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Digital Distribution Numbers Speak To Health of PC Game Industry 192

Posted by Soulskill from the i-demand-a-recount dept.
An anonymous reader writes with this quote from PC Authority: "Over the years many voices have declared PC gaming dead. We have seen developers abandon the platform for consoles, citing piracy as the cause. Game stores have slowly relegated PC games from prime shelf position to one tucked away in the back corner — even Microsoft dumped AAA PC game developers from the company. It seems, though, that the demise of the PC as a games platform has been exaggerated, because until very recently sales data ignored digital distribution, with the latest data released by US company NPD revealing that 48% of PC unit sales in the US in 2009 were digital. That translates to 21.3 million games downloaded in the US. Interestingly, although 48% of games were sold online, it only worked out as 36% of the revenue. This highlights the fact that it isn't just convenience that has PC gamers shopping online; it is also that games are generally cheaper than in stores."
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Digital Distribution Numbers Speak To Health of PC Game Industry More

Digital Distribution Numbers Speak To Health of PC Game Industry

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  • Of course. (Score:5, Funny)

    by bbqsrc ( 1441981 ) on Friday July 23, 2010 @02:21AM (#33000346) Homepage
    Who would have thought $99 wasn't due to the cost of packaging? The eyes, how they roll!

  • History repeats itself (Score:5, Insightful)

    by zr-rifle ( 677585 ) <zedr@ze[ ]com ['dr.' in gap]> on Friday July 23, 2010 @02:31AM (#33000372) Homepage
    The demise of the PC has been called for for at least 20 years now. I remember similar headlines in the early nineties, claiming that home computer gaming industry would be beaten to pulp by japanese consoles like the Sega Genesis or the Super Famicom, mainly because it would be impossible to pirate a cartridge.

    Nowadays, we have a massive user base connected to a cheap digital distribution network, the Internet, with no vendor lock on. You need the right technology and strong commitment to take advantage of such a powerful platform: that's what Valve did with Steam and, seven years later, it's still a great success.

    • Re:History repeats itself (Score:5, Insightful)

      by SharpFang ( 651121 ) on Friday July 23, 2010 @02:43AM (#33000444) Homepage Journal

      The idea that better protection means guaranteed market dominance is inherently flawed.

      People quite often choose a platform strictly for its being hackable, for its flawed protection scheme. And they will buy some games while pirating more others, generating some revenue for the flawed-protection market and none for the perfect-protection one. The other will get much better revenue per customer, but much less customers. And of course they will never get the idea just WHY does their console sell worse?

  • In Other News... (Score:3, Informative)

    by Inschato ( 1350323 ) on Friday July 23, 2010 @02:32AM (#33000376)
    Software box companies continue to dislike digital distribution, oil companies lobby away from nuclear power, and the middle east is still a warzone.

    • Au contraire (Score:4, Insightful)

      by Moraelin ( 679338 ) on Friday July 23, 2010 @05:33AM (#33001182) Journal

      I don't think any publisher ever hated the idea of digital distribution (if only it could be made pirate-proof enough for their taste.)

      See, ever since the 90's or so, most of the profit has been made by the retailers. Those make money both from the few games that are a success, and from the complete flops. Even games like Daikatana or Aiken's Artefact (which got great reviews, but IIRC sold a total of 800 copies and nobody knowns why) actually made a bunch of retailers a bunch of money.

      See, some of us learned a 17'th century version of capitalism (which is also the version in the game called Capitalism) where the merchant buys a barrel of wine in France for price X and tries to sell it in England for 10% more. (Or 50% or whatever.) And if it doesn't work, hey, the producer got his money anyway. Most of retail in today's post-scarcity economy doesn't work that way. Producing stuff is easy, selling it is hard, and basically as a producer you pay the retailers for shelf space to even carry your product at all. If you made an Aiken's Artefact and sold 800 copies total, congrats, you still pay all those retailers to have it on the shelves.

      Worse yet, basically the retailers know how important they are and often get to directly or indirectly got to set the rules for you.

