Digital distribution of games has been the topic of discussion in the last few years. From Microsoft’s Xbox Live Arcade, to Sony’s PSN, Nintendo’s WiiWare, and even Apple’s App Shop. All of a sudden everyone is trying to distribute its contents digitally. Retailers of course are not as happy and trying to talk down this distribution model. So how feasible is it for the gaming industry to completely move away from packaged distribution?
Sony PSPgo is a brave attempt to release something that entirely depends on digital distribution under the Playstation label, but so far it has scored with limited success. Some people said it is because markets like Australia are not really ready due to the lack of capability in their infrastructure. However, taking a look at the Japanese market, where infrastructures are quite mature for such model of distribution, PSPgo continues to stay at the bottom of hardware sales week after week, selling only around 1000 unit per week. Sony is still trying to talk up PSPgo but as most can see, at this stage it seems the age of pure digital distribution is still yet to come.
So far the strongest arguments from publishers and developers in relation to digital distribution is the uptake of their digital services with their home or handheld consoles. Xbox has no doubt created a market for the digital and online services with its Live Arcade. Then with PS3 joining the battlefield with its own PSN service and Nintendo providing download services with WiiWare, it seems that nothing can go wrong with digital sales. So what went wrong with PSP, when Apple’s App Store and iPod / iPod Touch are selling loads of games on its platform?
As attractive as it looks, so far digital distribution is only successful for certain kind of software. First we look at the App Store – the main advantage of App Store is its easy to use interface and user friendly pricing. App Store games are very reasonably priced with their size. So people are more willing to spend a few bucks on games that they don’t mind trying. If not good, they’ll just stay there idle for the rest of the device’s lifespan. Also App Store games are really designed for on the go entertainment that completely integrates into the iPod / iPod Touch’s control scheme. So it doesn’t feel demanding or awkward for occasional or casual gamers to try them and buy them. On the home console front, so far the best selling items on these digital stores are retro games and downloadable contents (DLC). Retro games are a comparatively small size and they are correctly priced to attract retro gamers – so they have their market already established. As for downloadable contents, they are enhancements to a gaming experience that gamers didn’t have before. They add value to your games by providing additional quests, exclusive items, new characters etc. The most important thing is that they are typically well priced. So gamers are more willing to fork out money for these DLC to make their games more replayable.
But when it comes to full fledged games, it is another story. Usually the size is huge but at the same time the prices are not as consumer as friendly as it could be. Although digital games are less pricey as their packaged counterpart, they lack advantages in certain way:
- They are just downloadable contents, so for consumers who like to have artwork that accompany packaged items, there is no competitive edge to them. Especially with the increasing popularity of special editions, this is the kind of experience that pure digital games cannot offer.
- Full fledge digital games do not offer a re-sale value to gamers. At the moment, if gamers spent money on a new game and found out they don’t like it they have an option of selling them on eBay or to retailers for store credits to recoup part of the expenditure. However, this advantage is not available for digital games. It is obvious that publishers and developers are hoping that digital download can kill the second hand market and increase their profits, but then without an option for gamers to sell games that they don’t like, digital games on full price immediately become a lot less attractive.
- Digital games are market restricted. It is known to most gamers that the PSN stores in New Zealand and Australia are very different from the store in North America. For packaged games, especially with PS3, gamers can import them through eBay or specific retailers, but there is no such luck for digital games as you are locked to a region. Take Wii as an example, you can’t even buy a digital game as a gift for your overseas friend if he/she is not in the same region as your console.
With these issues associated with full price digital games, it is understandable that it will still be an uphill battle for publishers and developers to try to sell all games through digital download. It will seem that this model of distribution will continue to be limited to small experimental games for developers hoping to launch their businesses, additional contents for packaged games and promotional demo. It is only when the issues mentioned above are resolved, that pure digital distribution of major games could be achieved.