We were promised the Future, but are we there yet?
For decades, we as gamers have come to accept a few simple premises:
- You buy a game, you own the game.
- At the relinquishment of being able to play said game, you can lend it to a friend so they can play it.
- When you’re done with a game, you can sell or trade it in for cash or credit.
Easy to understand this ideal has been the backdrop for physical games the world over since the inception of home gaming. While the likes of Online Passes (EA & THQ) or Story DLC locked behind a code (Batman: Arkham City & Rage) have tried to shuffle that principle back against the consumer; many of these policies have either been utterly repealed or at least scaled back to a more respectable and less obtuse level.
When the Xbox One was originally announced many a year ago now, there was an uproar and an outcry at Microsoft’s confusing and convoluted announcement that the Xbox One was going to be locking pre-owned games to preselected retailers and requiring a daily connection to the internet all in order to take the average gaming consumer “into the future”. Gamers spoke out vehemently against allowing so much control to be centralised purely through Microsoft by removing the majority of the retailers from the equation, meanwhile Sony delivered a refreshingly witty response to the situation.
There are a great many number of reasons for the overwhelmingly negative response towards Microsoft’s plans for a heavily DRM, heavily digital, heavily restricted Xbox One from the gaming community; faith and trust in Microsoft not being the least of that. Clearly they were building a console for the future, but in the present, before it’s time. Timing has always been one of the most crucial aspects when instigating new policies, technologies and ideas out upon the open marketplace; too late and you lose money, ground and recognition to competitors, too soon and you place the cart before the horse and run the risk not only getting nowhere, but also falling flat on your face as evinced by the reaction from the gaming community.
Timing is important, but so too is what you are offering as a service to your consumer. Of utmost importance are advantages they get for taking your new-fangled system over that which they know and understand, that which they have used for decades! The advantages of digital download over physical are present, but not absolute. You can never lose or break the disc which is great, but should you lose your account for any reason, such as breaching the Terms & Conditions of the company providing said account, your purchases are forfeit, completely, totally, utterly and irrevocably. Some games can become delisted over time which makes it impossible to acquire if it’s not already downloaded to your console. You’ll never get an early delivery of an eagerly awaited game, but with preinstalling, you can often have the game ready and waiting to play on the day of release. The term “swings and roundabouts” very much defines the process of Physical vs Digital. Consoles seem to be lagging far behind Steam with regards to the pricing of individual games and sales they offer, but both the Playstation 4 and Xbox One offer a decent Game Sharing system with one other person through the Home Account option. It would be interesting to wonder quite how many of the Digital Sales were only completed because of this capacity to get two digital copies of a game for two separate consoles through one single purchase. My guess is that it would be far lower than otherwise.
Whenever a new business concept is created, there is always at least one forerunner; a pioneer taking a risk or two in the search of a fledgling market. For the (no longer) emerging market of Digital Download, this pioneer is Steam. Even console-only gamers are well aware of Steam as a service which, as well as offering digital downloading of games, also offers multiplayer connections, video streaming and social media features. The legendary sales, the ease of use, the sheer quantity of games available on the download only service and the capacity for Indie Devs to get their work green lighted, Steam truly has it all! And to the victor, the spoils! Valve has made an obscene amount of money creating this service and has expanded it greatly with its own OS and hardware.
I’ll not get into the whole “Master Race” vs “Console Gamers”, but it is safe to say that PC users have been at the tip of the spear of new technology and the best available output in terms of performance and graphics… If you’re willing to spend the money. It’s expensive to be the best, but for some people it’s genuinely no choice at all, some want to be the best, like no one ever was. Those people help drive and steer the market towards greatness with their excessive expenditure and for that, we salute them! What these individuals experience, the ‘average’ PC gamer may enjoy three years down the road, and console gamers possibly three years after that, if at all.
Bar mayhap Activision and EA, there are few third-party publishers that have as much of an impact on the industry as Ubisoft, especially after their stunning E3. While numbers with regards to digital downloads have not been forthcoming from the likes of the aforementioned EA and Activision, Ubisoft have given us some information that has raised a fair few eyebrows:
Ubisoft has released their full sales and earnings figures for 2016-17, and most of the numbers are really boring and on target. The total annual sales were €1 459.9 million, up 4.7% year on year, in line with the target range of between €1 455.0 million and €1 495.0 million. But it’s where that money came from that is where things get interesting.
According to the PR I’ll now copy and paste from my email, the company made “€729.3 million in digital revenue, representing 50.0% of total sales (32.0% in 2015-16)”. Plus, there was a “131.2% surge in Player Recurring Investment to 304.0 M€”. In case you don’t realise, here’s why you should care.
In the space of a year, digital revenue has gone from being just under a third of Ubisoft’s income to half. Traditionally, publishers relied on retail outlets, distributors and the games media to serve as gatekeepers, helping consumers find and buy their products. Now, the landscape has changed – publishers can interact directly with their potential clients online. In fact, buyers can learn about a title, purchase and start playing all without being required to put on outside appropriate clothing. The convenience level is incredible for consumers, but it’s also changing the balance of power publishers have with retailers and distributors.
If you glazed over at the talk of percentages and target figures, I’ll highlight the really important line that has relevant context to this article:
In the space of a year, digital revenue has gone from being just under a third of Ubisoft’s income to half
A third to half of their income in a year… A year! For major companies that operate with calculated forecasts, prognosticated projections and expansive estimations, the kind of growth in the digital download market is nearly unheard of in such a short space of time (yet, it is important to note, that it is still completely in line with their overall sale projections for the year). It’s hard to make understate how much of a benchmark this moment is, a watershed moment for the industry, although not quite comparable to the high-flying success of Valve’s unrivalled Steam.
So here we are, one foot in the future and one in the past. It’s too late to turn this ship around, though the aforestated outcry most certainly caused a shifted gear for a few more years, dragging the heels may be the way to go if we want be continue with what we are comfortable with, but here’s the question: what do we actually want? Some gamers will want things exactly the same as they have been offered for the past thirty years, and will decry as evil any semblance of change to the accepted format: the Luddite. Others may be open and acclimatised to the nature of an evolving industry and will understand that while change is an inevitability, they’ll be seeking to secure certain aspects that have worked well for the consumers in the past; the Middle Ground. And then there are those that wish to be in the future, aware that it is inexorably inescapably, and to even resist it is to fail to understand the economic laws at play here. The idea that outdated and anachronistic ideas have no place in a ‘cutting edge, technologically driven industry’: the Technocrat.
While there is no right or wrong opinion, it is important to realise two things:
- The future, digital download, is going to happen whether we want it or not.
- Any industry not backing efficiency with regards to its primary method of distribution is backing a lame horse in the long run.
This is the key point that needs to be addressed, again and again until it is common knowledge: Making the disc, case and shipping the physical game to every retailer that sells it is an anachronism in today’s age when such a better option exists and the infrastructure is present. Far less efficient that the digital download option. Now, I love physical media and prefer to buy something I can hold, and subsequently sell off if I do not like it, but I appreciate that it’s not for the good of the industry long-term. Yes, the gaming world can survive ‘just fine’ with the physical model only, but is it really worth it not being all it could be deeper way in order to keep the capacity to buy games rather than licences?
Ultimately, it’s down to the money spending consumer to determine the success or failure of the industry, what do you want to see? Let us know in the comments section below!