Digital Game Distribution: An essay

Digital Game Distribution

Digital Game Distribution platforms (DGD) were introduced in the early 1980s with the creation of the GameLine for the Atari 2600 and has been growing steadily ever since. Today it is now possible to never leave the house and still own catalogues of music, movies and games. Consumers now have 24/7 access to a plethora of entertainment, ready to buy in a couple of clicks. Gaming companies can now advertise to their audience for free, no more buying ad space and hoping their audience sees it; they can sell to consumers inside the consumers own home. However, with that come some major pitfalls. I intend to look at how DGD platforms have affected traditional ‘brick and mortar’ high street stores and if this new internet-reliant alternative to traditional purchases is a positive move forwards or a bane for both creators and consumers. 

JOBS

Has the introduction and popularisation of online DGD caused significant issues for employment? 

Losing Jobs

To attempt to discover if so, we will have to look at Chains of Operations. A Chain of Operation is the order in which a product is created and sold. (Humphreys, 2005) For a standard Distributor-Publisher relationship, the chains look as such below: 

(Old) Developers -> Publisher (Marketing, financing, sales forecasting)-> Distributor -> Retailer -> Consumer

(New) Developers -> Publisher/Distributor/Retailer/Marketing/financing/sales forecasting -> Consumer 

Using the new value chain has lost the Distributor and Retailer product to work with. With the decreased work load from one company probably would not affect these businesses but if more large companies follow this trend of Digital Only or offering the same product but available to buy form home instantly, then the side effects could be terrible. This is prevalent in Game PLC administration. 

In January 2011, Game PLC released their 2011 Preliminary Report. In the Chairman’s Statement the chairman at the time, Peter Lewis states the following:
Digital downloads and social gaming products have continued to gain in popularity. The pace of change is accelerating as new products are launched, and as developers and publishers seek the most effective ways to reach consumers. (Game Group PLC, 2011, p.5) 

A little further into the report at the Chief Executives Report, the following is said:
Industry analysts are predicting modest growth for the “traditional” elements of the market over the next few years (i.e. consoles, boxed software, accessories and preowned), until the next console cycle starts. At the same time, they are forecasting growth in other areas of the market, specifically social, mobile and digital games (Game Group PLC, 2011, p.7)..... To make ourselves a genuinely multi-channel retailer we need to do three things:
1. Grow our web presence and deliver a better web experience for customers;
2. Fully integrate the web with our stores, so that our store estate helps us grow online share;
3. Continue to invest in emerging digital and mobile channels. (Game Group PLC, 2011, p.8) 

Reading this report through makes me believe that Game PLC wanted to expand into the digital distribution market to attempt to reach out to new and existing customers and to keep ‘with the times’. Their main competitor for game distribution is Valve and their digital-only Steam distribution platform. At the time of writing, Game has a Game.co.uk website and a Gamestation.co.uk website, both of which offer games to download and games to purchase new and second-hand with free UK delivery.

Having a quick look at the Game website, they offer 404 titles to download directly (calculated by number of ‘Age Ratings’) (Games Group PLC, 2012)
Steam offers 4572 for direct download. 

Opening up the product page for Skyrim on Games website, I am offered to both purchase the game and have a copy shipped to me for £24.99 or download directly for £37.99. (correct as of 25/04/2012)
Steam offer to sell me this game as a digital download only for £34.99 (correct as of 25/04/2012)
Looking at website called dlcompare.com I can get the game for £24.96 (correct as of 25/04/2012) (dlcompare, 2012) 

Now the ease of finding this information was simple. Why would a consumer purchase a game for £37.99 when the same product can be found for £24.99? Physical stores find it difficult to compete with internet pricing for many reasons; because stores have a large staff-base to deal with every month, as well as the upkeep costs of these stores such as utilities and rent, the prices of the stock they sell must be able to cover these costs at the end of each period. A successful company generally has a few stores over one or many countries, which instantly boosts the cost of rent and employee numbers. An online retailer or DGD only needs to rent out one or two warehouses per country, which have lower rent per square foot than a high street store, to store any stock or servers for digital stock. The upkeep of these servers generally requires few staff. The other staff needed such as support staff and moderators can be outsourced to third-world and developing countries as the wages are cheaper and the employment laws are less strict and generally unenforced.

In February 2012, Game PLC was not able to come to a reasonable credit agreement with many large publishers including Nintendo, Capcom and Electronic Arts (EA) for their March stock of games, including all Nintendo DS games, Mass Effect 3 and Tekken X Street Fighter. (Wallop, 2012) This was a major problem for Game as the two major titles were highly anticipated and caused a considerable loss from loss of sales to pre-order refunds. Customers in the UK had to rely on either purchasing these games online from places such as Amazon.co.uk, from overseas or buying a digital copy from EAs Digital Distribution service Origin. This made many customers lose confidence in Game. Game had to close 277 of their UK stores immediately, creating 2,104 job losses. (Press Association, 2012) These jobs being lost are traditional sales clerk jobs, which is the staple sort of job for the average citizen. It does not require specialist knowledge of technical skills like programming or require a PhD to execute. 

