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The Downsides to Digital Distribution
The gaming industry's ongoing shift from physical media to direct downloads has made buying new titles much more convenient, and in some cases cheaper. However, as this article in The Escapist notes, there are downsides as well, such as an increased dependence on console makers and the inability to sell your used games. Quoting:
"Microsoft and Sony might end up charging publishers an arm and a leg to enable game downloads, especially as they gain more and more control over distribution. Think about it: What if, 10 years from now, 50 percent of software sales for Microsoft's latest console come through Xbox Live? Or, in an even scarier scenario for consumers, what if there is no physical media drive at all, and everything goes through Xbox Live? Sony's marriage to the Blu-ray format ensures its continued support of game discs, but Microsoft has no such restrictions. They could cut console production costs and take control over the entire supply chain in one fell swoop. There would be zero room for publishers to negotiate anything in such a de facto monopoly. The perfect comparison is Wal-Mart. As the world's largest retailer, Wal-Mart is able to demand pretty much whatever it wants of suppliers because it grants access to such large numbers of consumers."
microsoft and sony decide what games already are allowed to be produced. they can't charge too much because if they don't have enough good games, then no one will want the console.
If they had an actual monopoly, do you think the prices would still be low?
Umm... no, it's not. Because of Walmart's bizarre moralizing policies, many creative endeavors end up being curtailed and censored to see the shelves at Walmart. I mean, they censor all the music in their stores! And they don't even always warn you that the album has bleeps! Meanwhile, 10 feet away you can buy the unrated version of Natural Born Killers. I don't get it...
To the haters: You can't win. If you mod me down, I shall become more powerful than you could possibly imagine
As someone who bought two copies of Portal (one standalone, then as part of the Orange Box) and got pissed at the Steam for not letting me give one of the copies away, I sympathize with this. I've already decided that I won't buy stuff on Steam any more unless (like for Portal 2 and HL Episode 3) there's no other source.
They're already at the mercy of the holder of the key for signing games. Unless they want their release restricted to homebrew / modchipped consoles, there would be no difference.
but as a consumer Wal Mart's monopoly is a good thing for me.
Wal-Mart's monopoly is a good thing if you are only interested in cheap imported garbage that breaks down within a year. If you are interested in something better then you'll have to go elsewhere. Hopefully the "elsewhere" didn't close it's doors trying to compete with your friendly slave-labor (from the factory in China to the poor bastard here at home making min wage with no health benefits) depot.....
I want peace on earth and goodwill toward man.
We are the United States Government! We don't do that sort of thing.
With Wal Mart prices are LOWER. Maybe not for companies, but as a consumer Wal Mart's monopoly is a good thing for me.
That is a dangerously short-sighted view. Wal-Mart under charges, creating a false, diminished sense of monetary value of products. Consequently, either the product quality suffers, or the conditions under which the product is manufactured suffer (e.g., factory farms, slave labor).
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Don't game companies still need approval from Microsoft to distribute games in physical media? If so, how would moving to a downloads change that? You still need the same approval you did before.
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Being in control of ones own supply chain isn't being monopolistic or sinister in any way its a natural evolution of business efficiency. Is it evil because middle-men can be cut out? Must we protect those jobs if demand for them is reduced? Lowering costs, we hope, will trickle down to savings for consumers but not necessarily so. In the case of Microsoft I take it many of you aren't optimistic. These poor publishers will need to evolve in the same way required of recording & news print industries.
x box live already charges outrageous amounts for games that came out 10+ years ago.
Some might claim that Disney charges outrageous amounts for films that came out 70 years ago. What makes you think the prices for rereleases on Xbox Live Marketplace and Wii Shop Channel are outrageous?
Consequently, both the product quality suffers and the conditions under which the product is manufactured suffer (e.g., factory farms, slave labor).
Fixed that for you :)
Fixed that for you :)
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Who wants to pay $100+/mo for crappy speeds with spotty service and a 56kbps upload speed? I don't think you'll find too many people willing to shell out that kind of cash.
What I could see is a one-time USB dongle or something that is shipped to you, which you authenticate over your internet connection, then download to your machine.
After that, you just store the thumb drive somewhere, in case your machine dies, and there you go.
