Games to go

How is digital distribution changing the gaming retail industry?

While other new release download-to-own-product has retained its retail value, Battlefield 1943 is available for just $15 (£8), but DICE insist this is still a premium game. Do they think there’s a danger models like this could erode prices across the board? “That thought has crossed my mind, but I don’t think anyone can pull off such a product,” defends Liu. “DICE has been in a great position with this game, and offering a download only for just $15 is a unique opportunity for all gamers. We have a lower barrier to entry with this title, but kept most of the depth of a classic Battlefield game. I think we’ve set a new bar for what you can achieve in that segment, and I expect others to follow. There’s no excuse to only release a certain type of game just because they’re small and cheap. It’s possible to deliver a full shooter experience as well.”

Above:BitRaider founder and CEO, Royal O'Brien

The appeal is not just the ability to save space in stores, but also to offer instant sales on the game’s day of release, a proper back catalogue, 24-hour sales and instant price discounts – much in the way existing services do. It’s just the logical next step in how games are bought.

“It’s already been proven that if you make it difficult to get a product to the consumer, they will simply go find other means to get it,” says BitRaider’s O’Brien. “Digital distribution allows the gaming market to monetize their products faster and easier in many ways. It’s already been proven that sure, people can go download MP3s anywhere, but last time I checked, the iTunes Store was doing well for something that people could download from anywhere. Bottom line, people will buy online if you give them ability to do it, which means digital distribution is not going anywhere, any time soon.”

Above: Good Old Games, another of their rivals

“It’s a complex business to manage,” adds Metaboli’s Howes on why more traditional retailers haven’t just introduced a download service themselves. “You’ve got to bring together all of the content from all of the publishers. We work with 56 different publishers from whom we license content - that takes a lot of time and energy to manage. Also you need to aggregate technologies for the different types of technology: DRM technology and streaming technology to deliver this content over the internet and we tend to package it up so the user has a consistent experience. We’re specialists in the area so I think they’d rather use us than bring in their own people to manage this type of service. The investment is considerable and why we’ve been successful, is that we do it for lots and lots of people. So we can spread our costs across lots of different channel partners, whereas a single partner just couldn’t justify the investment at this point in time.”

Metaboli are in discussions with two or three retailers which could well launch in the next three to six months: “There are more of them now that are going to be launching download services,” says Howes. “I wouldn’t be surprised if all the top five had them within the next 12 months.”

Above: One of DICE's producers, Patrick Liu

“I think that’s the only way for them to survive,” adds Liu. “Holding on to the old as the music industry did for a very long time, and still does, will not work as technology moves forward.” Eventually we expect most games to be distributed digitally. Soon enough physical product will be treated as some sort of luxury (limited editions with nice big manuals anyone?), but we’re still a little way off that as DICE’s Liu concludes: “It will take another generation of gamers to reach that point. So when our kids grow up they will know nothing better than digital download. Just as physical media has progressed from floppy discs to USB drives, and downloads are just the next natural step.”

Jul 16, 2009

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