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Digital Distribution is About to Get Ugly

Digital Distribution is About to Get Ugly

In Part I of The Future is Doomed, 109 explained why digital distribution (DD) and downloadable content (DLC) are quietly killing the gaming industry. This installment in the series will explain why we are now on the cusp of a massive decrease in quality for digital distribution.

Gaming handles digital distribution in a fairly unique way, because it’s all “under one roof”, so to speak. What do I mean by that? I mean that the people selling the games are the same people who are making them in the first place. That’s actually fairly unique when we compare it to other DD industries; iTunes is not made by a recording studio, Kindle is not made by a publishing house, and Netflix is not made by Hollywood. Netflix in particular is a very poignant example, because various movie-industry-backed services attempted to do exactly what Netflix did and none of them met with any degree of success (due largely to various restrictions placed on consumers that potential customers found irritating).

Contrast this with gaming: who is behind the various digital distribution outlets? In almost all cases, it’s a game developer or publisher. This effectively gives them a monopoly on the system. Should DD ever completely edge out third party retailers, such as GameStop, it opens the door to rampant abuses of the system because gamers will have nowhere else to turn. Gamers are interested more in the products – the games themselves – than the distribution service, and developers understand this all too well. When services are handled by third parties, as is the case with Netflix and Kindle, those third parties have an impetus to build the best system they possibly can. If they don’t, customers can and will leave for competing services. There ARE other video and book providers out there, both retail and digital, and if you didn’t like how one of the aforementioned services was treating you, you are fully capable of taking your business elsewhere and buying the exact same book/video from a different source.

It doesn’t work like that in gaming. As both creator and retailer, game developers marketing to an online service have an unrivalled level of power over their customers. They get to determine everything, from the price we pay to the rules we have to follow if we want to play their game. If and when GameStop and other third party retailers are muscled out of the picture, gaming companies are free to make the system as cumbersome and unwieldy as they want, because they know we don’t have an alternative; if we want to play their game, we have to dance to their tune.

Blizzard aptly demonstrated this concept recently with their announcement that Diablo III would be a persistent-online game. All game modes – including single player – will require the player to be online. The (hollow) justification given for this action is that it allows Blizzard to easily push out automatic updates to the game and prevent cheaters from hacking their characters. Penny Arcade author Jerry Holkins fairly concisely pointed out why this excuse doesn’t hold water and explained what is very likely the real motivation behind Blizzard’s decision in one of his recent posts.

The revelation of Diablo III’s persistent online mode was unwelcome news for me, on a number of levels. Ignoring the theoretical fallout of such an action, it pretty much destroys any possibility of me buying the game – a shame, because I loved both its predecessors. I live in a rural area of western Canada, and my internet is spotty at the best of times. The odds it will be sufficient to allow me to play Diablo III without getting booted off every few minutes are fairly slim. Actually, the fact that I can get “booted” from a single player game is still an idea I have yet to wrap my head around.

Really, the whole situation is a bit surreal. I, the customer, am standing here, money in hand, asking to be allowed to pay Blizzard a portion of my hard-earned paycheque and their effective response is “No thanks, you keep your money.”

The philosophical ramifications of this development choice are much more dire, because it’s basically allowing Blizzard to constantly monitor how we play their game and if they don’t like what they see, they can change our experience (including removing us from their servers). Apparently I wasn’t the only one to notice this, because the announcement of the persistent online mode sparked a massive fan backlash, one that was vitriolic enough to surprise Blizzard’s vice president.

Of course, for all the fan rage this act provoked, it’s not going to substantially impact Blizzard’s bottom line; I have no doubt whatsoever that Diablo III will be one of the best-selling games of the year. Fans may despise the inconvenience of a persistent online mode and the invasive way it was pushed on them, but they’ll still love the game and, at the end of the day, that’s what determines whether or not it will sell. While we can hate the way the game is presented, if the game itself is good, we’ll still buy it.

And if you don’t think game companies know that, you’re kidding yourself. Shortly after the Blizzard announcement, id Software’s creative director, Tim Willits, chimed in with his take on the situation. In his own words:

“Diablo 3 will make everyone else accept the fact you have to be connected. If you have a juggernaut, you can make change. I’m all for that. If we could force people to always be connected when you play the game, and then have that be acceptable, awesome.”

What I found most striking about this commentary is the choice of words Mr. Willits used: Diablo III will make us accept change, and we will be forced into connectivity. Both of these (accurately) imply that this is a change gamers do not want, but the industry does, so it will be pushed on us in a way that we cannot effectively resist. Ubisoft already tried this last year, courageously demonstrating the pitfalls of persistent online modes. For the record, after a colossal backlash from their fans and customers, Ubisoft eventually ditched the persistent online idea.