Capitalism has a tendency towards monopoly. This was pointed out by Marx in the 19th century, and expanded upon by Lenin
Ah, pointed out by leading thinkers who advocated & implemented the government having a monopoly over EVERYTHING.
Power tends to acquire more power. Better capitalistic power which tends to self-limit by still leaving people choices*, than governmental power which tends to literally kill the competition.
(* - You don't HAVE to buy at Wal-Mart. You CAN get internet access from other sources. You DON'T have to buy health insurance. Etc. ...vs., say, being heavily fined if you _don't_ participate in ObamaCare, or jailed if you try to start a First Class mail service.)
Can we get a "-1 Wrong" moderation option?
The problem with the Marxist/Capitalist debate is (IMO, of course) that both are more or less correct in assessing the weakness of the other system, but each overvalues its own strengths and refuses to acknowledge their own weaknesses.
Advocates of each system essentially base their support on two assertions:
The problem is in the second assertion, not the first.
Personally, I'm fine with digital download replacing media. It is better for the environment and more efficient. I would expect the system to (a) let me sell my key to another person, and (b) let me re-download the data if I need to.
(a) will never happen. With any of the console manufacturers, unless Gamestop decides to make a console, then maybe. (b) might if you're lucky, but think how many hours you will waste re-downloading games when your Xbox720 inevitably breaks.
Another thing that digital downloads will put a stop to is: taking a game over to a friend's house to play. Sure, you could give him your Xbox Live login (or PSN) but that's linked to your credit card. How much do you trust your friend? Also, you'd have to coordinate with your friend the day before, or wait hours for the game to download to his console. And that's if he has enough room on his hard drive. And let's not forget the move towards metered broadband...your friend might not be so keen to download your game if it costs him money.
I wouldn't touch an all-digital distribution system. Convenience is one thing, but there are just too many aspects of console gaming that we take for granted that would disappear. It's bad for consumers.
(-1, Raw and Uncut is the only way to read)
If the claims in the article are anywhere close to reality, then I wonder why they didn't consider the effect on the actual development of games.
Think about companies like EA who rush timelines and overwork their employees already! Now all of a sudden they're presented with a situation where the digital media can be altered at any point by patches and upgrades, and they aren't limited to a "gold" copy of the game. Now, granted, many current games with CD's release patches to improve the flaws in the game, but imagine when all of a sudden greedy companies are given a license to release unfinished games? I could see a world where no one purchases new games for several months, just because it was released unpatched.
You can preach to me forever about how morally wrong it is to shop at walmart, but fact of the matter is, I can fill up a shopping cart for HALF at Walmart compared to any other grocery store. With trips going twice, even three times a month for a family, I am avoiding spending up to $600 a month just by shopping there. I'm sorry, but $600 a month is more value to me (and just about everyone else) than feeling good that I didn't indirectly support some sweat shop.
"When life gives you lemons, don't make lemonade. Make life take the lemons back!" -- Cave Johnson
Capitalism has a tendency towards monopoly. This was pointed out by Marx in the 19th century, and expanded upon by Lenin 95 years ago [marxists.org]. T
I have a broader theory than that. Things tend towards shit over time. The longer the period of time, the greater the likelihood all will be shit. Finally that shit hits the fan, people get mad enough to do something about it, and they put together something that isn't shit; it might even be quite good. But then they relax and time goes on and things start going to shit again.
Capitalism sucks. Marx and his buddies saw that, tried to come up with a better idea. It turned to shit. Capitalism has had a few reversals thanks to the threat of socialism/communism but now that the threat has gone away, things are sliding to shit again.
Microsoft products suck. But some hippies and computer scientists tried coming up with a better idea and Microsoft said "Oh, shit." So they were able to actually reverse the shittification process of the 9x series and came up with Win2k. Brilliant. But then the slide towards shit resumed. Some people liked XP, some people hated it, but everyone hated Vista. W7, a reversal or a further slide down the shit chute? Only time will tell.
