Digital distribution in video games

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In the video game industry, digital distribution is the process of delivering video game content as digital information, without the exchange or purchase of new physical media. This process has existed since the early 1980s, but it was only with network advancements in bandwidth capabilities in the early 2000s that digital distribution became more prominent as a method of selling games. Currently, the process is dominated by online distribution over broadband internet.

The video game industry is the economic sector involved in the development, marketing, and monetization of video games. It encompasses dozens of job disciplines and its component parts employ thousands of people worldwide.

Digital distribution is the delivery or distribution of digital media content such as audio, video, software and video games. The term is generally used to describe distribution over an online delivery medium, such as the Internet, thus bypassing physical distribution methods, such as paper, optical discs, and VHS videocassettes. The term online distribution is typically applied to freestanding products; downloadable add-ons for other products are more commonly known as downloadable content. With the advancement of network bandwidth capabilities, online distribution became prominent in the 21st century, with prominent platforms such as Amazon Video, and Netflix's streaming service starting in 2007.

Internet access individual connection to the internet

Internet access is the ability of individuals and organizations to connect to the Internet using computer terminals, computers, and other devices; and to access services such as email and the World Wide Web. Internet access is sold by Internet service providers (ISPs) delivering connectivity at a wide range of data transfer rates via various networking technologies. Many organizations, including a growing number of municipal entities, also provide cost-free wireless access.

Contents

To facilitate the sale of games, various video game publishers and console manufacturers have created their own platforms for digital distribution. These platforms, such as Steam, Origin, and Xbox Live Marketplace, provide centralized services to purchase and download digital content for either specific video game consoles or PCs. Some platforms may also serve as digital rights management systems, limiting the use of purchased items to one account.

Steam (software) Video game platform

Steam is a video game digital distribution platform developed by Valve Corporation. It was launched in September 2003 as a way for Valve to provide automatic updates for their games, but eventually expanded to include games from third-party publishers. Steam offers digital rights management (DRM), matchmaking servers, video streaming, and social networking services. It also provides the user with installation and automatic updating of games, and community features such as friends lists and groups, cloud saving, and in-game voice and chat functionality.

A video game console is a computer device that outputs a video signal or visual image to display a video game that one or more people can play.

Digital rights management (DRM) tools or technological protection measures (TPM) are a set of access control technologies for restricting the use of proprietary hardware and copyrighted works. DRM technologies try to control the use, modification, and distribution of copyrighted works, as well as systems within devices that enforce these policies.

Digital distribution of video games is becoming increasingly common, with major publishers and retailers paying more attention to digital sales, including Steam, PlayStation Store, Amazon.com, GAME, GameStop, and others. According to study conducted by SuperData Research, the volume of digital distribution of video games worldwide was $6.2 billion per month in February 2016, [1] and reached $7.7 billion per month in April 2017. [2]

The PlayStation Store is a digital media store available to users of Sony's PlayStation 3, PlayStation 4, PlayStation Vita and PlayStation Portable game consoles via the PlayStation Network. The store offers a range of downloadable content both for purchase and available free of charge. Available content includes full games, add-on content, playable demos, themes and game/movie trailers.

Game (retailer) British video games retail company

Game Digital plc is the parent company of Game Retail Limited, a British video game company that trades under the Game brand, stylised as GAME.

GameStop Corp. is an American video game, consumer electronics and gaming merchandise retailer. The company is headquartered in Grapevine, Texas, United States, a suburb of Dallas, and operates 5,830 retail stores throughout the United States, Canada, Australia, New Zealand, and Europe. The company's retail stores primarily operate under the GameStop, EB Games, ThinkGeek and Micromania brands.

