Digital Distribution Isn’t Going To Change Anything, Except The Amount Of Money Publishers Can Make
Digital distribution has been a hot topic for the last few months, ever since the reveal of next-generation consoles. Publishers and console makers are very interested in the concept, where consumers are a little on the fence. There is a very prominent split of those interested in using the approach of download-and-play, and those who are strictly interested in a physical disc with content. Reasons for this vary, chief amongst which is that downloading a 50-gb game is an absolute nightmare for many.
Like it or not, there has been a lot of digital-distribution-creep over the past few years. One leading example of this phenomenon is Downloadable Content (DLC). Over the years publishers have used DLC as a means to not only to offer gamers enhanced and extra content, but to also generate revenue after the initial sale. If you must, DLC is somewhat akin to a blockbuster movie progressing from cinema to DVD. Although there are fundamental–and important–differences, a publisher’s leading way to make extra revenue from games is through DLC. Because of this, the use of such content is widely popular and has been adopted readily throughout the entire industry.
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Most gamers enjoy and appreciate the addition of DLC, however there are certain standards that need to be set and met. Gamers are ready to engage in such practices as long as they feel that they are not being shafted by ‘The Man’. This means that as long as DLC can offer new, unique and exciting content, there is a good chance it will be bought. When publishers try to sell off DLC content that is loaded onto the disc itself (Capcom, that’s you), a protest is actually expected. It is obvious to see when and how DLC will infuriate gamers.
I believe that it is safe to assume that DLC is therefore good, but can be equally bad for both the gamer and publisher. How can a publisher predict this sort of thing, though? I believe that it is simple, and emerges from the development of the game itself. DLC loaded onto the disc is usually done so because developers were able to complete the game as well as extra content before the deadline of the game. Subsequently, extra content could be added to the disc. Alternatively, developers were not able to meet the deadline to add such content to the game, however they were able to do so before the discs were sent for replication. Therefore, it can be added. But at a cost to the consumer.
Another, and better use of DLC is addable content that actually creates and increases the original experience. This is what I would call “the right way of doing DLC”. This is also the practice that gamers are ready to engage with.
Keeping the aforementioned digression in mind, we can firmly see that the concept is a very important aspect of the gaming industry. Moreover, DLC is actually proof that the gaming industry is inadvertently moving digital without gamers even realising it. DLC, as the name states, is purely digital–and should be (Capcom, looking at you again).
Gamers have shown that they are willing to invest in DLC and that they are willing to download. I absolutely understand that DLC is a far smaller download compared to a full game, however it is a start. And that is all it takes.
To further enhance the point that digital is more prominent than we think, companies such as Electronic Arts have reported that DLC, mobile and the web has generated more revenue than the standard brick-and-mortar type approach–that is, physical discs.
EA recently posted $482 million in revenue for digital content, a few million greater than the $467 enjoyed by physical distribution. While there is no breakdown of what the digital content entails, the company did say that DLC and mobile were the greatest contributors. And again, that is enough to say that this movement is a start. Sure–it may not replace the physical approach entirely (nor should it), it is more prominent than the consumer thinks and knows.
Another contributing factor to increased revenue is the free-to-play approach. This essentially means that the publisher is able to maximise revenue continuously, through continuous purchases of in-game items, usually things such as tokens and revenue to spend in-game.
With a basic understanding of all of this, here is the catch. Just because games are seemingly possible to go digital, it does not mean that prices will and are going to drop. It is cheaper for a publisher to distribute content digitally than it is physically. Physical incorporates a lot costs, such as that of discs, packaging, delivery, and so on. Digital requires a server. The consumer bears most of the cost in terms of bandwidth used.
That being said, digital distribution is not only becoming increasingly prominent in the market, it can also increase the amount of revenue that a publisher can potentially make. Publishers are able to maximise their profits through such a practice, and while gamers are outraged that such a practice was put forward by companies such as Microsoft, gamers are inadvertently leading the future down this very path. The approach, however, should be handled with caution because digital distribution comes with its own inherent problems–and that is enough to limit gaming and what gamers can do, tremendously.
In essence, digital distribution is not going to change much. Gamers are going to do what it takes to play games, whether or not it takes them a week to download. There will be all sorts of grievances, however in the end it will work out. Publishers, though, will exacerbate this issue by charging the same price for games regardless of whether they are digital or physical copies. The reason for pricing remaining the same, even though digital is cheaper, is that companies will charge whatever the market can bear. And that is basic, and I believe, smart economics. Unless bandwidth issues become seriously problematic, the price of digital will probably continue to match that of physical.