So, to somehow get back on topic. Company makes a game machine. It's great. Company gets greedier and graspy and ends up alienating customers, turning to shit. Eventually people won't want to use their shitty products anymore and they go away. Atari exists only as a brand name used by another company. Sega is a shadow of its former self. Nintendo remains but people argue as to whether they've declined or are stronger than ever. Certainly they don't dominate the market as they did in the NES/SNES era. Sony came onto the scene out of nowhere with the PSX, reigned supreme with the PS2, and became an also-ran with the PS3.
It's hard to say what the future will hold but I do think the console makers are lusting after digital distro. The only question is whether the market would bite. I thought Circuit City's Div-X would have been more popular than it was and was pleased when it failed. Will customers make the right choice here?
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The visibility of their product is what sells it, not just the cheaper price point than Sony's offering or their "household name" factor.
To most people, "Microsoft" is what you call Word/Outlook/Excel. "My Microsoft is broken," they'll tell you, then go off to drink a coffee with a name more complicated than "Word."
If Microsoft wishes to retain credibility as a console manufacturer, they either need to do some colossally big marketing of the idea of independence from physical media or they run the risk of falling behind on game sales - the bread and butter of the console gaming market.
Plus, come Christmas time, what is Grandma Mildred going to buy for the kids? A plastic card that they can use via the XBox's digital distribution system tied to mom and dad's credit card which the children or the parents would have to redeem for the nebulous concept of "Points" that the children can then decide how to distribute between the various XBLA offerings? Hell no, she's going to buy them "Wii Carnival Games" or some random racing or sports game for the PS3.
This is not to say that it's impossible to escape from the concept of retail software, only that they need to come up with an effective marketing tool to get people to start thinking of gaming as something that happens on the Internet, not in the home on the box plugged into the TV.
The land shall stone them with the bread of his son.
I've never been impressed with the concept of selling used games. I respect and think that that the right to do so is important, but given how incredibly crappy the return on one's investment is I've never even considered selling a game. Today's used video games are yesterday's baseball cards. I remember the exact same predatory purchasing behavior going on at my local mall in the 1980s. If it could happen without tarnishing our right to resell a game, I'd be more than happy to see this 'business' model fall apart.
Due to the above, I think people shouldn't focus so much on the used game sales and instead consider the net benefit that *might* be had if the physical distribution model went away altogether. First off, no more disc-based DRM schemes. Secondly, buying direct has the *possibility* of driving down prices. Obviously, if Sony, MS, et al decided en masse to keep game prices high they could do so, but they would at least have more flexibility by not being beholden to the retailers. If there's one lesson to be learned from the last several hundred years of product distribution, it's that there's always a better deal to be had by skipping the middleman.
If the publishers did decide to engage in price-fixing, there is a strong argument that could be brought against such behavior. Let's say that a game today sells for $50. Now, tomorrow the physical distribution model evaporates, we're all buying direct, and the publishers refuse to take advantage of the opportunity to undercut one another to gain a competitive advantage. This is obviously not free-market behavior, and the only question that would need to be asked is, "How can you claim to sell something for the same price as you did yesterday, when the distributor and retailer markup is gone?"
The answer to that question, of course, would depend on how strong the gaming publisher lobby is...
Considering that Christmas was a subversion of a pagan holiday, you really don't have much room to complain.
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That's not how monopolies work. If Wal-Mart had an *actual* monopoly, they *could* raise their prices because no one else would be there to undercut them.
In your analogy, it would be like the villain throwing a dead hero back his sword.
However, while Wal-Mart isn't a monopoly per se, it does have some monopolistic attributes which, while probably not illegal, are at least a bit concerning from the consumer's point of view. Wal-Mart is sufficiently large to make demands of suppliers, such as the movies and CDs are (or at least, were, I haven't looked into it recently) edited from their original versions and were no labeled as such. If you're opposed to RFID (personally, I'm not terribly concerned by them, but some are), Wal-Mart is instrumental in getting them into products. Similar happened with the bar code. Wal-Mart demanded all products have a bar code, and thus they became standard everywhere.
Finally, they bully their suppliers to such an extent that they often have to provide products at a price lower than they can afford or not be carried at all. While this generally means lower prices for the consumer, it forces manufacturers to cut costs and cut corners, often by lowering the quality of their products and shipping jobs overseas (e.g., to China). To me, this is the worst thing Wal-Mart does, and is the most invisible. We get products cheaper today by sending our jobs overseas, which sends wealth from the US to China, not to bolster the US economy, but to bolster Wal-Mart's profits. I'm not against profits at all, but there comes a point where someone's right to seek profit causes too much damage to the rest of us to be allowed.
