not just a gamer, i'm also a collector and a digital copy for me ain't no good for collecting....
1 Like @F0RS4K3N There are many arguments in favor of physical distribution, but there are many against, as well. For one: You can't lose your digital copy. It will always be associated with your account. If your computer dies, you can go back to Steam and still have access to your complete collection of games.
Then there is the support should you have difficulty accessing your game, the service integration for multiplayer and item trading, and continuous access to their social services so you can set up a game with your friend from a mobile device.
Also note that I can't play my original Wolfenstein 3D because it's on 5.25" floppy disks. Doh!
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2 Like @Gryn89 True: But at some point the difficulty of stealing is outweighed by both the amount of work required and the potential legal liabilities.
Back in the 90's piracy was rampant, difficult to track, and even more difficult to enforce. It has become much, much easier to track digital footprints and - at some point - I imagine there will be a reckoning not unlike the 2000 sharing clampdown by the music industry.
Then again, music is still heavily pirated, so who knows?
3 Like I'm pretty much a PC gamer anymore. Thanks to console makers' reluctance to include backward compatibility. At least with PC games you can download a free patch that tells the newer OSes how to read your old games. And, as a PC gamer, most of my purchases have been via GOG, Steam, Gamersgate, or Amazon...downloads.
All my Steam games allow offline play. If they didn't, I wouldn't have bought them. If Steam didn't have that option for some of their games, I wouldn't be using my account today.
Then, of course, there's GOG...DRM-free! I typically grab the GOG version, unless the Steam version is all there is available. Often, I've held out and waited for the GOG release -like with Trine and Torchlight. Gamersgate is another goodie; they only DRM at the publisher's request, with most of their games being DRM-free.
4 Like I agree that digital distribution is the likely future, however from a console perspective the pricing is going to have to be looked at. Currently I can download full retail versions of games like, however the pricing is on a par with a "hard copy" purchased from a store. That doesn't sit well with me at all. As you say there are reduced costs involved for the publisher to push the product digitally, there are no manufacturing or packaging costs, but the cost is still the same or in some instances more expensive than a shop bought copy - that just isn't attractive to me at the moment.
"Resistance is futile. Your life as it has been is over. From this time forward, you will download all game purchases."
Second hand market my friend. :)
1 Like I think you're right about how new releases next gen can probably be downloaded upon release. I was quite surprised when Nintendo released New Super Mario Bros. 2 on the 3DS E-shop. As an added incentive, they offered double the Club Nintendo coins for getting the download version as opposed to the retail physical copy.
1 Like Will come back and read this when I have some more time, but for now - loving the reference to Neverending Story. I loved that film when I was a kid!
1 Like 504 Bad Gateway: Let's just say this blog took a little more work than usual to post. I hope you enjoy it!