History

1980s

Before internet connections became widespread, there were few services for digital distribution of games, and physical media was the dominant method of delivering video games. One of the first examples of digital distribution in video games was GameLine, which operated during the early 1980s. The service allowed Atari 2600 owners to use a specialized cartridge to connect through a phone line to a central server and rent a video game for 5–10 days. The GameLine service was terminated during the video game crash of 1983. From 1987 to 2003, Nintendo's Japan-only Disk Writer kiosks allowed users to copy from a jukebox style of rotating stock of the latest games to their floppy disks. They can keep each one for an unlimited time, and play at home on the Famicom and Famicom Disk System for ¥500, then about US$3.25 and 1/6 of the price of many new games. [3] [4] [5] :75-76 It was called "truly ground-breaking for its time and could be considered a forerunner of more modern distribution methods [such as] Xbox Live Arcade, PlayStation Network, and Steam". [6]

GameLine was a dialup game distribution service for the Atari 2600, developed and operated by Control Video Corporation (CVC). Subscribers could install the proprietary modem and storage cartridge in their home game console, accessing the GameLine service to download games over a telephone line. GameLine had an exclusive selection of games, and its pioneering business model eventually gave rise to America Online.

Atari 2600 Video game console

The Atari 2600, originally branded as the Atari Video Computer System or Atari VCS for short until November 1982, is a home video game console from Atari, Inc. Released on September 11, 1977, it is credited with popularizing the use of microprocessor-based hardware and games stored on ROM cartridges instead of dedicated hardware with games physically built into the unit. The 2600 was bundled with two joystick controllers, a conjoined pair of paddle controllers, and a game cartridge: initially Combat, and later Pac-Man.

Telephone line single-user circuit on a telephone communication system

A telephone line or telephone circuit is a single-user circuit on a telephone communication system. This is the physical wire or other signaling medium connecting the user's telephone apparatus to the telecommunications network, and usually also implies a single telephone number for billing purposes reserved for that user. Telephone lines are used to deliver landline telephone service and Digital subscriber line (DSL) phone cable service to the premises. Telephone overhead lines are connected to the public switched telephone network.

1990s

Only a few digital distribution services for consoles would appear in the 90s. Among them were Sega's Sega Meganet and Sega Channel, released in 1990 and 1994 respectively, providing Sega Genesis owners with access to games on demand and other services. Nintendo released peripherals and services only in Japan: the Satellaview satellite subscription service for Super Famicom and the Nintendo Power flash cartridge in-store kiosk system for Super Famicom and Game Boy.

Sega Japanese video game developer and publisher and subsidiary of Sega Sammy Holdings

Sega Games Co., Ltd. is a Japanese multinational video game developer and publisher headquartered in Tokyo. Its international branches, Sega of America and Sega Europe, are respectively headquartered in Irvine, California and London. Sega's arcade division, once part of Sega Corporation, has existed as Sega Interactive Co., Ltd. since 2015. Both companies are subsidiaries of Sega Holdings Co., Ltd., which is in turn a part of Sega Sammy Holdings.

Sega Meganet, also known as the Net Work System, was an online service for the Mega Drive in Japan and later Brazil. Utilizing dial-up Internet access, Meganet was Sega's first online multiplayer gaming service, and functioned on a pay to play basis. The system functioned through the use of a peripheral called the Mega Modem and offered several unique titles that could be downloaded, and a few could be played competitively with friends. In addition, it shared technology and equipment with more serious services such as the Mega Anser, used for banking purposes. Though the system was announced for North America under the rebranded name "Tele-Genesis", it was never released for that region. Ultimately, the Meganet service would be short-lived, lasting approximately a year before it was discontinued, but would serve as a precursor to the Sega Channel and XBAND services, as well as a predecessor to online gaming services for video game consoles. Retrospective feedback praises the attempt by Sega to introduce online gaming, but criticizes the service for its logistical issues and lack of titles.