      The most trivial example is the current brouhaha over ESRB ratings, which exists because of one single retailer: Wal-Mart. Wal-Mart doesn't carry Adults Only game, 'cause god forbid someone may think that means porn, and that would ruin their BS corporate image. Dumbly enough it's also the biggest retailer. Which left the industry in the pickle of simultaneously arguing (A) not all games are for kids, so fuck off, we can make a game with tits and gutting people like sardines because it's for adults, (B) but this particular set of tits and gutted people is good for 17 years old (or sometimes even 13) because otherwise Wal-Mart won't carry it and we'd, like, not make as much money. (And of course making money overrides and moral considerations. What are you, some kinda commie?)

      But, heck, even the E3 exists only because at some point the industry figured out they need a way to woo the retailers. That's right. It never was meant to be a place where nerds get their photos taken with booth-babes, except as a further way to show the retailers "look how many people are interested in our next game."

      But generally, you have an industry which for a long while has been squeezed by the balls by the retailers. It had to keep brown-nosing them and paying them for the privilege.

      I believe that most publishers would have sold their soul to the devil to get out of that, not just tried digital distribution.

      Of course, it also had to be enough of a market share, and give some reassurance that it won't get pirated right off your own servers. Piracy, now _that's_ a bigger scare than the retailers.

  • Im buying solely online. (Score:4, Informative)

    by unity100 ( 970058 ) on Friday July 23, 2010 @02:33AM (#33000386) Homepage Journal
    digital download. permanent. always there. nothing less.

    gamersgate.com works great. i have a hoard of games there. no client, no strings attached, you download, install, play. then you may delete the game. if you later on want to play it again, you just download it again. no client, no strings attached, dl, install, play. rinse and repeat. all games permanently stay in your account as accessible.

    also very cheap. they make huge sales. apparently online distributors can afford to sell prime time titles from $3 (with loyalty discount - depends on member status, it hits in between $3-10 for prime games).

    what this has over steam is, it doesnt need a client, hence no mods etc will have issues, and difference with direct2drive is, gamersgate is much cheaper.

    as you see, i counted 3 major online digital distributors... didnt even need to mention countless smaller ones. so, digital downloads can be said to come at last.

    • Re:Im buying solely online. (Score:4, Insightful)

      by IBBoard ( 1128019 ) on Friday July 23, 2010 @02:48AM (#33000480) Homepage

      digital download. permanent. always there. nothing less.

      Until it is DRMed by a Steam-like system, the owner vanishes and your game is gone. Granted, some boxed games these days have bad DRM (EA), but the old-school copy protection is as good as not existing. I've got 15 year old games I can still play. I doubt the same would be true of most modern digital downloads in 15 years.

      That said, there are some sensible digital download sites (gog.com and, from the sounds of it, gamersgate.com) that do give you the discount and the freedom/fair use.

      • they arent drmed. majority of the titles. even in drmed ones i have had no issues, their drms are rather mild compared to what ea, ubisoft tries to push. of course these brand's titles are still drmed as their originals.

        • Re: (Score:3, Insightful)

          by IBBoard ( 1128019 )

          You've not had any issues...yet. That's the biggest problem of DRM - people don't have problems at the moment and so assume that all will be rosy in the future. Granted, most media-based 'copy-protection' DRM is trivial to defeat, but it's the phone-home ones that are especially likely to bite you later.

          • The only games I've found on Steam that have any DRM are Source-based games, in that you can't run them without running Steam (though you can run them in offline mode). Everything else can just be launched from the .exe like normal, all Steam provides is a Library system (like Media players do for music and video)

            Hell, some games you can buy WONT run from Steam, especially if they have a launcher programme that needs admin rights (like Fallen Earth or APB)

            • Re: (Score:2)

              by Skuto ( 171945 )

              >Everything else can just be launched from the .exe like normal, all Steam provides is a Library system (like Media players do for music and
              >video)

              The .exes are still wrapped in Steam DRM. It will be obvious if you try to apply patches. Offline mode stops working if Steam is down >30 days.

            • Actually, the Source based games have the LEAST offensive DRM. Almost everything else I have bought on Steam has more restrictive DRM. Bioshock 2, while a great game, pissed me off that I had to have a microsoft gamer's account to save games, and I am FORCED to log in each time, or I can't save game. The others had serials that I had to copy/paste from the steam client, and register online. Source games, on the other hand, simply work. Then again, Gabe (owner of Steam) has made it clear that piracy is

      • Re: (Score:2)

        by dave420 ( 699308 )
        Gabe Newell, the CEO of Valve, said that in the event of the company going bust, they'd disable authentication (which they have apparently successfully tested), allowing people to play the games without Valve's servers being there.

