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The Internet Entertainment Games

The Downsides to Digital Distribution 371

The gaming industry's ongoing shift from physical media to direct downloads has made buying new titles much more convenient, and in some cases cheaper. However, as this article in The Escapist notes, there are downsides as well, such as an increased dependence on console makers and the inability to sell your used games. Quoting: "Microsoft and Sony might end up charging publishers an arm and a leg to enable game downloads, especially as they gain more and more control over distribution. Think about it: What if, 10 years from now, 50 percent of software sales for Microsoft's latest console come through Xbox Live? Or, in an even scarier scenario for consumers, what if there is no physical media drive at all, and everything goes through Xbox Live? Sony's marriage to the Blu-ray format ensures its continued support of game discs, but Microsoft has no such restrictions. They could cut console production costs and take control over the entire supply chain in one fell swoop. There would be zero room for publishers to negotiate anything in such a de facto monopoly. The perfect comparison is Wal-Mart. As the world's largest retailer, Wal-Mart is able to demand pretty much whatever it wants of suppliers because it grants access to such large numbers of consumers."
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The Downsides to Digital Distribution

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  • and simultaneously abandon all customers without high speed internet access. For the sake of a DVD/Bluray drive? It's not going to happen.
    • by tepples ( 727027 )

      and simultaneously abandon all customers without high speed internet access.

      Who can't get satellite Internet?

      • Re: (Score:2, Insightful)

        by viking099 ( 70446 )

        Who wants to pay $100+/mo for crappy speeds with spotty service and a 56kbps upload speed? I don't think you'll find too many people willing to shell out that kind of cash.

        What I could see is a one-time USB dongle or something that is shipped to you, which you authenticate over your internet connection, then download to your machine.

        After that, you just store the thumb drive somewhere, in case your machine dies, and there you go.

      • by jollyreaper ( 513215 ) on Wednesday July 29, 2009 @12:50PM (#28869951)

        Who can't get satellite Internet?

        North Korea. They're so poor and backwards, even electromagnetic waves don't propagate properly.

    • by mini me ( 132455 )

      Who doesn't have high speed internet access and is also interested in console gaming?

      • by tepples ( 727027 )

        Who doesn't have high speed internet access and is also interested in console gaming?

        Kids whose parents live in the country, for one.

      • by MooUK ( 905450 )

        People living in a situation where they don't have control over their internet connection?

        For example, someone living with their parents, or in shared accomodation.

      • Millions of people in the United States. Not everyone lives in a major city, you know...

  • nerds complaining about the world they created.
    • nerds complaining about the world they created.

      I know you are somewhat trolling, but the more I read /. the more it seems that everyone on here is rejecting technology than embracing it.

      There is a fear of digital distribution and cloud networks overall (even though I would support systems without DRM and ways to backup and encrypt own data).

      I think there is this pervasive fear that the world is leaving the tech geeks behind and none of them want to play along with where the world is going.

      Its like trying to

      • by Qzukk ( 229616 )

        the more it seems that everyone on here is rejecting technology than embracing it.

        We embrace plenty of technology. We also see how that technology can blow up in our face, so we choose not to just go ahead and rub our faces all over it like it was some kind of raw sewage container.

      • Technology != panacea. Often it creates as many problems (if not more) than it solves.

        It is like Homer Simpson once said - "Ah alcohol. The solution to and cause of all our problems."
        • Technology != panacea. Often it creates as many problems (if not more) than it solves.

          Well here is the problem...

          For every computer nerd who speaks out against a bad technology idea, there are 10 who are going to smile and go along with it for the PHB's money.

          Those NSA data collection and DRM schemes aren't building themeselves. People like you and me are giving up their morals and are helping build them.

          I personally do not think cloud computer or digital distribution is the problem with these systems but r

          • I think the real problem is out of the 10 who go along with it for the PHB's money, a few of them actually don't see any problems either. Or at the very least don't see the potential for abuse they are creating.
    • by armanox ( 826486 )
      Created perhaps, in control of no.
  • by Pluvius ( 734915 ) <pluvius3NO@SPAMgmail.com> on Wednesday July 29, 2009 @12:20PM (#28869353) Journal

    Or, in an even scarier scenario for consumers, what if there is no physical media drive at all, and everything goes through Xbox Live? Sony's marriage to the Blu-ray format ensures its continued support of game discs, but Microsoft has no such restrictions.

