Online Distribution: Game Retailing may be Changing

You know the drill. When the latest game comes out, you've got to have it right away. You go on down to your local game retailer, fight the masses of geeks, and finally rest your hands on that must-have title. But there is a considerable amount of overhead involved with the current system. The game discs must be pressed, the booklets must be printed, and the entire package must be shipped to retailers. Once they are in the store, they still suck up money because the store must be heated, lit, and staffed. The cost adds up quickly and the expenses are passed along to consumers (that's you).

Another alternative has developed significantly in recent months. Online game distribution systems that allow gamers to download their games directly to their PC (or console in the near future) may become the new standard for acquiring software. Several solutions have already been introduced into the market such as Direct2Drive, TryGames, and a unique one--Steam. We spoke to Valve Software, the developer of the Half-Life series, as well as Sarbakan, a Canada based production studio about the possibility of a major trend.

Valve Software's Steam is an advanced content distribution system complete with anti-cheat and anti-piracy features that serves over 5 million users. Valve's Doug Lombardi explained why the need for Steam was clear. "As online gaming grew, it was obvious that things such as auto-updating and more sophisticated anti-cheat measures were going to be requirements," he said, "We couldn't find an existing solution for these issues, so we started development internally." And develop they did.

Steam now allows third-party developers to get in on the online distribution goodness. Games like Darwinia are taking advantage of Steams full featured platform. But Valve is ready to admit that “brick and mortar” stores will be the main outlet for videogames for a while. "I think there will always be customers who like to buy products at a store and customers who would prefer to purchase products directly--and some who will do a little of both," Mr. Lombardi said. "For us, we see the additional services offered through Steam as benefits for both retail and online customers."

Steam’s approach is rather unconventional. Systems like Direct2Drive and TryGames have customers browse their website find the game they are looking for, pay for it, and proceed to download the game to their local computer. Sarbakan, a Canada based production studio, takes advantage of online distribution through TryGames. Guy Boucher, President of Sarbakan, spoke to gmrblogs about the company's decision to distribute online--and what they've discovered in the process. "We believed that this new distribution model would allow developers more liberty and the greatest latitude," he said, "We were convinced that this market would open up and allow for the distribution of different game types - other than casual games - and help in launching new original intellectual properties." But now Sarbakan has second thoughts. "We have come to the conclusion that this new distribution model is still emerging and is not solid enough yet to be the main mean of distribution for action/adventure type games."

When it comes down to it, many gamers will probably get some games online and some from retail stores. But it’s hard to pass up the convenience and cost-effectiveness of streaming games over the Internet. In the end, the future of online game distribution is in your hands.