Id's Carmack Positive Digital Distribution Will Destroy Retail

[Rednog]

I for one want Digital Distribution to blow retail to pieces.
For one it will actually force internet companies to up their ante and provide better and better speeds, I mean seriously speeds have been somewhat throttled for way too long in some places unless you pay an absurd amount.

Second maybe then companies will finally give the consumers a break in price because they are cutting out the middle man that is retail/ packaging/ making copies.

Maybe it is just me, but it seems more and more of a hassle now a days to go out for a particular game or item and just having the rotten luck of not being able to find a copy. Stores often stock their gaming inventory terribly, don't carry titles older than a few months unless they are like AAA titles, and very often have any deals. Whereas you see the digital distributors like Steam or D2D always having some kind of deal.

Odds are it will do the opposite. Gaming services for internet packages are being treated as a premium in the states, and that's likely to get worse.

Meanwhile, it's more than likely that most people will not establish a steam style markup. It's debatable whether Steam will keep it up when they're not longer competing against retailers.

I'm kind of curious if we (the US) would honestly go up in terms of internet services. I think that eventually companies would be forced into competition for the consumers dollar and they would have to push speeds faster and faster, but as it stands now you're right it is a premium service because in many areas there is only a single company running the show. But, at least from what I hear, you have countries like Japan where there are multiple companies fighting for the consumers choice of internet speeds and not only has their speeds skyrocketed but they aren't paying exorbitant amounts for it either.

And I think that in order to reach the point where digital kills retail companies would have to take on a steam style markup, because if they don't then there is no big incentive to choose digital over retail. And once that happens it sort of ends up being a point of no return for companies. It isn't like the day retail dies, digital distribution companies suddenly can do a 180 and change everything so that it just ends up being an online retail store, consumers wouldn't stand for it at all. The company that did that would probably hemorrhage customers while those that stuck to the steam style would just see their profits kicked up and reinforcing that style.

 

[Something Amyss]

I'm kind of curious if we (the US) would honestly go up in terms of internet services. I think that eventually companies would be forced into competition for the consumers dollar and they would have to push speeds faster and faster, but as it stands now you're right it is a premium service because in many areas there is only a single company running the show. But, at least from what I hear, you have countries like Japan where there are multiple companies fighting for the consumers choice of internet speeds and not only has their speeds skyrocketed but they aren't paying exorbitant amounts for it either.

Yep. And Japan has the cheapest bandwidth (Dollars per MB speed). The major problem being that, even on a national scale, we have a limited number of companies competing, and we're still getting bandwidth caps. Time Warner and Comcast compete so much, they actually have split up more than one company between them.

There's a lot to be said for market competition, but we don't really have that going and we'd need to install it before it could impact the industry. There's no reason to believe that is going to change any time soon, with a larger push towards tiered internet and premiums on the horizon.

 

[Assassin Xaero]

Probably half the games I buy are digital, and it is cheaper too. No tax, no gas money, no shipping, and a lot of times they are on sale. So, I could go for digital only... better for storing games anyway, no need for discs...

those are probably pc games and you can only count on no taxes for so long, eventually you will see them

I think the big worry about digital distribution should be what happens when every publisher decides it should have its own steam type service and tries to link its games exclusively with that service, if they get weird enough then you could end up having to run multiple invasive programs in the background to just play a game

From what I heard or read or something, you only have to pay tax on it if it ships from the state you live in. It is like that in a lot of online stores. Like amazon and stuff, I only have to pay shipping/handling, no tax either.

 

[Andronicus]

They can only compliment each other.

Physical Media: "Oh, hey, Digital Distribution, you look swell in that hat!"
DD: "Thanks, PM! Have you lost weight? You're looking good!"

(Sorry, I just had to do that. I get what you're saying, but the Grammar Nazi in me only laughs at this exchange. The word you're looking for is "complement.")

Awww, I wanted to make that joke...

OT: Yeah, DD is great and there's no doubt in my mind that it'll become much bigger than retail, but as for retail dying out completely? Nyyyerrr...

 

[Zer_]

Oh and for the record, it's id Software, not Id Software. The i must not be capitalized.

 

[LightOfDarkness]

Id's Carmack Positive Digital Distribution Will Destroy Retail

And so am I.

I don't think enough people have stable connection with their internet, or even properly connected to the internet.

But they will. In around 6 years i've jumped from a 32kb/s connection to a 5MB/s internal and my download speed on steam is around 3 MB/s, and the connection costs me a grand total of 9 bucks per month. And this isn't the US, rather an old eastern bloc country in the backseat of Europe. Saying DD will never overtake retail seems like a horribly stupid thing to say from my perspective.