Makes Jobs

With the ease of consumer purchases and computer gaming becoming socially acceptable, more young and innovative people are trying to burst onto the scene. Now when someone says “I could do better”, they actually can attempt to do so. For indie developers, the Chain of Operations looks more like this: 

(Old) Developers -> Self marketing, financing, little or no sales forecasting-> Made available for purchase on their own website-> Consumer

(New) Developers -> Hosted on Digital Distribution Service-> Consumer 

One of the most popular DGD Steam, have always said that they are ‘Indie Friendly’, meaning they accept Indie games and at little to no significant cost. They host 326 Indie PC titles with prices ranging from pennies to serious money. 

Steam has an unusual Indie acceptance method with no clear guidelines. Their criterion is as follows:
“What do you look for when accepting games for Steam?
If your game has been previously released we consider such things as year of release, reviews and review scores, previous sales, and awards. For new games we look for unique and interesting gameplay and art, and of course it should be fun!” (Steamworks, 2011) 

Conversely another DGD “Desura” is designed around game ‘Modders’ and Indie developers and getting an indie game distributed by them is far easier. On their ‘Add a new game’ section of their site, there is a clear set of guidelines:
· BRAND NEW games or JUST STORYLINES / IDEAS will not be accepted. The majority of your game must be developed and consequently you must be able to show a significant amount of progress, e.g. screenshots of models and maps that you are working on, in-game videos MINIMUM.
· The game is unique and original and not in violation of anothers intellectual property.
· The game is not a duplicate of another game listed on the site.
· The game information provided must not violate the sites Terms of Use.
· The game information provided is free of spelling and HTML formatting errors.
· Submitting a game and then posting 'help wanted' requests does not constitute activity. Your game must BE IN ACTIVE DEVELOPMENT with either a team of people or yourself producing content. (Desura, 2012) 

The ease of adding your game to these digital distributors means that a whole new renaissance of gaming has been started. A project called Kickstarter is becoming increasingly popular: Indie developers or entrepreneurs post their ideas on this site with their promises and business plans. If the general public like it, they commit a pledge to the project. Those who pledge generally receive some form of benefit such as copies of the game after release etcetera. Now even funding is not an issue for indie developers. 

With physical retailers, a failed retail credit deal (Such as the Game PLC problem) or other similar issues could have sunk the developer while only affecting the publisher on a small scale; one such example is the game ‘The Last Express’.
Developed by Smoking Car Productions, The Last Express was a point and click, real-time adventure mystery game which received rave reviews and still does 15 years later. (Burch, 2006) The Publisher of this venture was Broderbund, who in turn, were owned by SoftGame, a subsidiary of Softbank. Just weeks before release in stores, the marketing department of Broderbund quit, leaving the game with little marketing. Softbank decided to pull out of the gaming market, dissolving SoftGame and leaving Broderbund without a publisher. Eventually, Broderbund was purchased by The Learning Company, a publisher only interested in educational games so their game was completely scrapped and Smoking Car Productions closed shortly afterwards. (Moran, n.d.)
 

The GDG ‘GOG.com’ and ‘dotEmu’ began selling the game when the rights lapsed and 15 years since its first release, via a Kickstarter, the game is going to be brought to iOS platforms. Smoking Car Productions are reforming to bring the game back to mobile devices via the Iphone App store with the assistance of dotEmu. (Mechner, 2012) The availability and re-popularisation of this timeless game via DGD has brought back the proverbial Phoenix from its ashes.

Another ‘Phoenix’ to be reborn by DGD is the unfairly-treated Obsidian Entertainment. A very popular game ‘Fallout: New Vegas’ was made by Obsidian for Bethesda who is owned by ZeniMax Media. The game was a “Straight Payment” game; there were no royalties. Bethesda agreed to payout a large bonus to Obsidian if the game received an 85+ score on Metacritic.com. The game received an 84 average. (Schreier, 2012) Not long before this, a game Obsidian had been developing for 7 months was cancelled because Microsoft cancelled the project, meaning Obsidian had to lay off 30 of its employees. (Schreier, 2012) However, after a successful kickstarter, Obsidian is being brought in to assist with a publisher-free game called ‘Wasteland 2’ and with their own kickstarter they wish to make their own games independent of a publisher.

On a more corporate note, EA Micro transactions and Downloadable Content figures have had a 480% increase over 1 year. (Electronic Arts Inc., 2012)“Micro items” such as new guitars for Sims to play in ‘The Sims 3’ and downloadable content such as new multiplayer maps for ‘Battlefield 3’ needs to be created, implemented and supported. People are under constant employment for this. Also as games are now largely internet dependant, employees are needed for updates, fixes, live chats and other support, such as updating the forums, keeping the anti-cheat system (Punk Buster) updated with the newest exploits to prevent unfair matches online and rooting out bully players. 

