It’s now been about a week since XBox announced The One, including obliquely hinting that games will be locked to one console, and the entire Internet responded with rage not seen the Matrix: Reloaded turned out to be an exercise in Wachowski wankery. This caused Microsoft to backpedal, albeit in a vague, nondescript sort of way that suggests they are either changing their plans or pummelling their PR department into figuring out how to spin the move as being a good one for consumers. Which is a shame, because it probably is.
Now then, I have never shipped a console game – I’ve been in MMOs my entire career, which are in their own state of transition – so I’m watching this all from a distance, and I don’t really have a dog directly in the fight. That being said, I find it comical that the fanboys of the world are absolutely indignant that the way that they buy video games might change forever. Here’s a free clue: this has already happened. The consumer economics of buying video games has already changed forever. The console makers are now merely trying to keep themselves relevant in this changing world.
Change #1 is Steam. Right now, you can buy Borderlands and Skyrim on Steam for less than the cost of what you can buy the same titles for at EBWorld -used. Sure, it’s off by a buck or two, but as a consumer I gain other benefits, such as the fact that I don’t have to put on pants to buy Skyrim – I can continue my antisocial ways. I also no longer have to worry about losing or scratching my CD or a host of other problems – I merely have to hope that Steam doesn’t go out of business anytime soon, and my games will be accessible from any computer forever.
Steam is doing a couple of key things lost to the casual game player. First off, its extending the ‘shelf life’ of games a great deal. You can now buy all of the Tropicos on steam right now – good luck finding any of them at Best Buy. The lack of physical inventory means that the store can get infinitely big. All of this creates an insane level of competition on steam, though, which creates strong price pressure downwards. Which results in Steam’s various weekend madness sales.
Steam also has more financial upside for game developers. Consider how a standard $60 box sale is split. For most console games, the console maker gets a 20% chunk and Gamestop gets a 20% chunk. Rumors have it that Steam’s is only 30%. On top of that, Steam dramatically reduces the value of the publisher in a relationship. Getting published by EA or Ubisoft is not just about getting access to funding, which is crucial, but it also gives you access to their retail distribution network – it takes a lot of money and logistics to ship games to Gamestops and Walmarts across the globe on launch day, and part of why EA is a juggernaut is that they’ve got a well-oiled machine. Steam removes all of this value from the Publisher’s end of the equation, which gives developers more leverage in negotiations. It is not an accident that PC ports of console games have actually started to match the quality of the console games themselves if you plug your controller into your PC. The developer really would prefer you bought that version.
The second change is League of Legends bringing free to play to the hardcore gaming market. Previously, F2P was the province of only kooky Koreans making goofy MMOs unpalatable to the American audience, due to an uncomfortable number of panty shots. Now, though, it’s cutting into almost every genre you can imagine.
It’s not hard to imagine a world where the Box Sale (and by extension, Gamestop’s brick and mortar stores) are a curious anachronism as soon as 5 years from now. Right now, any MOBA that comes out would be considered suicidal if it tried to charge $60 bucks for a game that competes with LOL. Tribes forces that same question on any first person shooter that’s coming out. Both The Elder Scrolls and Wildstar are making noises like they plan on having a traditional subscription/box sale model, but there’s a strong argument that the wealth of free options available (including the recently converted SWTOR and the designed-for-microtransactions Neverwinter Nights) will make this a pretty hostile arena to step into. The iPhone games market has converted almost entirely from premium to free in the last couple of years. One by one, we will see other genres and platforms go free, until eventually, any game that doesn’t do so will stick out like a creepy forty year old man in a trenchcoat at a playground. Box products will likely evolve to become ‘DLC packs’ that exist largely so your mom can physically purchase something to put under the tree come Christmastime.
The thing about Free to Play, though, is that its not really free. It turns out that game programmers need to pay rent too, so F2P games require microtransactions. It requires an easy to use online store, it requires no piracy, etc, etc. Right now, this is an easy and natural thing to do on a PC. Game developers do not want to make games with two different billing models on two different platforms.
I guess this is all a very longwinded way of saying that the changes that players are afraid that XBox One have already happened on other platforms. Steam licenses are non-transferrable. iPhone games as well, and most iPhone games have already made the move towards being F2P/Microtransaction games. Microsoft has to care a lot more about how they fit into THAT particular competitive landscape much more than they need to worry about the premature hystrionics of some myopic fanboys.
Also, Gamestop is evil and almost all game developers would be happy to watch them die.