I want your connection.
1.4 mbps when I'm paying $40 a month for a 6 mbps connection x.x

 

[Worgen]

Probably half the games I buy are digital, and it is cheaper too. No tax, no gas money, no shipping, and a lot of times they are on sale. So, I could go for digital only... better for storing games anyway, no need for discs...

those are probably pc games and you can only count on no taxes for so long, eventually you will see them

I think the big worry about digital distribution should be what happens when every publisher decides it should have its own steam type service and tries to link its games exclusively with that service, if they get weird enough then you could end up having to run multiple invasive programs in the background to just play a game

From what I heard or read or something, you only have to pay tax on it if it ships from the state you live in. It is like that in a lot of online stores. Like amazon and stuff, I only have to pay shipping/handling, no tax either.

currently yeah but you can bet that states are doing everything they can to be able to tax online stuff

 

[Assassin Xaero]

Probably half the games I buy are digital, and it is cheaper too. No tax, no gas money, no shipping, and a lot of times they are on sale. So, I could go for digital only... better for storing games anyway, no need for discs...

those are probably pc games and you can only count on no taxes for so long, eventually you will see them

I think the big worry about digital distribution should be what happens when every publisher decides it should have its own steam type service and tries to link its games exclusively with that service, if they get weird enough then you could end up having to run multiple invasive programs in the background to just play a game

From what I heard or read or something, you only have to pay tax on it if it ships from the state you live in. It is like that in a lot of online stores. Like amazon and stuff, I only have to pay shipping/handling, no tax either.

currently yeah but you can bet that states are doing everything they can to be able to tax online stuff

Hell, knowing our government they are probably trying to think of a way to tax us for breathing. And if you think about the old sayings, they are taxing us for our thoughts... "Penny for your thoughts" "People put in their 2 cents" The other penny is obviously going to taxation.

 

[ZippyDSMlee]

Meh I think what will most likely happen is with retails buying power they will get publishers to allow them to sell branded items on flash or right from the net. Never underestimate greed and buying power I will buy 10000 units for a 25% discount!


Right now the industry is trying to shift to a lower price point for less content but there is no telling what we will have in 5 years. But regardless the 3DS is using flash, blu ray will be around for 10 more years easily, even longer if they can get 100GB a disc out to consumer markets cheap.

After 10-15 years I dunno it depends on if we a have cheap and fast nationwide wireless infrastructure or 5$ for every 5-10GB received/transmitted.

 

[Super Toast]

Not in Australia. Or nationwide broadband system is far too shite at the moment to download games.

 

[Nouw]

But I love the Case! The thing I hated about Starcraft II was lacking a DVD case, instead a stupid small pouch.

 

[Red-Link]

<As far as it taking over like Carmack predicts, I'm not so sure. After all, doesn't the average consumer still need a place to buy their consoles in the first place? Will the current retail outlets want to stock items that only sell digital products? Will the mainstream gamer that isn't aware of the inner-workings of the videogame industry be able to swap his/her purchasing habits to get rid of discs completely? It's a common thought pattern to say that the industry will go digital someday, but there are a lot of details that have to be worked out before that ever happens, making me think that retail outlets will always be around to keep a large portion of the industry's audience in the fold.

I see where you're coming from with this, but it's not like he gave a timeline. For us, it probably won't happen, but the next round of gamers, the ones who grow up with it? I think it's very possible. Think of internet use, or even gaming, in terms of those who were adults at inception versus those who were children or not even yet born. Though this is a bigger change in my opinion, so it may take one or two extra generations, but I do feel that it will happen eventually. Think of how nice companies must see it to not have to pay costs for the physical production and the distribution of a physical item.

 

[RhombusHatesYou]

Not in Australia. Or nationwide broadband system is far too shite at the moment to download games.

It's not completely shit, just mostly shit.

Of course, even where it's not shit it's hideously expensive.

Then, naturally, there are spotty regional and rural service as well as 'black spots' in the cities.

All these people pushing wireless internet as a solution are missing one very, very big problem - it's not a good domestic solution because the available bandwidth is shared with every mobile device. That means it has all the problems inherent with mobile devices (signal strength, reception, black spots, etc) and, given the explosive growth in popularity in both wireless internet AND mobile devices, the shared bandwidth can mean massive drops in transmission speed when the local bandwidth is saturated with users. Hell, the Fed Govt had to slice off 2 more chunks of the RF spectrum for mobile device use and even then it was only estimated to stave off chronic bandwidth logjam for another 5 years *if* use adoption rates stabilised - and this was around the time of the original iPhone release in Oz.


The worst thing is that the most reliable broadband in Australia is cable and you can only get that via dealing with the Devil (aka Telstra).

 

[RhombusHatesYou]

This just in; Digital Distribution is about to make you it's *****.

That was Romero not Carmack.

