This is the second part in our digital distribution series. You can find the first part of our series here.
In my previous article, I wrote that our industry is moving towards a digital distribution system. Some people still can’t see that not only is this inevitable, that the process is already quite far along.
Of course, the most illustrative example is the casual games genre, which has simply exploded in the past few years. With the likes of RealArcade, Pogo, and Big Fish Games, the online marketplace for casual games has been firmly established. I want however to put casual games aside during this discussion, for while they have been vastly successful in driving the growth of digital distribution, they are not representative of the typical games people talk about when they discuss the traditional games industry. They represent a subset of the games industry, and no one will argue that digitial distribution is alive and thriving for this sub-market. You can find all the information you want on casual games on sites like gamezebo.com and casualgamesblog.com.
Whereas in the past the only way you could survive was by finding a way to get retails stores to carry your game, indie games developers (and even non-indie developers) are finding it can actually be profitable to ignore the brick and mortar altogether. Valve has developed Steam, a secure digital distribution service, which they used to launch Half-Life 2. Yes, the game was available in retail stores as well, but it was still one of the first major titles to be launched. Even if you bought the game in store you still had to install the Steam service to verify your copy and to download any new patches or content updates.
Since it’s launch, Valve has steadily grown the products and services offered through Steam, using it to put out demos, episodic content and publish other indie games. Lately, Valve has taken to publishing critically-acclaimed games which have not done so well the first time around in the retail market. They published Introversion’s Darwinia and the developers noted in an interview that they made more sales on Steam in the first three weeks than they had done in retail over 9 months. Also announced recently is that some Majesco games will be brought over to Steam including both BloodRayne 1 & 2, and Psychonauts (another well reviewed game which didn’t do very well in traditional channels, and has developed a cult-like following, as do many sleeper titles).
Other than Valve, we also have indie game publishers such as the newly formed Manifesto Games and GarageGames, each with their own unique approach of delivering indie games to the market. GarageGames in particular also invests a lot of time and energy providing tools and helping developers create those indie games.
Of course, in the mass-market mainstream side of things, there’s Microsoft and their Xbox Live Arcade offering. Of the games they have published so far, some have been casual, and others remakes of old games, but as time goes by the games will become more sophisticated and larger, and eventually (whether in this generation, or the next-gen offering) will become full-fledged equivalents of games available at retail.
Sony and Nintendo are sure to follow suit with their own downloadeable game services (Nintendo having released more info about their system recently). Sony has indicated again and again that they are planning a major move into digital distribution, potentially making at least some of their back catalogue PS1 and PS2 games available for download, as well as their own set of downloadeable games (a la XBLA). And while Sony admits that full downloads of new console games is not yet practical (last paragraph), the simple fact that they are even considering it means that it expect it will become practical one day once the technological barriers are overcome(bandwidth and storage space).
Interestingly enough, over the past 12 months, a large number of major publishers have signed digital distribution deals. THQ, Macrovision and Sega are all moving into the digital distribution era, leveraging their IP and their past titles and slowly making them available for download on various services. Also important, other major developers are considering following into Valve’s footsteps, and releasing their new titles through online downloads: Remedy (makers of the Max Payne series) are considering releasing Alan Wake through their own digital distribution means.
The boldest prediction yet comes from an EA rep (of all people). EA’s European VP of sales, Dr. Jens Uwe Intat foresees that downloads will replace the retail business within about 10 years. The interesting part is that Dr. Intat is adamant that the games industry will control their own destiny, and that publishers would have a strong hand in creating the distribution network:
It doesn’t necessarily mean that retailers will get left behind. Well, they may have a hard time in the console space, but there is no reason why they can’t set up their own distribution networks, and then sign deals with publishers to bring new games to the market through their own service. However, now they will have to compete with other networks who already have a few years head start, but again, it doesn’t mean that they can’t adapt. They should be able to leverage their brand name awareness and use their retail stores to market their new services. Alternatively, they can stand by and watch as the wave of the future passes them by.
Finally, yes, most of the games currently available for download are older games or smaller casual games, but that is only because of the current restrictions on bandwidth. That is only bound to increase (no pun intended). Digital distribution is upon us. It’s only a matter of time until all the major players start to adapt.
This is the second part in our digital distribution series. You can find the first part of our series here.
[…] Another important factor working in favor of indie developers is the rise of digital distribution in the games industry. We’ve discussed this subject before but it does not hurt to go over some of the many avenues available today. […]
Left by Inner Bits » Blog Archive » A Great Time to Be an Independent Developer -- Changing the Games Industry, One Bit at a Time. on January 14th, 2007