Digital Distribution: Laughing All The Way To The Bank

archonwarp

This was definitely influenced by the recent "Why Does Bandwidth Cost Money" thread, but I think it's important enough to merit its own thread.

Since C&C 3 still hasn't arrived at the local stores, I thought about buying it from EA's Digital Download service. The problem is that its still $50 bucks, the same price as if I were to obtain a physical copy with a manual, cool cover art, and a DVD. In addition to that, buying a physical copy of the game and registering with a service like Steam or (hopefully they do this) EA gives you the ability to digital download at any time (such as if I had lost the disc, or if I'm on vacation and don't have it with me). With the two gigs of bandwidth costing them $0.15 at most, don't you think it's wrong for them to charge the same price?

Let's face it, you're cutting out A LOT of middlemen:

1) The factory that presses the discs (and the one that prints the cover art)
2) The People who drive the trucks to send the goods your merry way
3) The stores that sell the items and stock these items.
And that's not including the sleazy guys who take their cut that are involved...

Each of these people gets their piece of the pie, yet, when removed, all of this extra money goes to the publisher and the consumer is paying the same amount for less goodies. Add that to the fact that things stay at full price on Steam, or other digital distribution centers, longer than they do at the store, often with less content than what a sale-copy at the store might have (Half Life 2 original release, anyone?), and I can't for the life of me figure out how this makes sense.


vs


And that's just a quick example of something. I would rather own a Limited Edition physical copy, with a bunch of cool features, than a digital download, provided I'm paying the same price. This kind of stuff is common place.


Why hasn't anyone spoken up yet? We know that we're getting burned, yet we continue to support this. Don't get me wrong, I love the fact that we're moving into digital distribution, since it's a much better way to go, but why are we as gamers expected to pay more for less? It seems that all we could do is either boycott their unfair practice, or write them angry letters. Boycotting would only hurt the newly-growing medium, which is not something I want to do, and angry letters will be ignored. So I ask you all: What can we do?

Kreutz

After my recent experiences with EA Link (and those of others, last night in the Vent chat) I'm not so sure we should be so quick to get rid of physical media altogether. Even if I could (theoretically) purchase a game for $10 cheaper through a digital service as opposed to a box on a shelf, I'd still rather pay the $10 for the box. I can install the game as many times as I want without asking the company for permission. The CD doesn't demand my ID every time I play. I don't have to run an extra program in the background, or be subject to service blackouts if the provider's servers crash (Steam). Most importantly, when I plop down my $50 for the game in a store, it's mine, right then and there, and the store can't double-charge me or charge me for something I didn't receive, as happened to me with BF 2142 and EA Link.

tl;dr : Whether or not digital distribution is cheaper is irrelevant so long as the service itself sucks.

archonwarp

I agree with you on that, though I've only experienced one steam-outage in my time. My thing is that I'd rather see the developer, not the publisher, getting the money. Even if the publisher gets extra money from something like this, give some more to the developers too! As was talked about by Tycho in the news post, used games, in addition to the practices of certain shady stores, take more money away from the developers. Rather than keeping them starved to the point where they have to put adds in games that i pay for, wouldn't it be a little bit cooler if they could get some extra profit? I mean, where is that extra $3 to $15 going whenever one switches from physical to digital copy?

DiannaoChong

I find it amazing that normally the physical money hardly hits the devs for the 50$ pricetag, now the developer house is selling it straight to the fans for 50$ and there reaping tons o cash it seems to me without a publisher........ (in fact there was a big deal with vivendi and valve.... er i think it was vivendi who sued valve for releasing HL2 another way)

Valve needs to offer like 30% discount for preordering, and I would find that acceptable, but right now the digital distribution costs are too much for the margin they have t obe making off of it.

FreddyD

You don't have to pay tax so technically you are getting about a 10% discount.

twmjr

DiannaoChong wrote: »

snip
(in fact there was a big deal with vivendi and valve.... er i think it was vivendi who sued valve for releasing HL2 another way).