Sega Channel online game service

Sega Channel was an online game service developed by Sega for the Genesis video game console, serving as a content delivery system. Launching in December 1994, Sega Channel was provided to the public by TCI and Time Warner Cable through cable television services by way of coaxial cable. It was a pay to play service, through which customers could access Genesis games online, play game demos, and get cheat codes. Lasting until July 31, 1998, Sega Channel operated three years after the release of Sega's next generation console, the Sega Saturn. Though criticized for its poorly timed launch and high subscription fee, Sega Channel has been praised for its innovations in downloadable content and impact on online services for video games.

On PCs, digital distribution was more prevalent. In the late 1980s and early 1990s, prior to the widespread adoption of the internet, it was common for software developers to upload demos and shareware to Bulletin Board Systems. In most cases, demos or shareware releases would contain an advertisement for the full game with ordering instructions for a physical copy of the full game or software. Some developers instead used a licensing system where 'full versions' could be unlocked from the downloaded software with the purchase of a key, thereby making this method the first true digital distribution method for PC Software. Notable examples include the Software Creations BBS and ExecPC BBS, both of which continue to exist today - albeit in a very different form. Bulletin Board systems however were not interconnected, and developers would have to upload their software to each site. Additionally, BBSs required users to place a telephone call with a modem to reach their system. For many users this meant incurring long distance charges. These factors contributed to a sharp decline in BBS usage in the early 1990s, coinciding with the rise of inexpensive internet providers.

Shareware is a type of proprietary software which is initially provided free of charge to users, who are allowed and encouraged to make and share copies of the program. Shareware is often offered as a download from a website or as a compact disc included with a magazine. Shareware is available with most computer software. Shareware differs from open-source software, in which the source code is available for anyone to inspect and alter; and freeware, which is software distributed at no cost to the user but without source code being made available.

ExecPC is an online service provider started in 1983 by owner Bob Mahoney as the Exec-PC BBS. It quickly grew to be one of the world's largest bulletin board systems in the 1980s and throughout the 1990s, competing with the likes of Compuserve and Prodigy.

Modem Device that modulates an analog carrier signal to encode digital information

A modem is a hardware device that converts data into a format suitable for a transmission medium so that it can be transmitted from computer to computer. A modem modulates one or more carrier wave signals to encode digital information for transmission and demodulates signals to decode the transmitted information. The goal is to produce a signal that can be transmitted easily and decoded to reproduce the original digital data. Modems can be used with almost any means of transmitting analog signals from light-emitting diodes to radio. A common type of modem is one that turns the digital data of a computer into modulated electrical signal for transmission over telephone lines and demodulated by another modem at the receiver side to recover the digital data.

In the mid 1990s, with the rise of the internet, early individual examples for digital distribution under usage of this new medium emerged, although there were no significant services for it. For instance, in 1997 the video game producer Cavedog distributed regularly additional content for the Real-time strategy computer game Total Annihilation as internet downloads via their website. [7]

Also, users used the internet to distribute their own content. Without access to the retail infrastructure that would allow them to distribute this content through physical media, user-created content such as game modifications, maps or fan patches could only be distributed online.

2000s

By this time, internet connections were fast and numerous enough such that digital distribution of games and other related content became viable. [8]

Consoles

The proliferation of internet-enabled consoles allowed also additional buyable content that could be added onto full retail games, such as maps, in-game clothing, and gameplay. This type of content, called DLC (Downloadable content), become prevalent for consoles in the 2000s.

PC

An early innovator of the digital distribution idea on the PC was Stardock. In 2001 Stardock released the Stardock Central to digitally distribute and sell its own PC titles, followed by a service called Drengin.net with a yearly subscription pay model in summer 2003. In 2004, the subscription model was substituted by TotalGaming.net which allowed individual purchases or pay an upfront fee for tokens which allowed them to purchase games at a discount. In 2008, Stardock announced Impulse a third-generation digital distribution platform, which included independent third-party games and major publisher titles. [9] The platform was sold to GameStop in May 2011. [10] [11]