That being said, however much you may hate his words, Mr. Willits is very much correct in his assessment. If we don’t like Diablo III’s persistent connectivity, it’s not like we can buy it from somewhere else and be rid of the feature. Blizzard holds all the keys – we either play Diablo III with persistent connectivity, or we don’t get to play it at all. This change will be “forced” on us, and Blizzard will be successful in doing so.

The astute of you will probably realise that I just spent the last several paragraphs arguing about a subject that has nothing to do with digital distribution. After all, Blizzard could just as easily pull the “persistent online” card with a retail-only game.

So what does this all have to do with digital distribution?

Well, just like with Diablo III, digital distribution can tack on features you don’t like and there’s not a whole heck of a lot you can do in response. And as more and more of the industry shifts to a DD model, that’s exactly what you’re going to start seeing.

Quick question: who’s your favourite DD distributor? For a substantial number of you, I’m going to guess the answer is Steam. And with good reason – they sell games cheap, their client program is fairly unobtrusive, and they’re all around an upstanding company. Since they are focussed on the service they provide, they do their best to make it as good a service as it can possibly be. To put it in a nutshell, “they do DD right.”

The problem, however, is that Steam’s model is built upon a critical building block: their ability to supply top notch games that everyone wants. Remove that and it doesn’t matter if Steam provided the greatest DD service in the history of humanity, they would still wind up collapsing as a business.

Thanks to Steam’s runaway success, it has attracted several competitors. Two of the more noteworthy new challengers are EA’s “Origin” and GameStop’s “Impulse”. I confess I have not tried either, but my friends who have describe both of them as “not as good as Steam.” Origin, for example, ties itself to your games: you cannot play games you have purchased unless you do so through the Origin system. It also tends to be something of a resource hog. There’s also some pretty weighty privacy concerns stemming from Origin’s EULA.

Here’s the thing, though… no matter how much you may hate EA and Origin, you will likely eventually wind up using it if they want you to. All they need to do is put a nice, shiny IP on there – perhaps a new Bioware game like Mass Effect 3 or Star Wars: The Old Republic – and refuse to release it anywhere else and you would basically be forced into capitulation if you’re a fan of those series. Now, to be fair, this is probably a long ways off and I might be doomsaying a bit here, because no company would ever hold their own customers hostage by forcing them to use their DD system to play a new, hotly anticipated game… wait, what’s that? Battlefield 3 requires you to use Origin, you say? Even if you didn’t buy the game through Origin? Hmm…

Multiply this by however many people want in on the lucrative DD business (and there are a lot of them) – suddenly we’re in a very ugly place. Now you won’t walk down to the store and buy a game – you have to be a member of that store first, and the store’s owners (the game developers) get to decide what exactly that entails. They can push any number of stupid clauses on you (subscription fees, the aforementioned persistent internet connectivity) and they are free to shut off access to the games that YOU PAID FOR for any reason they please. GameTap already does this; didn’t pay the monthly subscription fee? Congratulations, you just lost all your games!

You can also expect that services like Steam are going to flounder because, as more DD services hit the market, people are going to start reigning in their IPs and making them available only on their preferred DD system. As an example, you’ll likely never see another EA game on Steam. After all, why would they want to support a competitor to Origin? This was already proven true with the aforementioned Battlefield 3, which EA has confirmed will not be available on Steam. Furthermore, some of EA’s older games, such as Crysis 2, are actively being removed from the Steam store.

A few years down the road the DD industry won’t be controlled by Steam, or any of the companies focussed on providing a top-notch DD experience – the industry will be controlled by whichever DD service(s) secures the most top notch games for exclusive release. And as all the big names step up to the DD plate – Nintendo, EA, Sony – that playfield is going to become increasingly crowded. Unlike today, where a single shop could feasibly satisfy all your gaming needs, you will need a plethora of online stores (and a comparable number of DD programs) for your various game purchases.

Hope you’re enjoying those DD games.

2 Comments

  1. Steam will continue to be successful because of Valve’s high quality games and the fact that Valve show their customers a good degree of respect. Indie developers are able to sell through Steam, unlike other systems. Steam also has an offline mode, many of these new systems don’t. Personally I think games should only require internet access for online functionality. DRM has a very limited effect on piracy (otherwise Steam wouldn’t be successful to begin with). Unless other companies can get something as slick as Steam, I don’t see myself buying their games. I don’t want to have to sign into half a dozen services every time I switch on the computer and want to choose a game to play.

  2. More DD platforms means more competition. If other DD systems cant compete on Steam’s pricing then they can attempt to compete on features or selection. More competition drives down prices for consumers or add value to existing DD platforms. More people buy games. Its a win for consumers and a smaller win for publishers.

    There’s a reason why PC games are cheaper (beyond no licensing fees present in console developed titles) and they also tend to fall in price much faster – and the PC doesn’t even have an effective second hand market; a lot of that has to do with competition.

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