Vivendi did sue Valve for trying to distribute their games via Steam while they had an agreement to distribute them. The result was that Valve wasn't allowed to sell the games for less than retail, IIRC. I wouldn't be surprised if the reason for the same-as-retail pricing schemes are a combination of this and...well, let's face it, the stuff you get in a physical distribution isn't worth all that much. Yes, you're cutting out middlemen and packaging stuffs, but the main cost of the games is in the development, marketing, etc. No matter what distribution method they still need to pay for that stuff. Is the cost of digital distribution method lower? Most likely, but I'd guess it's not by much.

DiannaoChong

Thats a good point, i didnt think about an agreement with your publisher to not be able to sell for less then the MSRP. it gives an excuse..... but still its very lame


I also hope we haven't gotten to the point where people would assume if they could get HL3 for 30$ online, that there was lack of quality of the game, and expected a 50$ retail or they wouldn't buy it.

archonwarp

twmjr wrote: »

DiannaoChong wrote: »

snip
(in fact there was a big deal with vivendi and valve.... er i think it was vivendi who sued valve for releasing HL2 another way).

Vivendi did sue Valve for trying to distribute their games via Steam while they had an agreement to distribute them. The result was that Valve wasn't allowed to sell the games for less than retail, IIRC. I wouldn't be surprised if the reason for the same-as-retail pricing schemes are a combination of this and...well, let's face it, the stuff you get in a physical distribution isn't worth all that much. Yes, you're cutting out middlemen and packaging stuffs, but the main cost of the games is in the development, marketing, etc. No matter what distribution method they still need to pay for that stuff. Is the cost of digital distribution method lower? Most likely, but I'd guess it's not by much.

Bullshit. That's what they want you to think, but if you trace production back, I can bet you that its a complete sham. How much are developers getting whenever you buy the game off the shelf? $0.50 and the chance for another contract with the publisher? It's not a fair cycle, and rather than just giving up and accepting it, we should do something about it. Consumers have a lot more power than corporations want us to believe; just look at some of the things that have happened in the past, based solely on consumer groups.

DiannaoChong wrote: »

Thats a good point, i didnt think about an agreement with your publisher to not be able to sell for less then the MSRP. it gives an excuse..... but still its very lame


I also hope we haven't gotten to the point where people would assume if they could get HL3 for 30$ online, that there was lack of quality of the game, and expected a 50$ retail or they wouldn't buy it.

By no means am I expecting that, but how do they figure that it's okay to charge the same amount for something when so much of the middle-man is removed? I didn't even know about the deal with HL2, which makes a lot of sense, but I don't think it's right that the publisher pockets all of this extra money, especially if they aren't going to throw anything extra in for the developers.

Kreutz

It's the same as it is with digital music, where the artists usually get the shaft even when people download their music legally. What the games industry needs is an iTunes, which Steam could be if they could grow some balls and tell the industry how it is. Steve Jobs could do this with iTunes because his iPod was the de facto portable music player, but Steam doesn't have this magnitude of pull.

emnmnme

Well, if I had to guess, digital distribution isn't as proven as buying games at Wal-Mart or wherever by a long shot. Since it's riskier I bet publishers jack up costs to cover any potential losses. It's kinda like how the drug companies say it costs $800 million to produce a new medicine but really more than half of that estimate goes to possible losses of projects they could have taken if they weren't developing that particular pill. So if Big Pharma can dream on what might have been instead of what it actually costs, game publishers can do the same and pass the costs to consumers. "While it is cheaper with digital distribution, we could have spent that time doing something else so therefore a game costs just as much."

Now if digital versions sold 1:1 with physical versions, you'd be 100% right.

archonwarp

emnmnme wrote: »

Well, if I had to guess, digital distribution isn't as proven as buying games at Wal-Mart or wherever by a long shot. Since it's riskier I bet publishers jack up costs to cover any potential losses. It's kinda like how the drug companies say it costs $800 million to produce a new medicine but really more than half of that estimate goes to possible losses of projects they could have taken if they weren't developing that particular pill. So if Big Pharma can dream on what might have been instead of what it actually costs, game publishers can do the same and pass the costs to consumers. "While it is cheaper with digital distribution, we could have spent that time doing something else so therefore a game costs just as much."

Now if digital versions sold 1:1 with physical versions, you'd be 100% right.

