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FEATURE: Digital Distribution

Ben Parfitt
FEATURE: Digital Distribution

Many would have you believe that the death of the disc is inevitable.

Global internet penetration is still rising and the range of content that people can download is expanding, to the extent where practically every device with a screen has access to some form of digital distribution.

We have already seen it sneak up on and dominate the music industry, and films are now following suit.

But games firms have always been experimenting with the downloads market. While consoles have only boasted such services for the last five years or so, the PC has allowed users to download everything from partial content to full titles for at least a decade.

Today, the pioneering platform is embracing the digital age as its allocated shelf space on the High Street becomes increasingly limited. Sure, disc-based blockbusters for PCs may still be available in stores, but are we approaching the tipping point?

“The PC is at a crossroads,” says Mastertonic MD Andy Payne, whose firm forms one half of GetGames, the digital joint venture between the publisher and Eurogamer.

“PC is both a brilliant, open platform to develop for and, thanks to its lack of ‘straight out of the box’ gaming, often frustrating for the consumer. But it is the biggest digital platform in the world, outside of Apple.”

SPREADING THE WORD

By targeting a core PC audience – the early adopters of digital distribution – leading portals such as Steam and Direct2Drive defined what people expect from a downloads service. But recent years have seen this demand spread to a wider market.

“Digital distribution is catching on with the general consumer,” says Anders Emblad, CEO of digital distributor Ztorm.

“Download speeds and the general internet penetration across all territories are increasing. The ease of use with new technologies makes it less of a hassle and less ‘technical’ for the consumer.”

Crucially, reaching a mass audience will give the PC’s digital transition the momentum it needs. And it will replace physical product as the norm. Many point to the music industry as proof that downloads can dominate.
Throw in the rising culture of connectivity in people’s daily routine and social lives, and the market is already there for people to forsake discs altogether.

“The masses don’t buy CDs from retail any more, do they?” observes Andrew Eades, executive director at Buzz! developer Relentless.

“Games stores are currently destination stores – the people that shop in them already know what they are there for.”

Distributor Sony DADC also offers a range of digital services. The firm’s head of digital sales Matthew Hatton adds: “Billions of people are online every day, most of them for hours surfing Facebook and other social platforms on both PC and mobile devices, to stay in touch with all their friends.

“They already spend a significant time each day on entertainment products, so finding more ways to get their attention on games is therefore key for further growth.”

And digital retailers have noticed a dramatic change in the way that both consumers and publishers view their business model, deeming it to be more relevant than ever before.

Last month, EA even claimed it wanted ten of its franchises to each generate $40m in digital revenue in the near future.

Direct2Drive’s head of international digital distribution Paul Herron says: “We’ve seen a seismic shift in attitudes towards digital distribution from both consumers and the industry itself.

“We’re also seeing many of our publishing and developing partners strengthening their teams to take full advantage of digital distribution – it’s becoming their main outlet for PC releases. Digital is now at the centre of any launch strategy, no longer an afterthought or luxury.”

THE POWER OF THE APP

Fuelling this shift is the growing acceptance of downloads. The term ‘download’ is no longer a deterrent to the less tech-savvy consumers, thanks in no small part to a certain family of devices.

“Apps for iPhone and iPad have helped transform digital distribution – for many mass-market consumers it’s no longer scary to purchase online,” says Herron.

“Our file sizes are larger than those on smartphone, but we’re working hard to make the experience as easy as possible.

“We’re also trialling a games rental system which allows consumers to purchase the title at a reduced rate if they want to continue playing. This is a new way of encouraging gamers to sample PC content they may not have previously tried.”

Ztorm agrees that experimenting with the business model will be crucial to driving the medium forward.

“Game rentals, subscription plans and the three-screens principle are exciting for expanding acceptance of digital distribution,” says Emblad.

While there is still plenty of work ahead to establish downloads as the de facto format across all gaming platforms, some believe the first major milestone on this road is closer than you think.

“This will be the year that digital overtakes physical releases on PC – as it’s now the only way gamers can really get what they want – be it a triple-A blockbuster, unique indie game, or the latest casual release,” says Herron.

RETAIL’S ROLE

It’s quite a claim, but not an unfeasible one. Of course, the only true way to establish if digital distribution has vanquished PC retail will be the advent of digital charts – something UKIE is working frantically to bring to fruition.

That’s not to say that retail’s days are numbered, of course. Bricks and mortar stores will always serve a purpose – even if that purpose changes in the next decade or so.

In the short term, boxed and digital will be uncomfortable bedfellows, but some are confident this relationship will improve.

Mastertronic’s Payne adds: “Digital distribution can co-exist with retail, but whether it actually does will remain to be seen. Key to this is the structural changes both in terms of the medium and in terms of retail that are taking place.”

Meanwhile, others have more unusual – but no less plausible – visions for the future of games retail.

“I see a future where shops are more like showrooms,” says Eades. “There will be no need to store large quantities of stock but you will still need to demonstrate and show off your products.

“I think Apple pretty much there. You can go into an Apple store, try the Mac you are thinking about buying and even order it from the store display model. As for software, the best place to sell will be in the virtual store on the device it has been developed for.”

The importance of digital distribution is undeniable, and it will be up to retailers to adapt to consumers’ changing needs. But there will always be a need for outlets in which consumers can buy hardware and, for a time, software.

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Tags: Distribution , video games , Digital

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