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Dec 23, 2004



I think part of the reason why people love packaging is that in a lot of cases the game box packaging and the manual are also works of art, and a printed manual is also far easier to refer to while playing online than task-switching between your game and manual reader program.

Also, software is a product with an intangible form that is purchased. For people to feel they received their money's worth, they need a tangible product to hold that came from the publisher's CD presses and not one's CD writer. With a pressed CD and decent box art, the gamer feels 'I paid money for this piece of art'. With a home-made archive disc of a downloaded installer, the gamer doesn't feel anything particularly special about it since it looks like any other archive disc in the library.

I don't think downloads will completely replace retail, at least not until most people are comfortable with paying for something intangible and mass-produced like software.


Agree with Abel.

To add to this, when you buy a digital download for a service you're buying, well, a service - a promise of service delivery. It takes a more services-oriented mindset and marketing to more effectively sell these.

When you sell a 'service in a box' to an unwitting consumer the service component goes largely ignored, thus when the box really turns out to be empty and contain a promise of service delivery the expectation/experience already starts on the wrong foot - while the initial service experience is always critical, this is a case where it is simply *crucial*, or the consumer will not make the leap form the tanglible-goods to service.

I'd like to take the opportunity to point out that service *end* is also a very critical time where *more* care must be taken. Even if the consumer has already decided to end the contract, the closure of the experience must be simply stellar. ... At least if you expect to ever see this customer buying from your brand again. Refer to the Earth and Beyond closure for a shining example of how to NOT do a service closure associated to an established brand.


Seems to me that Half-Life2 broke the retail barrier. With time, I'd expect to see more.

Runescape may also count. Their last press release had them well over 150k paying, and approaching 2 million users--no retail SKU in sight.


Eve Online still relies mostly on client downloads, i believe. At > 500 mb (if recollection is correct), these are not trivial downloads - yet at 50k subscriptions, must be enough folks out there willing to do it, although I think they offer CDs for those requesting them. Would be interesting to know how many folks take 'em up on offer of CD.


It's certainly possible to get to a good audience without a retail deal, as illustrated by Runescape and others (although Eve had a box launch first). I don't really buy the 'box in the hands makes people feel good' thing. With our retail deal we're adding another distribution channel -- namely, Walmart and Target -- where we think our potential audience congregates. I still believe that the future of MMP distribution, even in the fairly short-term (next couple of years) is firmly online.

On this subject, Blizzard's use of bittorrent is very interesting.


If you take a glance to the left, under 100k Group Europe, Runescape is a browser-based java applet that is, naturally, download only. The 'digital distribution trick' here might be that the download (and indeed, basic gameplay) is free, and membership/subscription gives access to more content and member-only, ad-free servers. The other part may be that the browser takes care of the downloading/installation details for you, so perhaps that helps as well.

Unless, of course, ones definition of 'big-selling' only looks at the initial sale, and disregards subscriptions - which, I think, misses an important economic point. Money is fungible; whether it is gotten up-front or over the life of a subscription, it's all still revenue from the game.

(BTW, I've been playing RS for a year, half that as a member.)

Never go on an adventure without a hat!


The interesting twist on the whole 'we're going to all be digital someday' is that the size of content is growing. As the video cards become more capable and CPUs speed up, the amount of texture and model data it takes to represent an avatar grows. It will take larger and larger downloads to get the client on the machines, which means it will take more and more patience on the part of the player to get into your game.

Guild Wars is doing some interesting stuff in this area. They're trying to keep the initial download small, and have you download new art as you encounter it.

The other thing about CDs that is nice is install speed. If after a year of play, you decide to change machines, it's nice to stick in a disk and have it install quickly, as opposed to download another 500 mb download. Both UO and SB put the entire clients in their expacks, to offer that hidden benefit to expansion purchasers.

Last but not least, the hidden psychological part of a box sale is that people commit more time and effort in trying to 'get' a game when they pay $40 dollars for a box than when they get a free download. If you're playing a demo, it's very easy to let yourself walk away in frustration, whereas if you've plocked down $40 bucks, you're more likely to keep trying. Given that we depend not on the $40 bucks but rather on the steady revenue stream of the monthly subscription, that psychological twist gets a lot of people to a part of the game that's sticky for them.

Do players feel the same psychological impetus to try, try again when they've payed $40 bucks but don't have a box on their desk (a.k.a. full digital download, not a demo)? Good question. I don't know if we know the answer to it yet.


Runescape has already been mentioned so I'll be brief: I, as a fairly seasoned computer user, have nightmares about hard drive failures, bandwidth bills and reinstallation problems. Download-only has so many negative connotations; I like to have a CD on my shelf, just in case. Somehow, burning my own doesn't have that extra edge.


Ren Reynolds posted - While a bunch of niche games such as ATITD are download only, all the big shots come in boxes.

Yes, but computer store shelves only have enough space for 3-4 big shot MMORPG boxes at a time.

