Are Gamers Ready To Lose Their Discs And Choose Digital Distribution?

Over the last few years, digital content distribution and cloud-gaming have become quite commonplace within the game industry as well as with gamers. Services like Steam, Onlive, Direct2Drive, XBox Live Marketplace, PlayStation Network, Origin, and most imporantly the iOS App Store have found their audiences within the masses. Due to increased competition and availability of game download/streaming services, companies like Blockbuster, Best Buy, Rogers Video and other physical retail/rental businesses have either suffered immensely or outright claimed bankruptcy.

Do these signs signal the end of the physical game disc?

If so, are consumers ready to switch over to all digital distribution for their games? Should the next generation of game consoles even require disc-based games?

As a hardcore gamer and a disc-collector myself, I am both excited and fearful for  the day when the physical media dies off in order to make way for all-digital copies.

I’m excited to play my games on all of my digital content players, whether it be on the TV, on the PC, on my tablet, and even on my phone. I’m excited to be able to play the game at midnight on launch day without having to line up next to a folks who may or may not mug/stab me for my money and my new game disc. I’m excited to purchase a game that will never be sold out no matter the date (sold-outs happen way too often for big-name titles where I live). I’m excited to purchase and play the games in the comfort of my own home. Oh and I wouldn’t have to deal with space-eating disc cases, special edition boxes (that aren’t that special since the publishers printed about a million copies of it for less than what it actually sells for.)

But at the same time, I’m not quite sure that people are ready to give up disc-based gaming. There’s something about going to the store and purchasing that physical media (disc) that gives us a sense of ownership.

Also, as long as companies like Gamestop, The Source, and others offer game trade-in services for older titles, it’ll be a while before the physical copy dies off. Think about it, if you’re a college/university student with a limited budget for games, would you purchase a digital copy of a game over a physical copy – one that you can easily trade in for credits towards other games at a later date?

Then there’s the issue of data storage. While storage isn’t much of a problem for PC gamers (since its much cheaper and easier to purchase Terabyte-sized HDD’s these days), console gamers are still quite limited by the storage space allotted to them by their console manufacturer. Sure they can upgrade, but how costly would it be to upgrade to a larger hard-drive over just buying the $59.99 disc-based game?

Credit: http://www.elasticpath.com/

Also, what of the issue regarding monthly internet download caps? Depending on the country, (and the telecom companies within who’ve entrenched themselves through various monopolies) gamers’ game-downloading/streaming activities may be limited by their ISP’s speed, bandwidth, and monthly internet download caps. Can you just imagine how much your internet bill will be after purchasing and downloading a few NextBox and PS4 copies digitally? And that’s not even including all the bandwith you ate up with movies you streamed on Netflix, Hulu, Crackle and other video services.

Interestingly, even with all these issues, customer-planned spending on digital downloads is on the increase. On a recent survey by digital commerce company Elastic Path, out of 505 US adults questioned 73% planned to spend more money on downloads in 2011 as compared to 2010. As well, they’ve found that most consumers want to try the games before they buy. Hence Electronic Arts’ recent (successful) partnership with Gaikai’s try-before-you-buy business, as well as the success of the Onlive cloud gaming service, where every game can be demoed for a limited time before purchase.

*Read more of Elastic Path’s research report here.

Credit: http://www.elasticpath.com/

So what do game industry executives think of going all-digital?

A few months ago, Shuhei Yoshida, the President of Sony Computer Entertainment Worldwide Studios discussed what his company felt about the digital distribution trend in an interview. He believed that the consumer base is (at the time of the interview) divided between those who are ready for the change to all-digital and the ones that aren’t. And maybe the timing isn’t quite here yet.

Remember, Sony tried delivering an all-digital download game platform with the PSP GO. The idea was quite sound, no need for discs, no need to line up and buy physical copies, and no need for pesky SD cards. Yet the system didn’t sell like hotcakes like they originally thought it would. Consumers still wanted to have their physical discs over digital copies.

According to Yoshida:

“We believe the time is still not right to go download-only as a platform. Some PS Vita titles, like Uncharted: Golden Abyss, will be close to 4GB in size, which could be too large to download for consumers 
who do not have a fast broadband connection. Also, some consumers like shopping in retail stores, talking to knowledgeable store clerks, buying and playing games on the spot. We do not want to remove that capability from consumers.”

In the end, while many companies like Steam, Direct2Drive, Origin, and Onlive have made their service digital delivery friendly and future-proof, it looks like – for the time being- there will still be a place for the physical discs. Consumers the world over face many issues that limit their ability to go all-digital (storage, ISP monthly cap, disc trade-in services etc.) that will take some time time to be resolved.

Game console manufacturers have recognized this and is currently not pushing the trend on its customers; instead, they are offering digital distribution as an alternative way for gamers to purchase their games.

However, that also doesn’t mean that the next generation of game consoles will be reliant on disc-based games. Who knows, maybe the PS4 or even the NextBox will eschew discs for the immediacy of game streams and/or downloads.

And with that I pose this question to you, the reader:

Do you think consumers and the game industry are ready to go all-digital?

Share your thoughts, ideas, and comments in the section provided below.