The period between 2004 and now saw the rise of many digital distribution services on PC, such as Amazon Digital Services, GameStop, Games for Windows – Live, Origin, Direct2Drive, GOG.com, GamersGate and several more. The offered properties and policies differs significantly between the digital distribution services: e.g. while most of the digital distributors don't allow reselling of bought games, Green Man Gaming allows this. [12]

In 2004 the Valve Corporation released the Steam platform for Windows computers (later expanded to Mac OS and Linux) as a means to distribute Valve-developed video games. Steam has the speciality that customers don't buy games but instead get the right to use games, which might be revoked when a violation of the End-user license agreement is seen by Valve [13] or when a customer doesn't accept changes in the End-user license agreement. [14] [15] Steam began later to sell titles from independent developers and major distributors and has since become the largest PC digital distributor. By 2011, Steam has approximately 50-70% of the market for downloadable PC games, with a userbase of about 40 million accounts. [16] [17] [18]

In 2008, the website gog.com (formerly called Good Old Games) was started, specialized in the distribution of older, classical PC games. While all the other DD services allow various forms of DRM (or even have them embedded) gog.com has a strict non-DRM policy. [19] Desura was launched in 2010. The service was notable for having a strong support of the modding community and also has an open source client, called Desurium. [20] Origin, a new version of the Electronic Arts online store, was released in 2011 in order to compete with Steam and other digital distribution platforms on the PC. [21]

2010s

Mobile gaming

Digital distribution is the dominant method of delivering content on mobile platforms such as iOS devices and Android phones. Lower barriers to entry has allowed more developers to create and distribute games on these platforms, with the mobile gaming industry growing considerably as a result. [22]

Console gaming

Today, each of the current main consoles (Nintendo Switch, Xbox One, and PlayStation 4) has its own digital distribution platform to sell games exclusive to digital formats and digital versions of retail games. These are the Nintendo eShop, Xbox Live Marketplace, and PlayStation Store, respectively. Microsoft's Xbox Live Marketplace, Nintendo's eShop, and Sony's PlayStation Store all sell full retail games, along with other products, such as DLC.

Implications

The main advantages of digital distribution over the previously dominant retail distribution of video games include significantly reduced production, deployment, and storage costs.

Digital distribution also offers new structural possibilities for the whole video game industry, which, prior to the emergence of digital media as a relevant means of distribution, was usually built around the relationship of the video game developer, who produced the game, and the video game publisher, who financed and organized the distribution and sale. The heightened production costs in the early 2000s made many video game publishers avoid risks and led to the rejection of many smaller-scale game development projects. [23] Gabe Newell, co-founder of Valve, the developer and intellectual property rights owner of Steam, described the disadvantages of physical retail distribution for smaller game developers as such:

The worst days [for game development] were the cartridge days for the NES. It was a huge risk – you had all this money tied up in silicon in a warehouse somewhere, and so you’d be conservative in the decisions you felt you could make, very conservative in the IPs you signed, your art direction would not change, and so on. Now it’s the opposite extreme: we can put something up on Steam, deliver it to people all around the world, make changes. We can take more interesting risks.[...] Retail doesn’t know how to deal with those games. On Steam [a digital distributor] there’s no shelf-space restriction.

Since the 2000s, when digital distribution saw its first meaningful surge in popularity, an increasing number of niche market titles have been made available and become commercially successful, including (but not limited to) remakes of classic games. [24] [25] The new possibilities of digital distribution stimulated the creation of game titles from small video game producers like independent game developers [26] [27] and modders (e.g. Garry's Mod [28] ), which before were not commercially feasible.

Indie game development

The increasing prevalence of digital distribution has allowed independent game developers to sell and distribute their games without having to negotiate deals with publishers. No longer required to rely on conventional physical retail sales, independent developers have seen success through the sale of games that normally would not be accepted by publishers for distribution. [29] The PC and mobile platforms are the most prominent in regards to independent game distribution, with services such as GOG.com, GamersGate, Steam and the iOS App Store providing ways to sell games with minimal to no distribution costs. Some digital distribution platforms exist specifically for indie game distribution, such as the Xbox Live Indie Games.

