An Online Superstore for Video Games?

by Jordan Yerman | March 6, 2007 at 09:00 am

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Not yet, it would seem. The development costs for games are absolutely huge, on par with major motion pictures. While some designers are able to build an entertaining product and release it online, it won't perform to the standards of serious console users. Delivery is not the only variable in the industry: sure, online distribution is far less expensive than traditional retail, the development costs are the real limit to quantity in the gaming marketplace.

However, I think that expansion would be a major benefit to online distribution: new environments and missions (yeah, I'm thinking about SPLINTER CELL) could be delivered via subscription or something like that, so fans would not have to wait for a whole new game.

I do not work in the gaming industry, nor do I even own a console.

With all three major game consoles now supporting downloadable content, it's easy to envision an iTunes for gamers, with thousands of niche titles to satisfy all tastes. The hard part is making it happen.

Virtually everybody in the video game business is energized about the possibilities of digital delivery. Alex Rigopulos, president of Guitar Hero developer Harmonix, says he is "more excited about (it) than anything else."

"All of a sudden, marketing ... experimental games that don't usually fit in a category, or have a license attached to them, games that are priced at $5 or $10, is going to get a lot more feasible," says Rigopulos. "Because of electronic software distribution, there is going to be a new stratum of indie game development happening that is going to be a breath of fresh air in this business."

Microsoft, Sony and Nintendo apparently agree, as each has launched an online game download service along with their new game machines. The advantages of on-demand downloads for the gamemakers are obvious. Conventional game development can cost millions of dollars, and shelf space is at a premium. If a game bombs, it can drag the publisher down with it.

But online, shelf space is infinite and inventory risk is zero. So gamers will be able to pick and choose not just from a retail store's limited, hit-centric selection, but from a wide range of obscure classics and experimental new designs.

At least, they should be able to. But in reality, and quite ironically, the number of full-blown, disc-based games on retail shelves dwarfs the online offerings for two of the consoles. Microsoft's Xbox 360 has amassed a library of more than 160 game discs since its November 2005 launch, but only 45 downloadable titles are on the Xbox Live Arcade service. On the PlayStation 3, there are 21 games on Blu-ray disc, but only eight in Sony's online store.

Only on Nintendo's Wii does the downloadable catalog outnumber the retail one: 56 to 35. The company's secret: recycling.