        • Gabe Newell, the CEO of Valve, said that in the event of the company going bust, they'd disable authentication (which they have apparently successfully tested), allowing people to play the games without Valve's servers being there.

          They might be able to do this for Valve (single player) games, but I doubt other publishers will let it slide for their stuff.

          • Not only that but it assumes that they get a chance and have the inclination at the time and, possibly, that the gamer goes online in the right time frame. If not with the last point then how does a system that *has* to authenticate online know that it now doesn't need to? It can't go "oh well, no server, let them play" because that'd mean you could game without authenticating now, so it needs something to tell it that the lack of server isn't a blocker.

    • I agree, Steam is not the best system for getting digital games, but I'm one of the few who prefer it FOR the client. The way its built lets you socially network with gamers you know personally or ones you just meet rather easily. Great Matchmaking system, Great chat tools, achievements, etc. Digital Distribution plays its part but its not the selling point of Steam for Me. Because as you've stated, there are lots of digital distributors out there, you just have to find the one that works for you.

  • We've know this since the 80's (Score:2, Funny)

    by Anonymous Coward

    Marty McFly: [showing the two boys how to play the shoot 'em up video game] I'll show you, kid. I'm a crack shot at this.
    [shoots a perfect score with the electronic gun]
    Video Game Boy #1: You mean you have to use your hands?
    Video Game Boy #2: That's like a baby's toy!

  • So could anyone give the adjusted graph of market distribution, consoles vs PC?

  • PC's will always be a popular platform (Score:3)

    by pinkushun ( 1467193 ) on Friday July 23, 2010 @02:38AM (#33000420) Journal

    Despite the curve involved to maintain, it's highly customizable, and handles a multitude of tasks and games. You can run emulators for different platforms, network PC's together (without needing an online gaming subscription), and hack someone's port... until quantum computers come out, that is.

  • Old games can still be played on today's pc's (starcraft comes to mind). If you bought an older game for the previous generations of gaming consoles, it will not probably play on the latest generation of consoles.

    I still buy pc games that I don't have time to play today in the expectation that I will be able to play them in the future when I have more time. That said, I am buying almost exclusively stand-alone games that don't need to connect to a server with thousands of other players.

    • Comment removed based on user account deletion

      • "It does vary from title to title. Starcraft is obviously well written but it does beg the question as to whether or not it would be worth Blizzard updating the engine a little so it can support higher screen resolutions - although I already own the game and the expansion, I would certainly pay, say. £5-£10 for an updated version that did this."

        They've said they won't, but it's going to be relatively trivial to make a Starcraft 1 mod for Starcraft 2 so I suspect someone will do that for you shor

      • Old games can still be played on today's pc's (starcraft comes to mind).

        It does vary from title to title. Starcraft is obviously well written but it does beg the question as to whether or not it would be worth Blizzard updating the engine a little so it can support higher screen resolutions - although I already own the game and the expansion, I would certainly pay, say. £5-£10 for an updated version that did this.

        Playing StarCraft on Windows Vista/7 requires you to turn on a bunch of compatibili

        • Re: (Score:2)

          by TheLink ( 130905 )
          > the main menu to look like rainbow-colored puke.
          > It also requires you to run it as Administrator to play online, including a UAC prompt if you didn't disable them.

          Huh, did it turn into malware in recent versions? Why should a game nowadays need admin rights to play?

          I can understand needing admin rights if you are going to install it for all users on the computer. But if you aren't doing that, I see no good reason.

    • Why wouldn't you just wait until you have time to play the game before buying it? Chances are it will be cheaper in a year or two.

  • For how long after release? (Score:3, Insightful)

    by Beardydog ( 716221 ) on Friday July 23, 2010 @02:47AM (#33000472)
    Borderlands:
    Amazon.com from a shifty third-party seller - $28 ( before shipping )
    Steam - $30
    Onlive, which charges you $5 per month AND eats your games when you quit, $40, if I recall correctly.