    That "something" being the handheld market. Sony is going to do pretty much exactly as this describes with the PSP (despite their "marriage" to UMD), so there's no need to make hypothetical arguments; we can simply see what happens there in a few years.

  • by yincrash ( 854885 ) on Wednesday July 29, 2009 @12:23PM (#28869407)
    microsoft and sony decide what games already are allowed to be produced. they can't charge too much because if they don't have enough good games, then no one will want the console.
  • by RobBebop ( 947356 ) on Wednesday July 29, 2009 @12:23PM (#28869409) Homepage Journal

    I declare: 2015 will be the year of the Linux video game console!

    With games like networked FreeCiv, custom content versions based on the open source Quake II engine, and Snake who needs the evil, proprietary XBox Live?

    On the other hand... for anybody who didn't realize that Microsoft *invested* $4-8 Billion on the original Xbox to claim the $40-80 Billion "home entertainment market" in the future... shame on you.

  • Comment removed (Score:3, Informative)

    by account_deleted ( 4530225 ) on Wednesday July 29, 2009 @12:23PM (#28869431)
    Comment removed based on user account deletion
    • I agree. I wouldn't say I'm eager to give up the ability to sell my games when I'm done with them, but if your prices come down to make up for that loss of value, then we can probably reach a deal.

      As a bit of an aside, the fact that game publishers/developers argue against selling used games has always seemed silly to me. I'm willing to bet that the majority of money that people get from selling old games gets put towards buying new games. The person who couldn't sell their old game wouldn't have as much mo

    • If Xbox3 is too annoying, people will just buy the PS4 or Wii2.

      And if all three are annoying, what video game platform will people buy to connect to the SDTV in the other room?

      Personally, I'm fine with digital download replacing media. It is better for the environment and more efficient.

      Is downloading more efficient even in areas that are too far from the nearest DSLAM and not served by a cable TV company?

    • Re: (Score:2, Insightful)

      by Gizzmonic ( 412910 )

      Personally, I'm fine with digital download replacing media. It is better for the environment and more efficient. I would expect the system to (a) let me sell my key to another person, and (b) let me re-download the data if I need to.

      (a) will never happen. With any of the console manufacturers, unless Gamestop decides to make a console, then maybe. (b) might if you're lucky, but think how many hours you will waste re-downloading games when your Xbox720 inevitably breaks.

      Another thing that digital downloads

  • Steam too (Score:5, Insightful)

    by EvanED ( 569694 ) <evaned@g[ ]l.com ['mai' in gap]> on Wednesday July 29, 2009 @12:24PM (#28869453)

    As someone who bought two copies of Portal (one standalone, then as part of the Orange Box) and got pissed at the Steam for not letting me give one of the copies away, I sympathize with this. I've already decided that I won't buy stuff on Steam any more unless (like for Portal 2 and HL Episode 3) there's no other source.

    • Re: (Score:2, Insightful)

      by slyrat ( 1143997 )
      Whereas on the other hand I find steam to be very helpful. I have used it to re-download games several times because of box switching / etc. It also is usually cheaper, has less hassle with discs, and easier to update too. I admit there isn't any kind of resale market because of this, but on the other hand there are lots of discount deals that steam does which end up being cheaper than most used copies would be. If I have to have drm on a pc game, which nowadays is usually a yes, I'd much prefer the flexibi
    • Re: (Score:3, Interesting)

      by The MAZZTer ( 911996 )

      Steam keeps a record of your purchase history, so your extra copy is not "lost". Valve will likely eventually extend the "gift games you already own" feature to any games you own two copies off in the future. Right now it's limited to HL2 and EP1 as part of the Orange Box package, and L4d as part of the L4D 4-pack package.

      I will admit I'm puzzled as to why they haven't already extended the feature.

  • by Brian Gordon ( 987471 ) on Wednesday July 29, 2009 @12:25PM (#28869465)

    There would be zero room for publishers to negotiate anything in such a de facto monopoly

    They're already at the mercy of the holder of the key for signing games. Unless they want their release restricted to homebrew / modchipped consoles, there would be no difference.