One thing that I really dislike about capitalism is the concept of the race to the bottom. I don't blame the system; I blame the consumers. If you always focus on the cheapest price, you get what the airlines are delivering to us now. Less leg room, poorer service, hidden fees - which is essentially the race to the bottom. If it were not for government oversight (something not typically found in pure capitalism) - we would likely be seeing more planes dropping from the skies - as maintenance is a huge cost to the airlines.
I work with top PC OEMs in product design and market competition scenarios. It is exceptionally frustrating to see how entities like Best Buy make up for the gap in PC sales profits. For the most part, Best Buy (I am picking on them, but they are not the only ones) will sell computers at cost, or sometimes below cost. They order machines which hit a price point (say $499 USD), with a decent processor, but crap parts and low RAM amounts. Because of the volume, there is a lot of competition for an OEM to meet the price point and move machines. Often, they themselves do this at cost, and bridge the gap with 'bundled software' - or trial crapware.
So here is the rub - the OEM is counting on the trial software for profits, and they may make $1 for every app they preinstall, and an additional $5 if the user activates (or purchases) the software. Best Buy, on the other hand, intentionally sold a machine with less RAM than it should have. The machine, therefore, runs slow with the crapware and the lack of memory. Time for an upgrade! Sell the user a couple of sticks of overpriced memory, and charge them $99 for a tech to install the memory (5 minute job) and uninstall the trial software (5 min job, as this can be scripted). That $99 + aftermarket memory is a great place for Best Buy to make their profits on the PC sale - that, and extended warranties and huge markup on cables/printer cartridges. However, part of this process is to remove the software that the OEM is counting on to make their gap.
Again, this isn't the fault of capitalism; but having consumers fixate on the price creates these situations. From my perspective, capitalism is where all parties have created win-win situations; where the buyer pays a fair price for the goods provided by the seller. As soon as the buyer fixates only on the price (such as the situation Walmart creates), then we lose the win-win deal, and likely end up with compromises that negatively impact the buyer long run.
...and then to revert to competition.
Take games consoles. Once upon a time there were several players, which were whittled down to Nintendo and Sega. Nintendo dominates, but Sega is still effective to prevent monopoly. Sony enters. Sony becomes dominant. Nintendo all but falls out. Sega falls out. Microsoft enters. Microsoft removes Sony's dominance. Nintendo re-enters. Sony is now in last place.
The dominant firm has changed hands with every product cycle, and even still the dominant firm has had highly effective competition from the others.
There are monopolies, but usually these fall into one of two categories. Firstly there are monopolies which have been artificially supported by an industry structure imposed by government (e.g. BT in the UK), in other words they are not a failure of the free market, they are a failure caused by government subverting the free market. Secondly, there are natural monopolies which should really be ran by the state because the infrastructure requirements simply do not allow for real competition e.g. water supply.
Occasionally you get other kinds of monopolies, but it's actually quite rare to have monopolistic companies (other than those mentioned above) where consumers are significantly worse off than they would be under competition. For example if there was a thousand little Intel's I'd wager we would have much cheaper, much slower chips - to the point that per unit of computing power we'd actually be paying more. The scale economy which has allowed Intel's monopoly is so great that it benefits the consumer too. Actually that argument defines Intel as a natural monopoly but there is an important distinction between where competition is simply not possible vs. where it is simply not any better.
And then there's Microsoft.
>>>And until then- you suffer from the effects of the current monopolist.
Riiiiight because there are no other places for us to shop then Walmart (cough - Target, Kmart, Meiers, Sears, Boscovs, ...). Pu-leeze if you're going to make an argument, don't make it so easy to refute. There is simply no justification for having government (a far, far worse evil than walmart) to interfere and try to break-up the company.
You need to watch this Penn & Teller video (yes all 25 minutes):
http://www.youtube.com/watch?v=1ZfoNZd_HEk
Walmart Hatred is Bullshit
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