    Mind=Blown

    • Re: (Score:2)

      by aj50 ( 789101 )

      It varies hugely from game to game.

      Borderlands was £20 on shop.to at release while it was £27 on Steam.

      Digital stores only tend to be cheaper when games are on sale or when a game has mostly sold out at physical retailers.

      This is what happens when you let publishers dictate prices.

      • That's funny, when borderlands came out, i got it off steam for $30. Just checked steam again, and yup, it's $79.99, It's obvious that they are charging different amounts for different countries now as well. (in australia for reference) It's cheaper in EB games down at the local mall (even when not on special). go figure..

  • Breaking news: People like cheap stuff! (Score:3, Insightful)

    by IBBoard ( 1128019 ) on Friday July 23, 2010 @02:51AM (#33000492) Homepage

    This highlights the fact that it isn't just convenience that has PC gamers shopping online; it is also that games are generally cheaper than in stores.

    Who'da thunked it - if people can get a game cheaper and quicker without leaving their house then they will! Next thing you know they'll be telling us that people go shopping in sales...

  • the PC will never really die as a games platform (Score:3, Interesting)

    by johnhp ( 1807490 ) on Friday July 23, 2010 @02:53AM (#33000504)
    I know I could be wrong, but I think there's almost no chance that the PC will ever die as a gaming platform. The reason it won't die is the console + TV and PC + monitor distinction will become less defined over the years. They're not that different conceptually as it is.

    There was another story on Slashdot recently about centralizing graphics processing into a single graphics server per household, with the output from that server being displayed on client devices. Once you reach that point, consoles and PCs, monitors and TVs, all become the same devices.

    • What define the consoles now, is that the console games hare created for people playing in a coach, with a pad on the hand. this sets limits and expectations. Then, after that, you have the effects of the owner of the console, setting rules, and maybe his idea of quality.

      The PC is defined by the high and medium graphic cards, memory availability, mouse and keyboard. And people use it on a desktop.

      This may change on the future,but is like that today.

  • Low(er) Prices + Convenience = no-brainer (Score:4, Insightful)

    by TheMadScot ( 1835772 ) on Friday July 23, 2010 @03:07AM (#33000562) Homepage

    Most of my game catalogue is on Steam these days

    I remember when I signed up for the Steam service and paid for my first game - it was Half-Life 2, naturally

    At the time, I thought it vastly different to the conventional model (and psychological security) of buying your games on CD / DVD at retail. I actually paused before committing to the order.... weighing up the pros and cons of online only distribution when I could just wander down to the store instead

    Fast forward to today and, given the choice, I'll elect to buy a game via Steam over any other method. No expanding collection of physical media, no waiting in queues at retail stores where pushy assistants are trying to sell me wares I don't want and - one of my favourite points - no laborious installation processes and/or the need for a disc to be present in the drive to play the game.

    I haven't even touched on the low price aspect of Steam which, except for some AAA new releases, sees software available for quite a bit less than in retail stores. I don't think I'm alone in seeing single games or multi-title packs priced at what could be said to be impulse buy pricing.

    One thing I would like to know is how the revenue from a purchase via Steam is divided up. Knowing how small a percentage goes to the developer / publisher from conventional sales, I wonder how platforms such as Steam fare by comparison.

    • Re: (Score:2)

      by Bert64 ( 520050 )

      Piracy has given you all that convenience for many years, while also giving you no DRM so no risk the game will become unplayable when the distributor decides to stop maintaining drm servers.

      • Re:Low(er) Prices + Convenience = no-brainer (Score:4, Interesting)

        by Skuto ( 171945 ) on Friday July 23, 2010 @04:03AM (#33000790) Homepage

        Piracy

        1) Hunt for suitable p2p client that isn't taken down or adware infested yet
        2) Hunt for suitable download that is not a translated version or fake and has a proper crack
        3) Wait hours to leech from people with unreliable connections
        4) Start over again when an important patch appears
        5) Get trojans off the PC that came with the crack

        Digital sale

        1) Shell out $$$
        2) Download at line speed
        3) Play (if Steam is not overloaded)

        I admit, this is hearsay experience. I've obviously never pirated a game, that would be illegal.

