GDC 06: Digital distribution comes of age

SAN JOSE, Calif.--Last September, GameSpot took a look at a field many consider to be the next big thing in the gaming industry: digital distribution.

Since that time, Microsoft has launched the Xbox 360 and seen its Xbox Live Marketplace become the surprise hit of the system. Just this week, Sony confirmed that it's working on its own digital distribution endeavors for the PlayStation Portable and PlayStation 3, and Nintendo has expanded its "Virtual Console" for the Revolution to offer players games from the Sega Genesis and TurboGrafx in addition to old Nintendo systems.

To discuss the ongoing trend of distributing games online, the Game Developers Conference hosted a panel titled "What's Next in Digital Distribution and Mainstream Games," featuring Valve Software founder Gabe Newell (pictured, right), BioWare co-CEO Ray Muzyka, Xbox Live Arcade manager Greg Canessa (pictured, left), Reflexive Entertainment CEO Lars Brubaker, Introversion Software cofounder Thomas Arundel, and Ritual Entertainment vice president Tom Mustaine.

To start things off, Newell pointed out that when people talk about digital distribution it tends to be portrayed as a way for developers to lower costs but that its other benefits often get glossed over. For instance, Valve recently announced that its Half-Life series will soon be released in episodes, which Newell says will help remedy a number of problems associated with long development cycles for hit games, the likes of which Valve encountered with Half-Life 2.

"With episodic [content], we can build a AAA game and within another 6 to 8 months release another episode," Newell said. "We can maintain the momentum of the developers and retain the momentum of the PR marketing of our title."

For example, Valve ran a promotion recently that let Steam users download and play Day of Defeat: Source free for a weekend. Afterward, Newell said that the company's statistics showed that while a number of people purchased the game through the Steam service after participating in the free weekend, twice as many instead went out and bought the game at retail.

"That was totally surprising to us that the capabilities and flexibilities you get when you have this end-to-end connection with your customers not only give us those perceived benefits, but they also give us the surprising benefit of giving us a much more effective promotional tool for driving retail sales than we've ever had before," Newell said.

Muzyka was similarly unconvinced that the retail sales model would be going away anytime soon, saying that digital distribution trappings like content downloads, micropayment transactions, and episodic content will make the original retail products they support more attractive to users.

"You really need to have both forms of distribution to be successful, and I think that's going to happen for many years," Muzyka said. "You don't want to do things that are threatening or challenging [to retailers]. All these things are complementary."

Microsoft no doubt knows this, as the company uses the Xbox 360 Marketplace (of which Xbox Live Arcade is an integral part) to offer gamers demos, trailers, behind-the-scenes clips, and other goodies that might inspire them to go buy new games from retail. As for the arcade section of the Marketplace, Canessa wants to keep it pure and focused.

He emphasized that Microsoft is closely managing the portfolio of games available on Arcade and offered prospective developers two tips for when they submit games for consideration. The first tip was to include as much information as possible: demos, trailers, working versions of the game on other platforms, and so on. The second suggestion was more closely tied to the focus of the platform.

"This isn't about shoving old, multi-hundred-megabyte content--classic content in terms of last generation's retail content," Canessa said. "This isn't about demos, this isn't about trailers, this isn't about any of that stuff. It's about quick, fun, smaller-in-scope downloadable experiences and staying true to that."

Deciding which games make up the Xbox Live Arcade portfolio is more art than science, Canessa said, and it also depends on the type of game being offered. While Arcade can (and does) have a variety of different competing arcade shooters, Canessa indicated that with other types of games, chess games for instance, there's not a lot of room for many entries.

"It's not about 10 chess games, because it doesn't benefit anybody to wade through the nine crappy chess games to get to the one game," Canessa said. "We want to pick the best one or maybe the best two and drive all the multiplayer traffic of course to those best experiences rather than splitting it 10 ways. That doesn't make any sense."

For games that aren't expected to become staples, Canessa said his team looks at a game's fun factor, approachability, replay value, and innovation, which would include taking advantage of Xbox Live's support for things like co-op multiplayer and downloadable content.

Newell underscored that Valve's approach to what games it accepts on Steam is a far cry from Microsoft's stance with Xbox Live Arcade.

"Our model is less of a gatekeeper/approval process/portfolio management, and our view is that your digital distribution partner needs to be offering you services and utility," Newell said. "Certainly Valve as a developer would not be interested in having some third party trying to dictate what we were doing as far as what features should be in our product and whether or not it was good enough to be part of somebody's portfolio."

As for how long digital distribution would remain "the next big thing" instead of "the current big thing," Mustaine said in a session-ending Question and Answer session that the technology's time was almost at hand.

"I would fully expect that next year's GDC you're going to see a whole lot more about this," Mustaine said. "Right now, Marketplace has just launched, Valve and Ritual are both working on episodic content for the first time. We're in a bit of a ramping-up phase, an experimental phase. A lot of people have been doing this in the casual-games space, but as far as AAA episodic, it's right around the corner, and next year I expect to see a number of talks about the quality-of-life changes and the kinds of benefits we can get from this. It's amazing stuff."