Going Disc-less: The Current State of Downloadable Gaming

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Three summers ago, including the one we just put behind us, Microsoft launched a downloadable games initiative for the Xbox 360 called “Summer of Arcade.” Every Wednesday in August 2008 they released a handful of downloadable games, giving video game players such gems as Geometry Wars: Retro Evolved 2, Braid, Bionic Commando Rearmed and Castle Crashers.

These titles made a big splash in the gaming community, so Microsoft held another Summer of Arcade in 2009. This time they released ‘Splosion Man, Marvel vs. Capcom 2, TMNT: Turtles in Time Re-Shelled, Trials HD and Shadow Complex. Once again, the Summer of Arcade’s lineup was much talked about.

Naturally, Microsoft’s Summer of Arcade resurfaced this past summer. Beginning on July 21, Microsoft started pumping out downloadable delights over Xbox Live Arcade. This summer’s games included Limbo, Castlevania: Harmony of Despair, Monday Night Combat and Lara Croft and the Guardian of Light.

Of course, Microsoft is not alone. Sony and Nintendo both have online platforms—the PlayStation Network on PlayStation 3 and WiiWare/Virtual Console on Wii—and put out bite-sized video games of their own. For example, Scott Pilgrim vs. the World: The Game came out on the PlayStation Network August 10, a full two weeks before the game was released on Xbox Live Arcade.

According to Forecasting and Analyzing Digital Entertainment, LLC (FADE), a market research firm with a focus on downloadable games, Microsoft amassed over $100 million from Xbox Live Arcade sales in 2009—a 200% increase from 2008, when the Summer of Arcade initiative first took shape.

So what is it about downloadable games that’s so appealing? For starters, they are considerably more affordable than retail titles. Downloadable games on XBLA or PSN are typically priced at $5, $10, $15 or $20. Retail games, on the other hand, release at $60. And just as downloadable games are more affordable for consumers, they are more affordable for developers to make.

Because downloadable games are more affordable to make, it allows developers to take more chances, to be more experimental with their game design—it’s far less damaging if a small game that took a few months to create tanks versus a billion dollar game that spent 2-5 years in development.

This contributed to a resurgence of classic gaming genres believed to have died off when the industry made the jump from 2-D pixilated sprites to 3-D polygons. Shadow Complex, which came out during 2009’s Summer of Arcade, is an undeniable homage to Super Nintendo’s Super Metroid. Games like Castle Crashers and Scott Pilgrim vs. the World: The Game harken back to the days of Double Dragon and Streets of Rage. And games such as Bionic Commando Rearmed and TMNT: Turtles in Time Re-Shelled are straight up remakes of NES- and SNES-era video games.

Essentially, downloadable games have given gamers exactly what they want—more affordable games, the kinds of games they love, and something to play during the summer when many have more time for gaming (summer break for students, vacation weeks for working stiffs).

Still, downloadable games have a long way to go. Microsoft and Nintendo both use their own currency—Microsoft Points and Wii Points—which can make purchasing games a hassle. Both Sony and Nintendo’s services are free to use, while an Xbox Live Gold subscription costs $7.99 for one month, $19.99 for three months and $49.99 for 12 months. And, starting November 1, Microsoft will be increasing those subscription prices to accommodate for their upcoming new features, such as ESPN on Xbox Live, their motion control-based initiative “Kinect”, and Hulu Plus.

Will this increase in price change the rapid growth of downloadable games? Chances are it won’t. Despite being the only online service with a subscription fee, as well as an obnoxious point-based currency, Xbox Live Arcade trumps both Sony and Nintendo in terms of downloadables purchased. It would seem, then, that gamers are willing to put up with inconveniences like poor pricing structures and hefty subscription fees for the sake of good, not to mention affordable, games. FADE’s market research certainly proves that, if nothing else.

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