Here are some thoughts I posted about the subject early in the year. The full blog is on http://www.mxac.com.au/drt/TroubleWithExplorers.htm. I edited these to be more appropriate to the discussion:

Distributing on-line comes with a heap of problems though:

Renting vs. buying - To a customer, on-line distribution feels more like renting than buying because a) they don't actually get anything to hold, and b) as you'll see later, on-line distribution practically forces you to create a pay-as-you-play model.

How much are people willing to pay for a rental? A lot less than a purchased product. People will pay $20 for a DVD, but are only willing to pay $5 (or less) to rent it. Does that mean that people willing to pay $50.00 for an off-the-shelf game will only be willing to pay $15.00 for the downloadable version?

Narrow-band - Most of the world is serviced by traditional 56K modems. Even people with broadband will find a 5GB DVD-sized download overwhelming. For on-line distribution to work, an online VW must be (relatively) small.

Reducing a VW's download size is a large task. The texture maps, 3D models, sounds effects, recorded speech, and cut scenes increasingly require more and more CD-ROMs in the package. To produce a VW small enough to download, developers may need to replace many hand-painted texture maps with procedural ones, use more procedural models, reduce the number of sound effects, use text-to-speech with transplanted prosody, and animate cut-scenes on the fly.

Ultimately these changes will reduce the visual and acoustic quality of the game. Players won't be willing to spend as much money without the eye candy. The $15.00 price-point might drop to $10.00 or even $7.00. (The only bright side is that the lower-quality graphics will reduce development costs.)

Bad purchases - Before I purchase a game I read reviews of the game to see if it will interest me. Even with that, I still "toss out" half the games I buy. Within an hour of opening the box I know that I don't like the game. The only reason I persist is because I just paid $50 for the game and I'm going to get as much enjoyment out of the game as I can, even if it bores me to death; I usually give up after about 10 hours of play. On-line players will give up before their trial-period ends.

Therefore, if I had a chance to try a demo of every game first, I'd buy half as many games. If other players are like me then games distributed on-line would sell half as many copies as they would through retail.

The only up-side to the equation is that free demos can catch players that wouldn't be willing risk $50 to try the game, but who end up liking it and are willing to pay for it. I suspect this is a false hope: Of all the games I've played from demo CDs or downloads, I have only bought one or two.

No commitment - When someone pays $50 to play a game but doesn't like it, they're going to stick with it for at least a few hours before giving up in disgust. (In my case it's about 10 hours.) However, when someone downloads a demo game, they don't have $50 of expenses that they feel compelled to "enjoy". Consequently, if the player's attention is not grabbed within an hour (sometimes 10 minutes), they're lost.

What does this mean? A retail virtual world has approximately 10 hours to get the player hooked, so that they'll sign up for a further 20 months. A downloaded virtual world has only 1 hour.

Just browsing - Once software can be downloaded for free, you'll also get "browsers" who download the game even though they don't expect to pay for it. Shareware software has a browse-to-buy ratio of 20:1 to 100:1. If an adventure game is a 1GB download, 20GB - 100GB will be downloaded for every copy sold. If bandwidth rates are $1-$3 per gigabyte there isn't much hope of making a profit.

Browsers cost money because downloads cost money, and their calls/E-mails to customer support cost money. To minimise these costs an online adventure game must be a small core that downloads on demand, and downloads the bulk of its data when the user pays.

Piracy - Piracy affects every game.

Retail games experience three forms of piracy: 1) Organized crime that makes and sells 10's to 100's of thousands of copies; while not common in the US or Europe, such piracy is very common in Asia. 2) Friends making copies for friends. 3) People selling or giving away the game once they're finish. (Item 3 is technically not piracy, but it has the same effect.) I haven't heard recent piracy statistics for the software industry, but the music industry estimates a 40% loss of revenue due to piracy. Rod Humble, in an article for Game Developer Magazine (May 2004), mentions that one retail game with a free online component had seven pirated copies for every copy sold.

When a game is small enough that it can be downloaded, pirates have a feast. I have never heard piracy rates for shareware (aka: downloadable games), but rates are intuitively much higher than software that's too big for a download. Just look at the popularity of (illegal) music downloads to get an idea.

Luckily, there is a solution to this: An interactive experience cannot be pirated if important parts of the content are safely stored (and guarded) on a remote server. Anyone can pirate Everquest's client. They can't get hold of the server software or content though, so to play Everquest, a person must pay SOE money. (This is a bit of lie. It is possible to reverse engineer the Everquest server, but the user-experience won't be the same.)

Lower prices might have one advantage here: If customers are paying less money for a product, they generally expect less customer support. (This is not always the case. While working at McDonalds in high school, I encountered people that would whinge like crazy when their 59 cent coffee was too warm or too cold.)

Advertising - If a game is only distributed online, advertising is more difficult. Retail games are advertised in magazines, internet-sites, etc. They are also "advertised" by their mere presence in a game store. Online distribution misses this second form of advertising.


While most the comments previously made are good, I feel that we are missing out on one component that may be extremely important.