SALES

The consumer is now spoilt for choice on which way they can receive his or her copy of the newly anticipated game. They can buy it from a traditional store in the high street, order a copy from an online retailer such as amazon.co.uk or play.com, or download a digital copy from their DGD. But what does DGD mean for the average consumer? 

Better for consumers

Via DGDs, games are available to consumers nearly 24/7. If a consumer wants a title, all they have to do is open the ‘client’ and find the title. Clients such as Steam have every major title available in stores as well as hundreds that are not in stores. When a game is purchased, it is available instantly for download so there are no shipping times. When the game is installed, updates to improve aspects are delivered directly to the user without having to travel to the official game website and manually install it. 

Over the year, many DGDs have large sales, discounting games up to 75 percent off the original price or offering discounts on bundles of games from a single genre or developer, such as the Valve Complete Pack. Normally costing £49.99, this pack contains 27 titles including downloadable content. Overall, if purchased separately, the total would reach £127.81. During the Summer Sales, the pack was on sale for £24.99, giving the consumer a saving of anywhere between £20 to £102.82. Traditional stores like Game do occasionally have sales, discounting old games by 25 percent or so and newer games by a few pounds, but nothing of this scale. 

Better for consumers?

Conversely, DGDs like Origin and Steam have given the companies who own them more power than ever before; and not necessarily in a good way. Games from EA are only downloadable via Origin, EAs own DGD. Any EA game requires Origin to play, however there is an offline mode to play without an internet connection. In November 2011, Players who were banned from the EA forums also became banned from playing their games from Origin, including in Offline Mode. (Usher, 2011) If games did not require a DGD, the player would have been able to play their game whenever they wanted to. In April 2012, EA decided to allow these banned players to play single player mode offline, still keeping them banned from online multiplayer. (Usher, 2012) 

Some games now have an ‘Always On’ feature which means that to play a game in single player, it requires an internet connection and most of the time, an active DGD account. This means that even if you purchased the game in a store and installed it offline, the game demands to be connected to the internet so it can be played. For many people across the world, a stable internet connection or a fast one is not possible; also some people do not have the internet. These people now have no access to a large chunk of available games. 

This ‘Always On’ function also causes problems when the companies servers are down for maintenance, have had an unexpected power outage, have been compromised by a virus or have just been overloaded with traffic and crashed. When any of these things have happened, it makes these certain games unplayable until the problem has been rectified. This happened with Ubisoft and their server migration. Believing their customers able to play these games during the switch, thousands of players were outraged when this was not the case. (Hopkins, 2012) 

Another niggling issue with digital games and most games reliance on these DGDs is the ownership of the game. If EA was able to ban players from playing a single-player, offline game they ‘purchased’, and if the game is unplayable when the servers are down, who really ‘owns’ the game? In 20 years time when Steam has decided to close, what will happen? Will the hundreds of titles you’ve accrued over the years be defunct? Will you still be able to play them by yourself without an internet connection? Or will your thousands of pounds be essentially flushed down the proverbial toilet? Even physically boxed games still rely on Steam and Origin. Media Piracy developers are generally able to get around problems such as Steam or Origin reliance, but will supporting these pirates and their bypasses become the norm for regular people? The less tech-savvy of the consumers who have no idea where their AppData folder is, would be disadvantaged even further, being unable to ‘crack’ their legitimately purchased games. Of course, this is all speculation based on valid concerns. 

Conclusion

Has the introduction and popularisation of online Games Distribution caused significant issues for employment? 

Through the popularisation of DGDs, traditional stores are finding it difficult to compete, leading to store closures and job losses. Conversely, now is the time for an individual or group to break out into the gaming market free from a publisher. I believe that DGDs are harming employment opportunities for normal people who are just trying to find work while opening up new directions for skilled and talented individuals. These do not balance each other out whatsoever as the talent and skill needed to become successful in the gaming industry is high and the time needed to work on this immense. Most of the time, the only financial gain from becoming an indie developer is after the game has been completed, working for free throughout the entire development process and the financial bonuses only come if the game is successful, which is never guaranteed. 

What does Digital Distribution mean for the average consumer?

DGDs have made it easier to get what we want, when we want, where we want, for the price we like. Yes, the consumer has to deal with unusual and sometimes downright idiotic business practices from the distributor, but generally the consumer is left to their own devices. I believe that DGDs are a positive move forwards for many consumers who have limited access to traditional stores or who wish to access a larger catalogue of games. Games are mostly cheaper which appeals more to lower income households and have made them more accessible to a larger demographic.


















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