Digital Distribution: Downloads Take Over

Digital Distribution: Downloads Take Over

Digital distribution’s popularity is building at an impressive rate, but we still don’t associate it with mainstream game distribution. When we think of digital downloads, we think of game patches from the Big Guys, or an indie project from the Little Guys. The meatiest game fare is still found on the shelves of GameStop. But EA recently made a statement that could herald irrevocable changes for game retail.

In an interview published by Gamasutra on March 9, EA Games president Frank Gibeau said that the company’s future may lie in PC game downloads.

“The user base is gigantic,” Gibeau told Gamasutra. “PC retail may be a big problem, but PC downloads are awesome. The margins are much better and we don’t have any rules in terms of first party approvals. From our perspective, it’s an extremely healthy platform. It’s totally conceivable it will become our biggest platform.”

Gibeau cites Asia’s success with free-to-play massive multiplayer online games as a likely outcome for North America’s gaming future. “If you look at the way people play in Asia, PC is the model. I think that free to play model is coming to the West in a big way.”

If EA gradually slides away from the “fire-and-forget packaged goods model” (as Gibeau calls it), will more industry giants be compelled to distribute 50% or more of their offerings through digital services?

That’s a big jump that few publishers want to make right now. It’s doubly true for a company like Nintendo, which spent a chunk of its GDC keynote trying to convince people that retail releases are where the quality is at. However, there are still going to be a lot of eyes turned towards EA for the next couple of years. The company is publishing Facebook games via its Playfish division, and its Star Wars: The Old Republic MMORPG is coming later this year: If any publisher needs to believe in the PC Force, it’s EA.

Even if everything turns out aces for EA’s online investments through 2011 and 2012, it probably still won’t signal a mass publisher exodus from brick and mortar stores. It’s not an easy feat to make major changes to a big game company overnight. A big company has a lot of employees to pay, and hoping that people will spend a dollar on a special cow won’t cover overhead, unless you’re Zynga. Even EA knows its taking a risk–and it’s doing so partly out of necessity. Under-performing games like the 2010 remake of Medal of Honor caused the company’s stock to take a hit.

But EA wants investors to keep the faith, and considers its increased attention to the online market as proof of an impending turnaround. “We will get the stock price back,” Gibeau told Gamasutra. “Our earnings are up. We’re on our way back. … If we hadn’t made the changes we did, if we had just kept iterating game after game, we would be irrelevant and in far worse shape than we are now.”

Nintendo, Sony, Microsoft, Ubisoft, and other major developers and publishers are relatively stable for now; there’s not much point in a secure company whipping out the hacksaw and hammer if nothing’s broke.

That’s not to say stable publishers should feel complacent and treat the downloadable market like an afterthought. There’s no enormous rush to convert every release to a digital format, but it’s foolish to ignore its potential. If EA’s leap to expand its online content is successful, maybe the good news will prod a few slowpokes into beefing up their digital distribution.

About Nadia Oxford
Nadia is a freelance writer living in Toronto. She played her first game at four, decided games were awesome, and has maintained her position since. She writes for 1UP.com, Slide to Play, GamePro and other publications, and is About.com’s Guide to the Nintendo DS.

Leave a Reply