Digital distribution in video games
In the video game industry, digital distribution is the process of delivering video game content as digital information, without the exchange or purchase of new physical media. This process has existed since the early 1980s, but it was only with network advancements in bandwidth capabilities in the early 2000s that digital distribution became more prominent as a method of selling games. Currently, the process is dominated by online distribution over broadband internet.
To facilitate the sale of games, various game companies have created their own platforms for digital distribution. These platforms, such as Steam, Origin, and Xbox Live Marketplace, provide centralized services to purchase and download digital content for either specific video game consoles or PCs. Some platforms may also serve as digital rights management systems, limiting the use of purchased items to one account.
Before internet connections became widespread, there were few services for digital distribution of games, and physical media was the dominant method of delivering video games. One of the first examples of digital distribution in video games was GameLine, which operated during the early 1980s. The service allowed Atari 2600 owners to use a specialized cartridge to connect through a phone line to a central server and rent a video game for 5–10 days. The GameLine service was terminated during the video game crash of 1983.
Only a few digital distribution services for consoles would appear in the 90s. In 1988, Nintendo introduced the Famicom Modem, a Japan-only peripheral for the Family Computer. Similar peripherals and services would be released for the Super Nintendo (Satellaview) and the Nintendo 64 (Randnet) in Japan. Sega would release the Sega Channel for its Sega Genesis console in 1994, providing owners with access to games on demand and other services.
On PCs, digital distribution was more prevalent, though there were no significant services for it. Only few examples exist, like Cavedog who distributed regularly additional content for their Real-time strategy computer game Total Annihilation as free download via the internet in 1997.
Instead, mostly users used the internet to distribute their own content. Without access to the retail infrastructure that would allow them to distribute this content through physical media, user-created content such as game modifications and maps could only be distributed online.
By this time, internet connections were fast and numerous enough such that digital distribution of games and other related content became viable.
The proliferation of internet-enabled consoles allowed also additional buyable content that could be added onto full retail games, such as maps, in-game clothing, and gameplay. This type of content, called DLC (Downloadable content), become prevalent for consoles in the 2000s.
Today, each of the current main consoles (Wii, Xbox 360, and PlayStation 3) has its own digital distribution platform to sell games exclusive to digital formats and digital versions of retail games. These are the Wii Shop Channel, Xbox Live Marketplace, and PlayStation Store, respectively. The Wii Shop Channel, released in 2006, allows the download of classic Nintendo games as well as Wii-specific software such as additional channels. Microsoft's Xbox Live Marketplace and Sony's PlayStation Store sell both full retail games and downloadable titles that are often exclusive to the service.
An early innovator of the digital distribution idea on the PC was Stardock. In 2001 Stardock released the Stardock Central to digitally distribute and sell its own PC titles, followed by a service called Drengin.net with a yearly subscription pay model in summer 2003. In 2004, the subscription model was substituted by TotalGaming.net which allowed individual purchases or pay an upfront fee for tokens which allowed them to purchase games at a discount. In 2008, Stardock announced Impulse a third-generation digital distribution platform, which included independent third-party games and major publisher titles. The platform was sold to GameStop in May 2011.
The period between 2004 and now saw the rise of many digital distribution services on PC, such as Amazon Digital Services, GameStop, Games for Windows – Live, Origin, Direct2Drive, GOG.com, GamersGate and several more.
The offered properties and policies differs significantly between the digital distribution services: e.g. while most of the digital distributors don't allow reselling of bought games, Green Man Gaming allows this.
In 2004 the Valve Corporation released the Steam platform for Windows computers (later expanded to Mac OS and Linux) as a means to distribute Valve-developed video games. Steam has the speciality that customers don't buy games but instead get the right to use games, which might be revoked when a violation of the End-user license agreement is seen by Valve or when a customer don't accept changes in the End-user license agreement. Steam began later to sell titles from independent developers and major distributors and has since become the largest PC digital distributor. By 2011, Steam has approximately 50-70% of the market for downloadable PC games, with a userbase of about 40 million accounts.
Another notable example is the 2008 started gog.com (formerly called Good Old Games), specialized in the distribution of older, classical PC games. While all the other DD services allow various forms of DRM (or have them even embedded) gog.com has a strict non-DRM policy.
Digital distribution is the dominant method of delivering content on mobile platforms such as iOS devices and Android phones. Lower barriers to entry has allowed more developers to create and distribute games on these platforms, with the mobile gaming industry growing considerably as a result.
The main advantages of digital distribution over the previously dominant retail distribution of video games include significantly reduced production, deployment, and storage costs.
