Digital Distribution - Good or Bad? | The Game Fanatics

It’s crazy to think that only 10 years ago, most people still used dial-up 56k connections and it would take them 5 to 10 minutes to download a song. Now days, we can download game demos in that time! As internet speeds continue to increase and the world around us becomes more based on computers and the internet itself, game publishers are beginning to look at digital distribution as the next step. Record companies have already begin doing this years ago with music, and CDs now are becoming a thing of the past. Is this a good thing or is it a bad thing?

[gamingdroid]

I kind of agree with this article. Digital distribution is almost universally bad for consumers as it stands.

Unless there is some way for it to get competition and that there is some way for gamers to be able to play their content long after the console is no longer sold, it is essentially a downgrade.

There is one advantage though, I don't have to store physical media and the convenience is unmatched.

[ECM0NEY]

The major ISPs would have to be forced at gun point to incease bandwidth before DD will be mainstream.

[NYC_Gamer]

i have no problem with digital brought games from steam plus music from itunes

[Neomic]

Downloads from iTunes are a little different though, especially now days that their files are DRM-free. You can do pretty much whatever you want with them.

[Legal_Eagle1337]

Interesting topic of choice. I was discussing this topic with a colleague a few days ago concerning Copyright infringement on digital products. Nevertheless, let’s take a REALISTIC look on this issue and how the market would adapt. Markets are ever changing and adapt to consumers' needs (basic principle of business school).
To begin, Digital distribution is inevitable. Maybe not next year or even 5 years from now, but within our lifetime it will become the norm. Music is slowly heading that direction with the increasing decline in physical copies of CD's being purchased worldwide in favor of digital releases. Games are starting to head in this direction as well. For example, note the Games on Demand in X360 Marketplace. Although slow, the adjustment is being made.
Medium is essentially a contemporary object. The medium of choice is usually the most cost efficient, technically accommodating, and generally accepted form of "sharing" the data being licensed. Look at the 1970's, 1980's and 1990's for example. Music went from vinyl and 8tracks to cassettes, to CD, and now is transitioning into Digital copies. Movies went from VHS, to DVD, to HD DVD/ Blu-Ray, and now transitioning to a mixture of On-Demand services and digital downloads as well. Games have progressed from cartridges to disc format, and are now being expanded into digital downloads as well. As for issues of backwards compatibility, look how many classic Sega (Sonic series) games, N64 (Perfect Dark, Banjo series, etc) are being adapted and re-released (essentially as ROMS) onto the X360 Marketplace through emulation on the 360 hardware. On the Wii, there is the Virtual Console, allowing users to play games from consoles popular from years ago. The examples could continue. Moving on.
The author states "Digital distribution would no doubt eliminate manufacturing costs with no need to produce discs, cases, or even the booklets." While this is true in its respective assumptions in terms of DISTRIBUTION, game companies bear the cost of many other aspects of releasing a game to the public. According to IGN's publisher poll, "It costs Next-Gen game publishers roughly $10million to publish a game in its current format (disc). A large portion of this cost goes to paying the talent that's making the games - the programmers, artists, musicians, designers, producers, and testers." Publishers bear the cost of Development, Licensing, Marketing, and last DISTRIBUTION. IGN also reports "Wholesalers typically pay around $30 per game and with the costs of getting the goods to the wholesalers, any co-op advertising or marketing, and return of good contingencies being ROUGHLY $14 per game, the publisher is going to TYPICALLY get $16 for every unit sold." So the author is potentially wrong in the statement "I highly doubt that this would lower the costs of games in any way, even though your favorite brick-and-mortar stores (GameStop, Wal-Mart, Target, and Best Buy) would no longer be getting a cut of the money." The price of software could potentially drop due to retail stores not being used for sales, however one should regard it is likely M$ or Sony or Nintendo may charge to "carry" games in their Marketplace (much like licensing) in order to "cash in" as being a "storefront" and curb hosting costs.

CONTINUED

[Legal_Eagle1337]

The author hypothetically asks "What happens 15 years from now when you want to pull that old PS4 out to play a game you downloaded, but they’re all disabled because Sony no longer supports the console?" The only way to answer this question from an industry standpoint is to note the trends of consumers replaying games from years past. And realizing that if software companies can produce (mainly port) digital re-releases of games from cartridge form from back in the 70's, 80's, and 90's, what makes the author believe the same cannot be done with today's games? I mean look at the XBOX ORIGINALS that are available on the X360, is this not M$ supporting prior generation's software? It's true that you have to purchase the software again, but it’s at a significantly reduced price. As a business consultant, I would say that the people who really want to enjoy those older games are willing to pay for the convenience of having it readily available on their current console instead of having to drag out their "Sega Genesis, Dreamcast, and Nintendo 64" from storage to play a few games. To touch on the "hard drives don’t last forever, so there’s a chance that you could even lose many of those games" statement, notice on X360 when you download a game, it saves to your GAMERTAG (account) not just to the XBOX itself. Notice when you upgrade from an earlier console you can TRANSFER your previous downloads to the new console. This is because of the fact that:
WHEN YOU BUY A GAME, YOU ARE NOT PURCHASING THE ACTUAL GAME IN ITS PHYSICAL FORM OR THE SOFTWARE ITSELF, YOU ARE PURCHASING THE LICENSE TO USE THE GAME WITHIN IT'S INTENDED PURPOSES THAT YOU AGREED TO WITH THE MANUFACTURER BY OPENING THE GAME FROM ITS SEALED BOX.
Therefore if a hard drive crashed, you are still entitled to access the purchased software on the new hard drive by simple downloading the software again.
In the legal world, the contract explained in BOLD above is known as a SHRINK-WRAP AGREEMENT (or contract). The end user (consumer) does not buy the actual software itself, he/she ONLY purchases a LICENSE to use said software.
:::FREE LEGAL ADVICE::: WHEN YOU OPEN THE SHRINK WRAP ON A GAME, COMPUTER SOFTWARE, DVD, Blu-Ray, CD, ETC. YOU ARE AGREEING TO A BINDING CONTRACT WITH THE MANUFACTURER. The terms can usually be found within the box, in fine print, usually in the back of the paper insert provided with whatever software you are purchasing. This is why when you open software the retail store will not allow returns generally, the liability of defects, etc falls upon the manufacturer once you open the sealed product (agree to the mfg contract).
Also, the author mentions the death of trading games with friends, trading games in to stores such as GameStop, being "stuck" with games, or gifting games away. These problems are all remedied in various market adaptations. If the publishers switched to digital only, most likely they would offer you the ability to buy multiple versions of licenses of the software. Say for instance a single-use license which only lets you install it on one device (or account), where as the trends are pushing towards the additional availability of multi-use licenses (which would cost you more than single-use license (i.e., think of ENTERPRISE EDITIONS of WINDOWS Software)) that would allow you the benefit to transfer the software to other accounts (friends, reselling of additional licenses purchased, etc), or essentially start offering the availability of "re-use" depending on the license. Although it may end business models such as traditional GameStop's and such, it could entail a whole new niche in the digital download market that is yet untapped and I would argue GameStop would adapt to the new conditions and survive.

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[Legal_Eagle1337]

To end, I would like to clarify the closing misstatement by the author: "Basically, digital distribution benefits only the game companies and actually robs you of many of the liberties you have by owning a physical copy." Since one does not purchase the software itself even when buying a precious physical copy, digital distribution does not infringe upon your liberties. Currently, when you open the game and agree to the MFG contract you are agreeing to the use of their software by THEIR terms, not YOURS. No more, no less.
Comments or additions welcome and would love to hear the authors opinions further on this subject.
CHEERS ALL :)

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