Buyer advantages and disadvantages

Compared to physically distributed games, digital games like those offered on the Steam digital distribution service cannot be lost or destroyed, and can be redownloaded at any time. Services like Steam, Origin, and Xbox Live do not offer ways to sell used games once they are no longer desired, even though some services like Steam do have family sharing options. [30] This is also somewhat countered by frequent sales offered by these digital distributors, often allowing major savings by selling at prices below what a retailer is able to offer.

In contrast to physically distributed games, digital games can be easily purchased immediately, without leaving home. This way, gamers have immediate access to the games. [31]

Examples of video game digital distribution systems

Current

Obsolete

See also

Related Research Articles

History of video games aspect of history

The history of video games goes as far back as the early 1950s, when academic computer scientists began designing simple games and simulations as part of their research or just for fun. At M.I.T. in the 1960s, professors and students played games such as 3D tic-tac-toe and Moon Landing. These games were played on computer such as the IBM 1560, and moves were made by means of punch cards. Video gaming did not reach mainstream popularity until the 1970s and 1980s, when video arcade games and gaming consoles using joysticks, buttons, and other controllers, along with graphics on computer screens and home computer games were introduced to the general public. Since the 1980s, video gaming has become a popular form of entertainment and a part of modern popular culture in most parts of the world. One of the early games was Spacewar!, which was developed by computer scientists. Early arcade video games developed from 1972 to 1978. During the 1970s, the first generation of home consoles emerged, including the popular game Pong and various "clones". The 1970s was also the era of mainframe computer games. The golden age of arcade video games was from 1978 to 1982. Video arcades with large, graphics-decorated coin-operated machines were common at malls and popular, affordable home consoles such as the Atari 2600 and Intellivision enabled people to play games on their home TVs. During the 1980s, gaming computers, early online gaming and handheld LCD games emerged; this era was affected by the video game crash of 1983. From 1976 to 1992, the second generation of video consoles emerged.

Family Computer Disk System add-on for the NES video game console

The Family Computer Disk System is a peripheral for Nintendo's Family Computer home video game console, released only in Japan on February 21, 1986. It uses proprietary floppy disks called "Disk Cards" for cheaper data storage and it adds a new high-fidelity sound channel for supporting FDS games. Its name is sometimes shortened as Famicom Disk System or simply Disk System, and abbreviated as FCDS, FDS, or FCD.

A regional lockout is a class of digital rights management preventing the use of a certain product or service, such as multimedia or a hardware device, outside a certain region or territory. A regional lockout may be enforced through physical means, through technological means such as detecting the user's IP address or using an identifying code, or through unintentional means introduced by devices only supporting certain regional technologies.

A console game is a form of interactive multimedia entertainment, consisting of manipulable images generated by a video game console and displayed on a television or similar audio-video system. The game itself is usually controlled and manipulated using a handheld device connected to the console, called a controller. The controller generally contains a number of buttons and directional controls such as analogue joysticks, each of which has been assigned a purpose for interacting with and controlling the images on the screen. The display, speakers, console, and controls of a console can also be incorporated into one small object known as a handheld game.

A PC game, also known as a computer game or personal computer game, is a type of video game played on a personal computer rather than a video game console or arcade machine. Its defining characteristics include: more diverse and user-determined gaming hardware and software; and generally greater capacity in input, processing, video and audio output. The uncoordinated nature of the PC game market, and now its lack of physical media, make precisely assessing its size difficult.

Video game packaging refers to the physical storage of the contents of a PC or console game, both for safekeeping and shop display. In the past, a number of materials and packaging designs were used, mostly paperboard or plastic. Today, most console and PC games are shipped in (CD) jewel cases or (DVD) keep cases, with little differences between them.