    • Re: (Score:3, Informative)

      by Skuto ( 171945 )

      >I haven't even touched on the low price aspect of Steam which, except for some AAA new releases, sees software available for quite a bit less than in retail stores.
      >I don't think I'm alone in seeing single games or multi-title packs priced at what could be said to be impulse buy pricing.

      Only if you're in the USA. In Europe, Steam games are ludicrously expensive compaired to retail.

      That said, the convience is huge. So if there are sales (which undo most of the price differential), I'm buying.

    • Re: (Score:3, Insightful)

      by RogueyWon ( 735973 ) *

      I'm in a similar position. I own pretty much every gaming platform around, with the exception of the new revisions of the handhelds (the DSi and PSP Go), and when there's a multi-platform game I want, I generally look at a number of factors before deciding which platform I go for. But if I go for the PC (or if the game is PC-exclusive), then I want to know that I can get it on Steam.

      Why?

      First reason (and one that applies to other download services) - I don't need to put any CD/DVD/Blu-Ray in my machine to f

      • Comment removed (Score:4, Insightful)

        by account_deleted ( 4530225 ) on Friday July 23, 2010 @05:02AM (#33001080)
        Comment removed based on user account deletion

      • Don't underestimate the ability to install your Steam games on different machines.

        I have different parts of my Steam library installed on my real computer, the XP VM I keep around for old games, and my laptop.

        The catch is that I can only be logged on to one of them at a time.

      • Re: (Score:2)

        by SpeZek ( 970136 )

        I have 3x 500GB drives in my desktop and it irritates the hell out of me that Steam games always have to fit onto one of those drives.

        Why not make a partition that spans the three drives and stick Steam in there?

  • Valve Financials (Score:4, Insightful)

    by DMalic ( 1118167 ) on Friday July 23, 2010 @03:08AM (#33000572)
    Does anyone have reasonably current figures for Valve's revenue and income? A 2005 Forbes story claimed that Valve had an income of 70 million with an operating profit of 55 million. Other sources say that Gabe never accepted venture capital funding and bought out the company's cofounder... Given the relatively few number of employees, Gabe must be loaded.

  • The only people who want PC gaming dead.. (Score:3, Informative)

    by Anonymous Coward on Friday July 23, 2010 @03:10AM (#33000578)

    is the industry itself.

    All the reasons that it's "dying" are reasons the big players make. The pc is open, anyone can make a game, and don't need publishers. Publishers hate this. Much how the RIAA hates P2P and the internet in general because Artists can just bypass their robber baron horseshit.

    1, Piracy. aka, "we dont control the hardware and software, and cannot fully exploit the people who buy our crap"
    2, Forced obsolescence. Many big companies are trying to make PC games a second rate citizen, Microsoft gives bigger perks to those who develop games using the "games for windows" moniker, which essentially makes them develop it for the 360 first. The big development houses are pushing for consoles to make console makers happy.
    3, see number one

  • Comment removed (Score:5, Interesting)

    by account_deleted ( 4530225 ) on Friday July 23, 2010 @03:31AM (#33000642)
    Comment removed based on user account deletion

    • Re: (Score:2)

      by Skuto ( 171945 )

      >1. PC and graphics hardware development is slowing down for desktop gaming PCs & focus moving to lower-powered netbooks & portable devices. Presumably
      >people still want to play games on those devices which means smaller & less complicated games - one reason for the success of selling older titles online

      This is a good point. My main system right now is a laptop instead of a desktop. I understand this is a common transition. Laptops have worse video hardware than desktops, even the high end

    • Re: (Score:2)

      by DingerX ( 847589 )
      It's more complex than that:
      1. Games are getting simpler because the hardware is no longer hi-spec.

      ___A. Hardware development is not only related to PCs, and it follows market demand. If only a few games exist that require high-end cards, why make an even more powerful one.

      ___B. the most recent console on the market (the PS3) dates from 2006. That is, we are at the cosmic minimum in the console dev cycle: no replacement has been announced, and so big developers are producing games for the 4-year-old gr

    • That was from my local Game game store here in the UK, a national chain, and they constantly have similar pricing offers on.