 

[Sephiwind]

I find it funny how naive people are. So many of you assume that digital distribution will make games cheaper because it is on Steam. I hate to break it to you but the only ones who it will be cheaper for are the developers, especially for consul. Why lower the price when they can just keep selling the games for the same price but rake in more profit by cutting out the middle man.

Also all you people who talk about internet having to improve quicker because of this are sadly mistaken. The physical infrastructure needs to be there for broadband.If an area doesn't have the physical infrastructure then a company need to go in an develop one which costs money. The larger the area, the more time and money it will cost. To fully develop an entire country the size to the U.S. could take years if not decades to to lay down a complete infrastructure so high speed broadband is available everywhere.

Finally one thing that gripes when I read these forums are all the anti-retail people. You people say down with retail, and let retail burn. Well what about all those people that work at these stores? Are you fine seeing thousands of people become unemploied just because you don't like how their corporations handle things? You people just see the store and not all the people that work for it.

 

[Zer_]

I find it funny how naive people are. So many of you assume that digital distribution will make games cheaper because it is on Steam. I hate to break it to you but the only ones who it will be cheaper for are the developers, especially for consul. Why lower the price when they can just keep selling the games for the same price but rake in more profit by cutting out the middle man.

Also all you people who talk about internet having to improve quicker because of this are sadly mistaken. The physical infrastructure needs to be there for broadband.If an area doesn't have the physical infrastructure then a company need to go in an develop one which costs money. The larger the area, the more time and money it will cost. To fully develop an entire country the size to the U.S. could take years if not decades to to lay down a complete infrastructure so high speed broadband is available everywhere.

Finally one thing that gripes when I read these forums are all the anti-retail people. You people say down with retail, and let retail burn. Well what about all those people that work at these stores? Are you fine seeing thousands of people become unemploied just because you don't like how their corporations handle things? You people just see the store and not all the people that work for it.

You've got a lot to learn about how economics works.

Yeah, digital distribution is cheaper for the developers. It allows them to cut out the middle man in many cases. This can have two effects really. One is that the games get cheaper, or the developer makes more money for future investments. Both are good things in my opinion.

Second, most of the infrastructure is already in place. Broadband coverage in North America is already very good. All major cities have excellent coverage. Most suburban towns have good coverage, and a large number of smaller towns have respectable coverage. Things can always improve, but for the most part, we're fine. ISPs are charging huge amounts of cash for bandwidth not because it's in limited supply, but because they can. It's called artificial scarcity, and it's a common practice in bigger corporations.

Oh and if they did have to build further infrastructure, then yes, it'll cost money, but it'll also create jobs, and eventually start to make some money back for the ISPs.

 

[Jake Martinez]

Carmack is 100% correct. The only business people who lose out on digital distribution are the retailers (and to a lesser degree, companies that ship goods, making boxes, press DVD's).

Developers and Publishers will win big, big, big, big with digital distribution as it will more than double their margin of profits.

The only caveat here is that it won't happen until the consoles all support built in app-stores and everyone is comfortable that broadband penetration has reached a large enough point so that the loss in sales from people without broadband is covered by the increase in margin.

People always like to say, "Yeah but there will always be people that want a physical copy" like this is some sort of talisman against digital distribution. You're correct in a way that there will be a certain segment of the population that resists digitial distribution at all costs, however in the end it all comes down to a numbers game. If the loss of revenue from those customers is covered by the increased margin on the sale, then that's the magic point where physical copies go "away".

Even then, "go away" is a misnomer. Probably you'll be able to order a physical copy on-line through the post and pay shipping and handling or you'll be able to go to a kiosk at best by and order the game directly there and have it burnt to a DVD or dispensed on a thumb drive, but there will be no way in hell publishers will continue to push physical copies that sit on shelves. It costs money that they would rather have in their pockets.

 

[Th37thTrump3t]

Although internet access is getting faster, games are getting bigger. I'm expecting a massive upgrade to my broadband sometime over the next few months (1Mbps to 15MBps). But I also expect games will come on Bluray disks in a few years.

Ultimately I reckon that networking technology will hit a wall before storage technology does.

PS3 games are already on bluray, and judging by how fast technology has advanced within the last 10 years I don't think we will be using bluray in the next few years.

 

[lacktheknack]

I have to support digital distribution. I walked into a tech shop and went to the games section. The Xbox has three racks dedicated to it, the PS3 had three and a half. Wii and DS were mixed together on five racks.

The PC section had Civilization V ($60), Starcraft II ($60), a used copy of Black Ops ($50), about twenty Nancy Drew games ($20 each) and Zuma ($20!!). Sorry, but I wanted Lara Croft and the Guardian of Light (DD only, I now realize) and Mass Effect 2. Your retail outlet is of no use to me.