    • Unless they want their release restricted to homebrew / modchipped consoles, there would be no difference.

      Every PC running Windows is a potential "homebrew / modchipped console". All it needs is a VGA cable to an HDTV or a $40 adapter to an SDTV [sewelldirect.com].

    • by Pluvius ( 734915 )

      AFAIK, the console manufacturers cannot dictate anything but the quality and content of the game through the licensing process. They could dictate everything else including retail price if they had control of the only means of distribution, however.

      Rob

      • They can dictate other pieces by refusing to sign future discs from noncompliant publishers.
      • by tepples ( 727027 )

        AFAIK, the console manufacturers cannot dictate anything but the quality and content of the game through the licensing process.

        Console manufacturers can dictate what kind of office your business uses. They can dictate the platform on which your company publishes your first title: it has to be the PC. Source: Nintendo [warioworld.com]

      • They do take a cut of the money as a part of that process though, and still that is one of the things this article is freaking out about happening with digital distribution. There are no competitive pressures controlling what cut MS/Sony/Nintendo takes of the game cash now that won't still apply.
  • by basementman ( 1475159 ) on Wednesday July 29, 2009 @12:27PM (#28869491) Homepage

    Don't game companies still need approval from Microsoft to distribute games in physical media? If so, how would moving to a downloads change that? You still need the same approval you did before.

  • by br00tus ( 528477 ) on Wednesday July 29, 2009 @12:28PM (#28869521)
    Capitalism has a tendency towards monopoly. This was pointed out by Marx in the 19th century, and expanded upon by Lenin 95 years ago [marxists.org]. The Monthly Review crowd and others have written about this tendency in the modern day - nowadays finance capital is a big thing, but according to Marxist theory is very volatile. You can look at the markets nowadays, with Citigroup staying solvent only due to government subsidies to decide on the truth of this.

    Of course people can say Marxist theory is insane, but the predominant economic theory is that everything is fine, markets correct themselves and all of that nonsense. So what is really more off-the-wall, the Marxists or the Panglossian head-in-the-sand economists of today who say everything is fine? This is from someone who has seen the US economy stagnating since 2000 (other than some slight growth in the mid-decade with the real estate bubble, which is currently popping).

    • Capitalism has a tendency towards monopoly. This was pointed out by Marx in the 19th century, and expanded upon by Lenin

      Ah, pointed out by leading thinkers who advocated & implemented the government having a monopoly over EVERYTHING.

      Power tends to acquire more power. Better capitalistic power which tends to self-limit by still leaving people choices*, than governmental power which tends to literally kill the competition.

      (* - You don't HAVE to buy at Wal-Mart. You CAN get internet access from other sourc

    • by nine-times ( 778537 ) <nine.times@gmail.com> on Wednesday July 29, 2009 @12:43PM (#28869797) Homepage

      The problem with the Marxist/Capitalist debate is (IMO, of course) that both are more or less correct in assessing the weakness of the other system, but each overvalues its own strengths and refuses to acknowledge their own weaknesses.

      Advocates of each system essentially base their support on two assertions:

      1. The alternative is flawed and problematic.
      2. If you institute my favored system, everything will suddenly work perfectly and nothing will go wrong.

      The problem is in the second assertion, not the first.

      • I've always thought that the trouble with both systems is that they rely on altruistic people being in charge, but provide pathways for sociopaths to take the reigns and steer the ship into an iceburg. This is why Plato's Republic calls for Philosopher King's instead of natural born royalty or corruptible elected officials. Only when the leaders can prevent individuals from gaining too much power will either system work fine.

        Trouble is with Capitalism, though, that taking as much power as possible is t

    • but the predominant economic theory is that everything is fine, markets correct themselves and all of that nonsense.

      You are wrong. Markets do correct themselves.

      But the time constants in the Market's reaction is measured in years, decades, centuries and even millenia. Even something as stable as the feudal system that lasted 1000 years eventually collapsed under its own inefficiency.

      Second, when the market corrects itself it is not going to compensate the people who have been hurt. It will find new

    • by godrik ( 1287354 )

      I have seen a couple of people stating that Marxism was no better than Capitalism. I guess they are missing the point. The point is not to system which is better than Capitalism but to understand its weakness.

