Digital
Download

Ten Ton Hammer Editor-in-Chief Jeff
“Ethec” Woleslagle
believes style="">digital
distribution is the future of gaming. Ethec
cites no disc swapping,
no target="_blank">DRM
hassles, no trips to the retailer, and no inventory
shortfalls among the reasons he likes digital download as a consumer.
One
aspect he did not address is the potential savings for the developer.
It costs
money to print a box, make a DVD, and ship a game to retailers. Going
with an
entirely digital distribution model would allow companies to eliminate
those
costs while still selling the product.

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Perfect
World International may be the only free-to-play game
available in a
box.

Selling a title exclusively via
download for the same price
as retail stores would permit a company to reap the current benefit of
box
pricing while reducing production costs. The benefit here is avoiding a
price
increase that could scare off customers while still freeing up cash.
The
drawbacks of the digital distribution model include a lack of
advertising in
retail stores that boxes bring now, as href="http://www.tentonhammer.com/node/50655"> style="">I noted recently.
Another shortfall of this plan is that consumers must burn DVDs for
themselves or
find other storage solutions for games they obtain digitally. Every
gamer is
just one nasty virus away from a reformat, and no one wants to endure a
six
hour download for each game he has purchased digitally after rebuilding
his
machine. Because this method of combating the dip in the economy does
not
increase cost to the consumer, expect to see more companies explore it
in 2009.

The “M” Word

Microtransactions. There. I said it.
Somebody had to. The
microtransaction model has been wildly successful in the East, and it’s
slowly
working its way into the Western market. MMOG behemoth World
of Warcraft offers href="http://www.tentonhammer.com/node/51164"> style="">microtransactions to change
the appearance of characters (and their gender,
too!). Sony Online
Entertainment has introduced href="http://www.tentonhammer.com/node/51153"> style="">Station
Cash, bringing microtransactions to style="">EverQuest and EverQuest
2.
In both cases, the services offered by Blizzard and SOE are intended to
be
purely optional; they are a convenience and primarily give cosmetic
changes.
Nevertheless, many fans have revolted.

Most free-to-play (F2P) games depend
on microtransactions as
their only source of revenue. While href="http://www.tentonhammer.com/Top10F2P">I
love F2P games,
I’ll be the first to admit that they usually do not share the
production value
of subscription-based titles. As a result, the word microtransaction
has become
synonymous with poor quality and fleecing in the West. To ever win over
the
Western player base and make microtransactions work, it will take a
company
willing to commit to a high quality product that uses a popular
intellectual
property.

The benefit of using
microtransactions is that companies can
often offer the basic game for free and use the revenue generated from
item
mall sales to finance additional content and fixes for bugs. Most
Western
consumers don’t see it in the extant implementation, but
microtransactions can
also allow them to experience a game for free in tight financial times
and make
only small purchases when their discretionary cash allows. This model
may face
the path of strongest resistance in the West.

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Sony Online
Entertainment  ventured into microtransactions in late 2008.
Who will follow suit in 2009?

Parting
Thoughts

If the estimated cost to produce the
average AAA MMOG is in
the neighborhood of $30 million US, gamers need not doubt that
developers will
continue to seek methods to increase revenue. It’s not milking the
consumer;
it’s defraying costs and ensuring the hardworking employees actually
get paid.
Investors want to know how they will yield profit prior to forking over
the
cash, so pressure is greater than ever for developers to show a
lucrative
business model. Charging for closed beta access or raising the prices
of retail
boxes and subscriptions contributes to a system of inflation that
causes
backlash from the consumers. Until the economy recovers, it might not
be the
best time to go with those plans. Digital downloading reduces overhead
but
reduces exposure to impulse buyers. It’s a better solution than raising
prices
from a public relations standpoint, but it creates its own problems.
Finally,
microtransactions are demonized in the West, creating a huge barrier
until a
big name takes a risk and delivers a great product that can be free for
the
majority while a minority finances further development.

In short, expect some changes to the
way things are done in
2009. Be ready for companies to display trends toward one of these
solutions at
minimum and a combination of them in all likelihood. None of the
strategies
solves all problems, but something has to give. Be glad your only
problem is
figuring out how to fit in all the gaming you want to do.