Understandable, but it's a bit different in this respect. All they're doing is throwing changing the format a tiny bit on a few files and sending you an iso with an unpacking tool. The stuff is already made, and they simply have to spend what, $5,000 to advertise to the gaming community? If that, since most places would simply throw in along with their news reports, "Hey, you can also grab this online from EA Link." This isn't drug companies (which is a whole different matter of bullshit) where 5% of their grossly overstated costs go into research and development, this is sending Steve, the 12-dollar-an-hour intern down to the coding room to have them set this up in a day or so.

emnmnme

Well, you need security for your server, too. And you probably need to hire some extra tech support guys for the people who can't get the thing to work....

I like the idea of digital distribution. I like the ideas of gametap, yahoogames, and vongo. We consumers just need to get a little more organized to make sure publishers don't overcharge us.

Pancake

Okay, maybe it has to do with potential losses, maybe it has to do with perceived value. But do you know what it's mostly likely about? Good business relationships with retailers.

Valve can sell things on Steam for as much as they want, but they let the publisher of the game they're selling on Steam (if they're not the ones publishing it originally) set the price. This has always been full retail price. Why? Well, let's say the retail version of a given PC game is $50. Now let's say that the reduced costs of digital distribution get the publisher to lower the price to $30 on Steam.

Do you think the retailers are going to like this? Profit margins on games are tiny already and now they're being undercut by twenty dollars? Retail sales of games is still more prolific than digital distribution and do you think the retailers are going to be happy about this? No. What would happen from there? Who knows, really? Publishers probably don't want to take the chance that they might sour relationships with retail stores.

EDIT: Also, with Half-Life 2, while the bronze package on Steam gave you nothing more than retail did, if you paid just $10 more dollars, you were getting eleven games including the Day of Defeat: Source that wasn't released until later.

emnmnme

That's what this thread is missing - what should a digital version cost? If C&C3 is $49.95 USD, what's a fair price for the downloadable version?

Cantido

I with the Touhou games would come out on Steam or Virtual Console so I wont have to pay for shipping that's more than the damn game.

EvilBadman

Here's what I love about Digital Distribution in a nutshell:

Steam is selling Deus Ex for $8.95, and this price versus attempting to locate it in a brick and mortar is a good thing. I'm not going to pick up new games off steam if the price difference is negligible, however "classics" attached to my steam account versus tracking it down and physically owning it? Sure.

Shadowfire

There's another huge issue with digital distribution that I have, at least. You don't own the game you buy. I know that technically, even with physical media, you are just getting a license to use the game. But with digital distribution, you have no recourse. You are paying the same price (or more, as shown) for the game, while getting less, and having the bonus that if the distributor decides you are no longer allowed to play, too bad, fuck you, you can't play.

Digital distribution will probably never be an option to me, and many others like me. Gives the distributor too much power over the consumer. :v:

taliosfalcon

Would it be better if some of the savings gained by the company for using digital distribution were passed down on to the consumer? sure. That being said i'd still much rather buy a digital distribution version that lets me redownload anytime, anywhere ala steam then a packaged version for the same price, whose box and manual i'll most likely throw into a drawer never to be seen again unless i need to reinstall anyway. I buy games to play them, not to stare at the pretty box :P

archonwarp

emnmnme wrote: »

That's what this thread is missing - what should a digital version cost? If C&C3 is $49.95 USD, what's a fair price for the downloadable version?

It really depends. Give us some REAL numbers as to middleman costs and then we'll talk. If 50% of MSRP is based upon those costs, maybe mark the item down 30%, tip 10% extra towards the devs. Retail giants shouldn't have power over publishers, and like what was mentioned earlier, if one big digital publisher can tell the retailers/physical publishers to DIAF, I'm sure it wouldn't be long until others follow suit. I think $40.00 for something that doesn't have a box, doesn't have a physical CD, nor art, nor manual is a fairly good price for a $50.00 game. But again, I don't have middleman costs, so I don't know.


And Shadowfire, that's one of the issues I'm talking about. Digital distribution needs to adapt to meet the consumer's needs. That means lowering the prices on account of the consumer getting less product and the distributor saving assloads of money.