      I often say that Capitalism sucks despite we have nothing better. Understanding why a system is bad is the first step to develop a new one. I hope the US of A will understand that Capitalism sucks. Because they have some of the best economist in the world. And we need them to build something better.

      • I often say that Capitalism sucks despite we have nothing better. Understanding why a system is bad is the first step to develop a new one. I hope the US of A will understand that Capitalism sucks.

        My thoughts on it:

        The biggest problem with Capitalism is that it doesn't scale to the levels we're pushing it to (not unlike government).

        Capitalism works quite well on a microcosmic scale, where "customer goodwill" is good for more than just "will they tell their friends". As the area of effect gets bigger, the customers become faceless masses who are entirely disposable.

    • Capitalism only tends toward Monopoly because of Government intervention. Patents and Copyrights encourage Monopolies to form, remove those restrictions and a Monopoly is impossible.

    • Re: (Score:3, Insightful)

      by DaveGod ( 703167 )

      Capitalism has a tendency towards monopoly.

      ...and then to revert to competition.

      Take games consoles. Once upon a time there were several players, which were whittled down to Nintendo and Sega. Nintendo dominates, but Sega is still effective to prevent monopoly. Sony enters. Sony becomes dominant. Nintendo all but falls out. Sega falls out. Microsoft enters. Microsoft removes Sony's dominance. Nintendo re-enters. Sony is now in last place.

      The dominant firm has changed hands with every product cycle, and ev

  • Never (Score:4, Funny)

    by SilverHatHacker ( 1381259 ) on Wednesday July 29, 2009 @12:38PM (#28869713)
    Microsoft commandeer a market, forcing developers to use their proprietary tools and to cater only to their platform?
    Yeah, like that will ever happen...
  • ...the game console in question will suffer from lack of attractiveness.
    There is still the PC, with no such restrictions - anyone can program for it without paying huge license fees.

    • by tepples ( 727027 )

      There is still the PC, with no such restrictions

      PCs lack lockout-chip restrictions, but in practice, they do have a screen size restriction. There are three kinds of monitors used to play video games: HDTVs, SDTVs, and small PC monitors.

      HDTVs: These can display signals from a PC's VGA or DVI port, but not all of a publisher's audience has one yet. A study [engadgethd.com] found that two-thirds of living rooms still had CRT SDTVs.

      SDTVs: Unlike video game consoles, the PC platform does not have SDTV output as a standard feature. There is a PC-to-TV adapter [sewelldirect.com], but it's s

      • These days, my favorite IT mailorder shop (alternate.de) has a large selection of 22" models, typically in 16:10 screen format with 1680x1050 pixels resolution. The cheaper models are around 150 euros, and I guess most people who buy a new screen get something this size.

      • by vlm ( 69642 )

        There is a PC-to-TV adapter

        "a" adapter? As if there has only been one model and mfgr of VGA to TV adapter since VGA became popular circa 1990?

        Alternatively, I can't remember the last video card I owned that didn't have video out... Although I'm certain that cards like that do exist.

        I have PCs in my living room and rec room running mythtv, and the real problem is input devices. I can get a rechargeable RF wireless mouse that looks like a space aliens marital aid with a ten foot range assuming I unplug my wireless LAN and one hour b

  • by rehtonAesoohC ( 954490 ) on Wednesday July 29, 2009 @12:44PM (#28869827) Journal
    If the claims in the article are anywhere close to reality, then I wonder why they didn't consider the effect on the actual development of games.

    Think about companies like EA who rush timelines and overwork their employees already! Now all of a sudden they're presented with a situation where the digital media can be altered at any point by patches and upgrades, and they aren't limited to a "gold" copy of the game. Now, granted, many current games with CD's release patches to improve the flaws in the game, but imagine when all of a sudden greedy companies are given a license to release unfinished games? I could see a world where no one purchases new games for several months, just because it was released unpatched.
  • by psyklopz ( 412711 ) on Wednesday July 29, 2009 @12:47PM (#28869861)

    Digital distribution is fine, as long as these guarantees are in place:

    1) I can transfer my rights to the game to some 3rd party (ie, selling it on the 'used game market')
    2) I can play the game without it needing to 'phone home' (so I can play it offline, and I can play it even if the activation servers go away).
    3) I can play my game on any other device (eg, my wii breaks down and I buy a new one-- i should be able to play all my purchased games on the new one).
    4) If the next generation console is backwards-compatible, I can transfer all my old games onto it and play them there (again, hopefully this would work even if the old activation servers no longer exist).

    wrap it all up in drm if you want, but it needs to walk and talk like physical media, including all the freedoms (rights) i have now with my physical media.

