Pick up and play

WHETHER as cassette tapes, cartridges or discs, video games have for ever been accessed through tangible media. They may not be for much longer. content, including entire games delivered direct to a via the internet, has significantly changed the way gamers play video games. What’s more, the streaming of games to consoles is set to increase in the same way that streaming movies to computers has taken off (accessing any online streamed form of media avoids having to download it to a hard drive).

Sony, maker of the PlayStation 3 games console, is embracing that path. It recently bought Gaikai, a cloud-gaming company that games to users rather than provide direct downloads, for $380m in the hope of integrating it with its next generation of games consoles. Rumours abound that Microsoft, which makes the Xbox 360 console, may be about to buy OnLive, a similar on-demand video-gaming service. The PlayStation 3 already partly incorporates Steam, which distributes downloadable games, into its interface. Steam sells more than 1,500 games at a shop to 40m customers around the world through computers, consoles and phones.

A large industry exists around downloadable additional content (DLC), which adds extra characters, features and gaming levels to increase the replay value of big-budget console titles. Throughout the first quarter of 2012 $3.4 billion was spent on gaming in the United States, according to figures provided by NPD Group, an industry analyst; $1.38bn—or 41%—of that was spent on digital purchases of games and additional content through services like Steam. Digital sales in Europe were £612.3m ($947m). NPD Group’s Online Gaming 2012 report found that if consumers are presented with a physical and digital product priced equally, 35% prefer the digital download.

In April EA Sports, the developer of the immensely popular FIFA football franchise, released a Euro 2012-themed expansion that was available only as a download. EA Sports claimed that it was demand from gamers that led them to forgo traditional physical retail. “Gamers are growing more comfortable in acquiring content online” believes Liam Callahan, a video-games analyst. Full games streamed entirely over the internet could be the next step for the next generation PlayStation Orbis and Xbox 720 consoles, rumoured to be on sale in time for Christmas 2013.

For content producers, digital is a godsend, since it cuts costs on manufacturing and shipping. Developers can also easily track analytics to better hone their products based on user experiences. The use of digital rights management (DRM) locks on content—as used in the music industry—also prevents piracy, which has been a big problem affecting sales of physical games. Moreover, all those extra levels and characters draw in more revenue.

Digital has its drawbacks for developers and gamers alike, however. Until recently developers had viewed digital content as a safe haven from second-hand physical games sales, from which game makers do not profit. But a recent European court decision could allow gamers to sell on the rights to their second-hand digital content, which again cuts developers out of the equation. Game makers sometimes try to squeeze too many pennies from their customers; earlier this year players rebelled at Capcom for having to pay for downloadable keys to unlock content contained on the “Street Fighter X Tekken” game disc (which they had already paid for). Gamers also contend that the ability to easily release downloadable fixes to problems encourages developers to release games full of glitches without proper testing.

There are pitfalls and benefits to going digital. “Core video game players are a vocal bunch, never shy to voice their unhappiness over a sub-standard product,” explains Anita Frazier of NPD Group. One can be certain that they will have plenty of advice to give developers as they chart the future path of gaming.

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