Let’s imagine that Blizzard had sufficient resources to take on an unlimited amount of World of Warcraft customers on the day of launch.

Let’s also imagine they did not artificially prevent non-US/.AU/.NZ players from playing on the servers located in the United States.

Blizzard sold out their entire stock of World of Warcraft in the matter of days, 250,000 copies in 24 hours -- forcing potential customers to scour from store to store attempting to obtain a copy of the next coming, many unsuccessful. Sold out.

These are customers that will not care if they need to download a copy of the game, nor would they care if they initially do not have a boxed copy of the game, nor are they particularly interested in the game manual -- hey, this can be acquired at a later time. They do not necessarily have an extreme interest in this game, heck, many of those who purchase games at the initial launch date put value to the fact they are there the first day.

By not allowing players of this category, those who will buy a game – any game – only due to the game being hyped up out of all proportions by excellent marketing, community action or whatnot, to get a piece of the action, you will not only have higher initial sales, you will also keep the momentum your marketing campaign has built up.

I will use one example of this momentum:

Star Wars: Galaxies. Released in the US late Q2 2003, selling a significant amount of copies due to a good marketing/community building campaign, thus reaching a substantial subscriber base. This product was not released in Europe at this time. The European market was hyped up by this community building at the same time the NA market was hyped up. What happened?

The game was released in Europe early Q4 2003, struggling to reach 1/10th of the North American subscribers.

Why? The market lost interest. The game was no longer fresh. It was spoiled – others had already been there once, twice and three times. Why explore already known territory? Neil Armstrong was the first person on the moon. A good portion of MMOG players want to be Neil Armstrong in their fantasies, the one going where no one has gone before him. Who cares about going to the moon if everyone else has been there?

Back to Blizzard.

What would the initial copies sold during the first week be if the game was accessible to every potential customer in the world while the game was hot? There was not one single MMOG player (or anyone else with interest in games, for that matter) who did not talk about the game the first week.

What if the game was accessible through a download from Day 1, accessible to the entire world through a relatively small download (2-3gb is not excessive in these days) with a credit card payment when it was hot stuff on everyone’s lips?

I can see several probable benefits:

1) Increased initial sales by ensuring there will be enough copies available, regardless of demand.
2) Retaining the momentum – the more customers you have, the longer the topic will stay hot, the more copies you will sell over time (given the launch is smooth)
3) Worldwide launch may occur at the exact same time, eliminating the risk of running the fate of SWG in Europe, which also will increase overall initial and long-term sales
4) Decreased distribution costs -- cutting off production, shipping and retail cost

This is not risk-free, especially when we all rely on monthly subscription fees as the main source of revenue. If a launch is not successful, the long-term effects may be as drastic (or, heavens forbid) worse on the game as Anarchy Online – a beautiful, extremely competitive game for its time which never reached is potential due to the publisher not realizing the implications of a large scale launch.

That being said, I strongly believe this is the way of the future – boxed retail sales concurrent with downloadable copies of the game (ala Half Life 2), reaching the entire world at the exact same time, and thus retaining the incredibly important momentum built by a successful marketing and community building campaign.

That is all.


I bought City of Heroes online - no box here. I believe Lineage 2 was available a similar way. I also recently signed up to Anarchy Online, and while there's no purchase involved (core game is now free, whee), I downloaded the client.

I bought EQ2 in a box, which was a shame, but understandable given the sheer quantity of data involved. I signed up for DAoC a while back, and I'm pretty sure I downloaded that, 'cause I can't find a box for it nearby (only played a little while, then quit - only so many addictions I can manage at once ;). Oh, and Planetside, which I downloaded to play - never seen that in the shops at all, and it's a damned fine little shot-em-up of an MMO :)

That's a pretty mixed bag right there. I think digital distribution is appearing pretty quickly, and definitely the way of the future - as an option. I don't think it'll ever be download-_only_ - why would you cut out a potentially lucrative distribution method like shops, and restrict your game to only those people with broadband, effectively? - but it's certainly becoming more of an option for those of us with the bandwidth to use it.



I stumbled across two polls recently that reminded me of this thread. The first, on mmorpg.com asked:

“How would you rather obtain your online game?” with the options and results as follows:

In a retail box from a store -- 49%
A digital download – 51%

The poll results state that 3081 people had taken the poll.

The second poll was at the web site for Dark and Light (www.darkandlight.net). Their questions was:

“How do you wish to get the game?” with the options and results as follows:

Peer to Peer – 9%
Direct Download – 71%
Online Shop -- 3%
Retail box in shop – 14%
CD/DVD in a magazine – 2%

The poll results state that 5743 people had taken the poll.

In terms of analysis, I would say that both polls were fielded to what would be called a “hardcore” mmog audience (D&L is in beta). Also, both polls do not explicitly state any benefits of using a particular channel over another (such as say, a price discount). Given that D&L is a European product the increased popularity of direct download may be a comment on the European retail channel. In either case, digital download seems to be an attractive option to these survey respondents and, given the considerable savings to the developer, I would expect to see this option only increase in usage.


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