  • meh (Score:5, Insightful)

    by jollyreaper ( 513215 ) on Wednesday July 29, 2009 @12:48PM (#28869881)

    Capitalism has a tendency towards monopoly. This was pointed out by Marx in the 19th century, and expanded upon by Lenin 95 years ago [marxists.org]. T

    I have a broader theory than that. Things tend towards shit over time. The longer the period of time, the greater the likelihood all will be shit. Finally that shit hits the fan, people get mad enough to do something about it, and they put together something that isn't shit; it might even be quite good. But then they relax and time goes on and things start going to shit again.

    Capitalism sucks. Marx and his buddies saw that, tried to come up with a better idea. It turned to shit. Capitalism has had a few reversals thanks to the threat of socialism/communism but now that the threat has gone away, things are sliding to shit again.

    Microsoft products suck. But some hippies and computer scientists tried coming up with a better idea and Microsoft said "Oh, shit." So they were able to actually reverse the shittification process of the 9x series and came up with Win2k. Brilliant. But then the slide towards shit resumed. Some people liked XP, some people hated it, but everyone hated Vista. W7, a reversal or a further slide down the shit chute? Only time will tell.

    So, to somehow get back on topic. Company makes a game machine. It's great. Company gets greedier and graspy and ends up alienating customers, turning to shit. Eventually people won't want to use their shitty products anymore and they go away. Atari exists only as a brand name used by another company. Sega is a shadow of its former self. Nintendo remains but people argue as to whether they've declined or are stronger than ever. Certainly they don't dominate the market as they did in the NES/SNES era. Sony came onto the scene out of nowhere with the PSX, reigned supreme with the PS2, and became an also-ran with the PS3.

    It's hard to say what the future will hold but I do think the console makers are lusting after digital distro. The only question is whether the market would bite. I thought Circuit City's Div-X would have been more popular than it was and was pleased when it failed. Will customers make the right choice here?

  • by Bat Country ( 829565 ) on Wednesday July 29, 2009 @12:48PM (#28869895) Homepage

    The visibility of their product is what sells it, not just the cheaper price point than Sony's offering or their "household name" factor.

    To most people, "Microsoft" is what you call Word/Outlook/Excel. "My Microsoft is broken," they'll tell you, then go off to drink a coffee with a name more complicated than "Word."

    If Microsoft wishes to retain credibility as a console manufacturer, they either need to do some colossally big marketing of the idea of independence from physical media or they run the risk of falling behind on game sales - the bread and butter of the console gaming market.

    Plus, come Christmas time, what is Grandma Mildred going to buy for the kids? A plastic card that they can use via the XBox's digital distribution system tied to mom and dad's credit card which the children or the parents would have to redeem for the nebulous concept of "Points" that the children can then decide how to distribute between the various XBLA offerings? Hell no, she's going to buy them "Wii Carnival Games" or some random racing or sports game for the PS3.

    This is not to say that it's impossible to escape from the concept of retail software, only that they need to come up with an effective marketing tool to get people to start thinking of gaming as something that happens on the Internet, not in the home on the box plugged into the TV.

    • As usual, I got ahead of myself... "they either need to do some colossally big marketing of the idea of independence"... or they need to retail a healthy retail presence.. "or they run the risk of falling behind".
  • by johnthorensen ( 539527 ) on Wednesday July 29, 2009 @12:50PM (#28869945)

    I've never been impressed with the concept of selling used games. I respect and think that that the right to do so is important, but given how incredibly crappy the return on one's investment is I've never even considered selling a game. Today's used video games are yesterday's baseball cards. I remember the exact same predatory purchasing behavior going on at my local mall in the 1980s. If it could happen without tarnishing our right to resell a game, I'd be more than happy to see this 'business' model fall apart.

