Retail. It’s great, right? I mean, the recognition, the possibility for success, the easy advertising; it’s awesome! Publishers can even take care of distribution and advertisement, saving developers from having to bankrupt themselves to produce a game. But wait, what if the game isn’t a hit?
Games that fail commercially are punished by the removal of their only chance to sell, while initially successful games are granted extra shelf life. A game’s fate is almost predetermined by hype, recognition and the current mood of the marketplace. Worst of all, commercial failure leaves a black mark on a developer’s record, which keeps publishers from investing in the next venture.
What happens to these games after they’re removed from store shelves? Well, it used to be that they were relegated to bargain bins, online auctions and, of course, internet piracy. Any way you slice it, the developers aren’t getting a cent, which gives them neither funds for a new project nor financial incentive enough to pursue one.
Over the past few years, though, a new trend has been gaining traction: digital distribution. Using this, old or unsuccessful games have a chance to live on, and the developer gets a cut of the profit. The system’s word of mouth potential helped Psychonauts – initially a tremendous commercial failure that sold fewer than 100,000 copies – rebound into something much less bleak. Positive buzz eventually caused it to reach 400,000 sales, without even counting downloads. The game currently holds an average rating of 9.4 out of 10 on Time Warner’s GameTap, which ties it as the highest rated game on the service, alongside the likes of Planescape: Torment and the infamously overlooked Beyond Good & Evil. “It used to be very final and sad when a game went out of print,” wrote Psychonauts creator Tim Schafer on his company blog, “but now that it can live on through digital distribution, it doesn’t feel quite so dire.”
While this approach can work, some developers have chosen to bypass the retail channel entirely, such as Rare with Jetpac Refuelled. The game broke even within four months of its debut on Xbox Live Arcade and has continued to sell steadily. Jetpac Refuelled is far from the only game to be successful with such a service; sales for Xbox Live Arcade games are somewhere above 25 million, while Nintendo’s Virtual Console service managed 7.8 million sales in less than 12 months. According to Rare’s Nick Burton, Xbox Live Arcade games often experience a sales peak immediately following release, and then stay at a few hundred per day for as long as they remain downloadable. This gives developers “a guaranteed – small, but still reasonable revenue stream that’s constant.”
What Could Be
Picture this: Instead of physically going to a store, all you have to do is go to, say, GameStop.com, pay $50 through your PayPal account, and download a game – any game. Like always, GameStop earns a profit, the publisher gets a return on its investment and the developer gets what’s left over. However, shelf space here is a thing of the past: Every game ever released may be purchased from this one website. It’s an infinite game selection, no longer limited by how difficult it is to “track down” a game, but only by what you feel like playing. And this world might exist sooner than you think.
Why? Because the contemporary middleman is slowly but surely slipping into irrelevance. For example, take the music industry: While the lumbering record giants of old are struggling to stay in the black, iTunes reached its 3 billionth song download after being available for slightly over four years. Groups like Radiohead and Nine Inch Nails have recently made the decision to go without record labels, with the former initially digitally distributing its new album, In Rainbows, for a price decided on by each individual customer. This kind of extremism has yet to be seen in the game industry, but there are tremors, like Valve‘s use of its Steam application to toy with digital distribution. In recent years, the company has even started allowing outside developers and publishers to distribute their games through the service. Doug Lombardi, Valve’s Director of Marketing, doesn’t see it as a replacement for retail, however; in an interview with Computer and Video Games, he called the much-discussed takeover of digital distribution a “myth” and went on to say, “Online is just another sales channel and all outlets benefit from a title being widely available and marketed to as many people as possible.”
For years, independent developers of all kinds have used digital distribution to their advantage; Daisuke “Pixel” Amaya has been releasing his games as freeware on the internet since 1999, and in 2004 released Cave Story after developing it alone for over five years. When asked if he would consider going into commercial development, he said, “If I were to get into commercial development, I worry that I might not be able to create things the way I want to.” On the other hand, developer The Behemoth got its start when Dan Paladin and Tom Fulp – the two guys behind the Newgrounds smash-hit Alien Hominid – teamed up with co-worker John Baez to develop a full version of the game for consoles. Baez told Gamasutra in 2006 that pitching the game to publishers was made easier by its Newgrounds counterpart’s continued popularity. “It really made us believe that even though people really aren’t playing 2D side scrollers anymore, there still might be a market for it.”
Microsoft has tried to tap this market of small, creative developers through its online Xbox Live Arcade store; the aforementioned The Behemoth is even working on a new game for it. While hits like Geometry Wars: Retro Evolved have sprung from the service, the certification process behind Xbox Live Arcade was likened to a “massive, spirit-crushing inertia” by independent designer Jeff Minter, who finished his game, Space Giraffe, four months before it was actually released, thanks to the service’s extensive red tape.
Sony’s PlayStation Network has received praise from some developers, but the company has not yet shown a particular focus on the service’s third-party element, with only a handful of original, independent content available. Nintendo’s upcoming WiiWare, however, has been specifically billed to support the natural agility of indie developers, by only loosely restricting content and openly providing development kits. Karthik Bala of Vicarious Visions, convinced that the service would be a gateway for many small developers, praised Nintendo’s approach in his session at the 2007 RIT Entrepreneurs Conference. With over 100 projects in development for WiiWare, Bala’s statements look like they may have been on the money.
Gaming, Meet Future
There has been speculation that gaming would go digital for years, but only recently has there been a push to make it happen. As more download services spring up almost daily, the possibility of retailers ditching brick and mortar is growing. Before he left Microsoft for EA Sports, Peter Moore said, “Whether it’s five, 10, 15, 20 years from now, the concept of driving to the store to buy a plastic disc with data on it and driving back and popping it in the drive will be ridiculous.”
It could be as long as Moore said, or longer, but when it does happen, it will bring a very interesting new industry. Is there a downside? Sure, there’s no such thing as progress without cost. The feeling of walking into a physical store and browsing its selection is something I personally enjoy, as do many others. But the convenience of an infinite game library seems pretty fun, too, as does the idea of my favorite developers getting more out of the games I like. I’m willing to trade. The question is: Are you?
John Adkins is a freelance writer. He has trouble creating interesting bylines.