Digital distribution also offers new structural possibilities for the whole video game industry, which, prior to the emergence of digital media as a relevant means of distribution, was usually built around the relationship of the video game developer, who produced the game, and the video game publisher, who financed and organized the distribution and sale. The heightened production costs in the early 2000s made many video game publishers avoid risks and led to the rejection of many smaller-scale game development projects. Gabe Newell, creator of the PC digital distribution service Steam, described the disadvantages of physical retail distribution for smaller game developers as such:
The worst days [for game development] were the cartridge days for the NES. It was a huge risk – you had all this money tied up in silicon in a warehouse somewhere, and so you’d be conservative in the decisions you felt you could make, very conservative in the IPs you signed, your art direction would not change, and so on. Now it’s the opposite extreme: we can put something up on Steam, deliver it to people all around the world, make changes. We can take more interesting risks.[...] Retail doesn’t know how to deal with those games. On Steam [a digital distributor] there’s no shelf-space restriction.
Since the 2000s, when digital distribution saw its first meaningful surge in popularity, an increasing number of niche market titles have been made available and become commercially successful, including (but not limited to) remakes of classic games. The new possibilities of digital distribution stimulated the creation of game titles from small video game producers like independent game developers and modders (e.g. Garry's Mod), which before were not commercially feasible.
Independent Game Development
The increasing prevalence of digital distribution has allowed independent game developers to sell and distribute their games without having to negotiate deals with publishers. No longer required to rely on conventional boxed sales to see profit, independent developers have seen success though the sale of games that would not normally be accepted by publishers to distribute. The PC and mobile platforms are the most prominent in regards to independent game releases, with services such as GOG.com, GamersGate, and Steam and the iOS App Store providing ways to sell games with minimal to no distribution costs. However, some digital distribution platforms specifically for independent games exist on consoles, such as Xbox Live Indie Games.
Buyer Advantages and Disadvantages
Compared to physical games, digital games like those offered on the Steam digital distribution service cannot be lost or destroyed, and can be redownloaded at any time. However services like Steam, Origin, and Xbox Live do not offer a way to sell used games once they are no longer desired, however some services like Steam do have family sharing options. This is also somewhat countered by frequent sales offered by these digital distributors, often allowing major savings at prices below what a retailer is able to offer.
Examples of Video Game Digital Distribution Systems
- GameLine (early 1980s)
- Famicom Modem (1988)
- Nintendo Power (cartridge) (19??)
- Sega Channel (1994)
- Satellaview (1995)
- Nintendo 64DD Randnet (December 1999)
- iQue Depot (2003)
- Giskard (2012-10-12). "Total Annihilation: An RTSG Classic". http://www.theengineeringguild.co.uk. Retrieved 2013-06-18.
Total Annihilation was one of the early adopters of the DLC releases and every month Cavedog would release a new unit for free to try with the game.
- TA downloadable units on cavedog.com (archived in the Internet Archive on March 30, 2001)
- Walker, John (2007-11-22). "RPS Exclusive: Gabe Newell Interview". Rock, Paper, Shotgun. Retrieved 2013-06-28.
The worst days [for game development] were the cartridge days for the NES. It was a huge risk – you had all this money tied up in silicon in a warehouse somewhere, and so you’d be conservative in the decisions you felt you could make, very conservative in the IPs you signed, your art direction would not change, and so on. Now it’s the opposite extreme: we can put something up on Steam [a digital distributor], deliver it to people all around the world, make changes. We can take more interesting risks.[...] Retail doesn’t know how to deal with those games. On Steam there’s no shelf-space restriction. It’s great because they’re a bunch of old, orphaned games.
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[...] [Good Old Games] focuses on bringing old, time-tested games into the downloadable era with low prices and no DRM.
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The jump in development and marketing costs has made the videogame industry "enormously risk averse,[...]Publishers have largely focused on making sequels to successful titles or games based on movie or comic book characters, which are seen as less risky. "We don't green light any more things that will be small or average size games.[...]"
- "The Secret of Monkey Island: Special Edition Tech Info". GameSpot. Retrieved November 15, 2011.
- Onyett, Charles (June 2, 2009). "E3 2009: The Secret of Monkey Island: Special Edition Preview". IGN. Retrieved November 15, 2011.
- Garr, Brian (17 April 2011). "Download distribution opening new doors for independent game developers". Statesman.com.
- Stuart, Keith (27 January 2010). "Back to the bedroom: how indie gaming is reviving the Britsoft spirit". The Guardian. Retrieved 8 November 2012.
- Senior, Tom (2012-03-16). "Garry’s Mod has sold 1.4 million copies, Garry releases sales history to prove it". PCGamer. Retrieved 2013-06-28.
- "Download distribution opening new doors for independent game developers". Statesman.com. 2011-04-17. Retrieved 2012-05-01.
- "Steam family sharing". steampowered.com. 2015-05-13. Retrieved 2015-03-13.