      Now, by that do you mean the generic term "game store" or do you mean the chain of stores called GAME? Because I have always found that GAME is ridiculously overpriced. When MW2 came out I had a look round at whom was cheapest. GAME was selling it for £35 (earlier on it was £39.99), but I picked it up at Tesco for £29.99

    • I don't personally care about "mass migrations to Linux"

      To Steam's credit, they are in the middle of porting Steam and their Source games to Linux, which is a very small but growing market. They have supported Linux for dedicated servers for over 10 years. They seem pretty determined to support Linux as much as possible, even if it isn't particularly profitable. Now that Steam supports OSX and Linux soon, they are certainly positioning themselves for the future. The question is whether other games prod

    • Re: (Score:2)

      by elrous0 ( 869638 ) *
      I buy most of my games used for $10-$30. Even the hottest title will often be down to around $20 just a year after release. But I can only do that with console games now. Digital distribution and DRM is killing the used market for PC games (intentionally). So digital copies certainly don't mean a good price for me. It means paying close to retail for something I would have been able to buy a lot cheaper used if it weren't for all the DRM.

  • Second Hand Market (Score:3, Insightful)

    by im just cannonfodder ( 1089055 ) on Friday July 23, 2010 @04:01AM (#33000774) Homepage
    sony and co (all the large game corps) have all got together and are simply trying to destroy the second hand market which is why they are trying to force us to only accept digital distribution laden with DRM like steam where all your purchases are not allowed to be resold.

    they simply want to force everyone to have to purchase new which is why they have continually tried to get us to stop using the PC and move onto the kiddie toy consoles.

    but now they are not happy with the consoles and are trying to block second hand games being traded on them.

    i hate scum bag anti consumer corporations.

    • Comment removed (Score:4, Interesting)

      by account_deleted ( 4530225 ) on Friday July 23, 2010 @04:30AM (#33000928)
      Comment removed based on user account deletion

    • I have so many old games laying around that I never got around to reselling, nor do I ever play. I'm pretty sure I'm the norm.

    • Who can blame them? They don't owe it to anybody to supply people with games. They have a business to run. Most projects struggle to make a profit the way it is. If they see a new and emerging business model, they're not going to wait around for someone to beat them to it.
      And judging by the success of subscription based models and digital distribution, it appears that most gamers aren't tremendously concerned about reselling their games.

      If anybody is to blame for this development it's the large chain retail

  • whining (Score:2)

    by Tom ( 822 )

    It is always the same whining. "piracy is killing us", "the VHS is killing us", "bootlegs are killing us" - no matter if it's games, movies, music, the main expertise of the content industry has for at least 40 years been whining.

    Unfortunately, they're not laughed out the door as they deserve to.

    • Some people like to whine and exaggerate. But it would be ignorant deny that these developments don't change the way people do business. For better or for worse.

      Games developers have already shifted the majority of their efforts to consoles, so have in that sense been "laughed out the door". Some people are perfectly happy with that. Others complain about the publishers and write angry posts on forums.

  • 9/10 people agree that most stats are full of shit (Score:3, Insightful)

    by nataflux ( 1733716 ) on Friday July 23, 2010 @04:38AM (#33000976)
    And let's not forget about the subscription based mmo market, as well as the mostly korean freetoplay mmo market, both of these markets being mostly pirate proof, and coincidentally massive.

  • Contested Numbers (Score:4, Informative)

    by Tridus ( 79566 ) on Friday July 23, 2010 @05:08AM (#33001098) Homepage
    According to Stardock's CEO, these numbers are wrong. Going by raw sales numbers, he says the digital number is actually closer to 25% [elementalgame.com].
    Why the discrepency? Well, he has actual numbers for retail and Impulse (which he happens to own). He doesn't have numbers for Steam. Of course, neither does NPD. Their digital numbers are based on an online survey. These are not real sales numbers by any measure of the word, they're the sales equivalent of a biased online public opinion poll.
    If I stood in the electronics aisle of Walmart and did a survey there, I'd find shockingly different numbers too. Unfortunately since we don't have accurate sales data for anybody, we're left with this kind of guess work.
  • PC gaming was never dying/dead in the first place, these are all non-stories.

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