&t Phil on Games: The future of game distribution <$BlogMetaData$;

Thursday, August 25, 2011

The future of game distribution

It’s been a year since my last post, so I figured it’s time I throw something up here so my loyal fan(s?) know I’m alive.

This past year has seen the emergence of a new, amazing technology… OnLive! Streaming gaming is the future; no new hardware to buy, and you can instantly access whatever game you want to play without waiting for an installer, or worrying if the game will be compatible. It just works, and works with the push of a button. Most exciting to me is that the OnLive service is hardware agnostic. As long as you have a decent cable internet connection or better, it works. And it works on your computer, laptop, and in more and more cases, is built right into your TV set.

This is extremely important because it finally enables the games industry to have a ubiquitous format, just like DVD’s are/were to the movie industry. While gaming is extremely popular and profitable, it has always been held back by the hardware. You can sell only so many units of a game as there are specific game systems out there. If you know that 30 million people worldwide own an Xbox, you know you can’t sell more than 30 million units… you game MUST have an Xbox to work. If I make a game for a computer, it has to be compatible with the hardware or it won’t work. If I make a DVD movie, it will work on ANY DVD player, regardless of who makes it. OnLive’s technology breaks down the barriers of hardware limitations, and promises a distribution platform that works, in theory, on any internet connected device, just like my DVD movie will play in any DVD player regardless of manufacturer. It means a game published for OnLive has the potential to reach many more customers than any previous game platform.

The main thing standing in its way is the need for a good internet connection to be available in most homes across the world, but I see this barrier braking down more and more each year. I’m not sure if OnLive itself will be the “go to” platform of the future, but the streaming gaming technology they ushered in is undeniably the direction the industry is going. Its reach will decrease price point for the consumer while increasing profits, and eliminates traditional pirating, which will ultimately lead to developers creating more ambitious games they’d previously had a tougher time justifying the costs for.

That being said, I’m still looking forward to playing the huge list of holiday games coming out this year for my PlayStation 3 and Xbox 360 :)


At August 25, 2011 at 12:22 PM , Anonymous Nitzan said...

Assuming this type of service catches on and everyone is using it, what will happen to future console hardware?

I can't see Sony, Microsoft and Nintendo investing money in new hardware if no one is going to buy it.

At August 25, 2011 at 12:55 PM , Anonymous Mike S said...

It's an interesting business model, however for you to make the comparison with the set-top box to a DVD player, it needs to have one important thing: The ability to purchase and play products on the systems you own from any source.

For the set top box to really take off, and not just be "yet another console", it needs to allow owners to buy games from multiple, competitive dealers and not a single company store. Think the online PC gaming market, or even the iPod or Android.

The PSPgo was a dismal failure in no small part due to the fact that you needed to go through PSN for all purchases, which are almost all MSRP, without the benefit of bonuses or extras included in the hard copy. There was little value found in that system. It didn't help matters it cost more than a bundle pack PSP 3000.

That said, what's your take on the OnLive Deus Ex fiasco?

At August 25, 2011 at 1:15 PM , Blogger Philip Cohen said...

@Nitzan: I think that Nintendo is going to stay the course to the bitter end, but I do see a point in the future where they could end up like Sega if they are not careful. They are still far from that at the moment. Sony and Microsoft are sort of wild cards IMOP; they have been pushing their systems ability to expand to offer multiple types of entertainment experiences, and how you interact with them, not just games. It's possible that they would eventually offer their own versions of set top boxes that include an OnLive app, much like they allow Netflix on their systems despite having their own streaming/download movie services. Both companies are moving very heavily into an online services model; it's possible that both will eventually offer their own version of a streaming game distribution service, but I think they would be better served focusing on their unique online platforms and supporting OnLive/GameStop streaming services to help sell their 1st party games. So, in theory, you could play Halo on your PC, PlayStation 4, or Xbox 720 through the OnLive/GameStop app, but each platform would offer some sort of unique services on top of the core game that would sway customers to using their platform. It think this is somewhat of a longshot, but you never know! If they see money to be made, they'll do it. Otherwise, Sony wouldn't distribute their movies on Xbox like they do now.

@Mike: That's what I'm getting at. See my comment to Nitzan above. As for the Deus Ex fiasco, I think that it shows how scared GameStop is of this technology! They have their own version in the works that could be awesome, but we'll just have to see.

At August 25, 2011 at 2:50 PM , Blogger Ray said...

I fear game developers creating walled gardens of their own exclusive content only playable through their own or their partners portals.


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