    Due to the above, I think people shouldn't focus so much on the used game sales and instead consider the net benefit that *might* be had if the physical distribution model went away altogether. First off, no more disc-based DRM schemes. Secondly, buying direct has the *possibility* of driving down prices. Obviously, if Sony, MS, et al decided en masse to keep game prices high they could do so, but they would at least have more flexibility by not being beholden to the retailers. If there's one lesson to be learned from the last several hundred years of product distribution, it's that there's always a better deal to be had by skipping the middleman.

    If the publishers did decide to engage in price-fixing, there is a strong argument that could be brought against such behavior. Let's say that a game today sells for $50. Now, tomorrow the physical distribution model evaporates, we're all buying direct, and the publishers refuse to take advantage of the opportunity to undercut one another to gain a competitive advantage. This is obviously not free-market behavior, and the only question that would need to be asked is, "How can you claim to sell something for the same price as you did yesterday, when the distributor and retailer markup is gone?"

    The answer to that question, of course, would depend on how strong the gaming publisher lobby is...

    • Allowing the resale of your license for a digital-only game would provide a stop-gap against price fixing.

      Even if there is only one 'first party', they would still need to compete with the used market, which would regulate prices.

      Now, if we could only convince them to let us re-sell those games...

      • I hate replaying to my own posts...

        Although an interesting side effect is in play:

        the used market would have a limited supply of used games
        the first party would have an infinite supply.

        never saw that scenario in economics class...

      • It's probably instructive to look at which software publishers DO currently allow resale of their licenses. Mainly, it seems to be those selling expensive, niche software who need to convince a portion of their buyers that a portion of their investment can be recouped when it's time to upgrade or if the product doesn't work out. Unfortunately, a $50 or $60 game doesn't have nearly the psychological effect on its purchaser as a $2000 CAD package. Further, given that most games end up in the hands of peopl

    • At the end of the day, you decide if a game's entertainment value is worth the price. Whether you physically have it or not.

      If you pay for cable TV, or going to a movie at the theater, you pay for the experience. Then you are done. You can't sell that experience as "used". What's so different about a game?

      So, the only quibble about not being able to resell a game is whether it was overpriced to begin with. If so, don't buy it, just as you wouldn't buy a movie ticket to a movie that you heard sucks...
  • Its amazing to me how people correctly identify and even moan about artificial functional limitations like DRM or vendor lock-in, yet go right ahead and buy the products that implement it anyway.

    The manufacturers will only continue to make such abusive products for exactly as long as people positively reinforce them by spending their hard-earned cash on them.

    I vow to never buy an Iphone, a Kindle, an XBox, Windows 7 or any other product that artificially limits their owner in order to enforce vendor-lockin

    • I vow to never buy an Iphone, a Kindle, an XBox, Windows 7 or any other product that artificially limits their owner in order to enforce vendor-lockin or DRM. I do my homework before any big purchase. Its often really not that hard to find alternatives that do just as good a job but dont implement mechanisms that screw you over.

      I'll give you the iphone, Kindle, and Windows 7.. but what did you find as an alternative to the Xbox? all of the consoles do the same thing, and the PC is not an alternative.

  • I take issue with this quote: "...but Microsoft has no such restrictions. They could cut console production costs and take control over the entire supply chain in one fell swoop. There would be zero room for publishers to negotiate anything in such a de facto monopoly. The perfect comparison is Wal-Mart. As the world's largest retailer, Wal-Mart is able to demand pretty much whatever it wants of suppliers because it grants access to such large numbers of consumers."

    It is quite true that Wal-Mart takes cont

  • Downloading Game:

    |====--------------- 21% /|
    ETA: 6 hours 27 minutes

  • I don't know how other people feel, but for me, there's no way I'll be buying the next full size game via a digital download (think Fallout 4), unless it is MUCH, MUCH cheaper. There are too many risks to me:

    - What if my HD dies?
    - What if the game was not so great and I want to resell it when I'm done.
    - I can't swap and share with friends.
    - what if it won't transfer to the Xbox720 (or whatever).
    - What if my account is banned for legit or non-legit reasons?

    Since I now take on these risks by buying a digital-

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