Independent video game development, or indie game development, is the video game development process of creating indie games; these are video games, commonly created by individual or small teams of video game developers and usually without significant financial support of a video game publisher or other outside source. These games may take years to be built from the ground up or can be completed in a matter of days or even hours depending on complexity, participants, and design goal.

Xbox Games Store is a digital distribution platform used by Microsoft's Xbox One and Xbox 360 video game consoles. The service allows users to download or purchase video games, add-ons for existing games, game demos along with other miscellaneous content such as gamer pictures and Dashboard themes.

In the video game industry, an indie game or independent video game refers to those games typically created by individuals or smaller development teams without the financial support of a large publisher, in contrast to most "triple-A" games. The term may also refer to those games financed by publishers who do not exert significant creative control on the developers. Because of their independence and freedom to develop, indie games often focus on innovation and taking risks not usually afforded in triple-A games, and may explore the medium to produce unique experiences in art games. Indie games tend to be sold through digital distribution channels rather than at retail due to lack of publisher support. The term "indie game" is synonymous with that of independent music or independent film in those respective mediums.

Downloadable content (DLC) is additional content created for an already released video game, distributed through the Internet by the game's publisher. It can either be added for no extra cost or it can be a form of video game monetization, enabling the publisher to gain additional revenue from a title after it has been purchased, often using some type of microtransaction system.

Nintendo Entertainment System 8-bit third-generation home video game console developed and released by Nintendo in 1985

The Nintendo Entertainment System (NES) is an 8-bit third-generation home video game console produced, released, and marketed by Nintendo. It is a remodeled export version of the company's Family Computer (FC) platform in Japan, commonly known as the Famicom, which was launched on July 15, 1983. The NES was launched in the test markets of New York City and Los Angeles in 1985, with a full launch in the rest of North America and parts of Europe in 1986, followed by Australia and other European countries in 1987. Brazil saw only unlicensed clones until the official local release in 1993. In South Korea, it was packaged as the Hyundai Comboy and distributed by Hyundai Electronics which is now SK Hynix; the Comboy was released in 1989.

GamersGate AB is a Sweden-based online video game store offering electronic strategy guides and games for Windows, OS X, and Linux via direct download. It is a competitor to online video game services such as Steam, GOG.com, Direct2Drive, and Impulse.

GOG.com video game platform

GOG.com is a digital distribution platform for video games and films. It is operated by GOG Sp. z o.o., a wholly owned subsidiary of CD Projekt based in Warsaw, Poland. GOG.com delivers DRM-free video games through its digital platform for Microsoft Windows, OS X and Linux. In March 2012, it began selling more recent titles such as Alan Wake, Assassin's Creed and the Metro Redux series, among many others.

Alawar software company

Alawar is a Russian company engaged in developing, distributing and publishing video games for PC, mobile platforms and other devices.

Platform exclusivity (also known as console exclusivity refers to the status of a video game being developed for and released only on certain platforms. Most commonly, it refers to only being released on a specific video game console or through a specific vendor's platforms

A home video game console, or simply home console, is a video game device that is primarily used for home gamers, as opposed to in arcades or some other commercial establishment. Home consoles are one type of video game consoles, in contrast to the handheld game consoles which are smaller and portable, allowing people to carry them and play them at any time or place, along with microconsoles and dedicated consoles.

Microsoft Store (digital) digital store

Microsoft Store is a digital distribution platform sponsored by Microsoft. It started as an app store for Windows 8 and Windows Server 2012 as the primary means of distributing Universal Windows Platform (UWP) apps. With Windows 10, Microsoft merged its other distribution platforms into Microsoft Store, making it a unified distribution point for apps, digital videos, digital music, and console games. e-books were included until 2019. Some content is available free of charge from the store.

Rainway is a video game streaming service. Rainway allows users to run games on their PC and play them on other devices over an internet connection. The beta launched on PC on January 20, 2018. The final release launched on January 31, 2019.

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