Shots fired in digital distribution revolution

Representatives from GameTap, Microsoft, and Encore join designer Warren Spector to discuss the increasingly popular trend of getting games online; panelists take sides on the subject of micropayments.


AUSTIN, Texas--Digital distribution is not a new idea. It has been the focus of panel discussions at gaming conferences for years. The difference now is that instead of having panels packed with people interested in getting into digital distribution, the conferences can feature those who have found early success in the field. One of the final Austin Game Conference sessions on Friday afternoon covered the Digital Distribution Revolution and included the views of three people who fired some of the first shots and one renowned developer whose metaphorical rifle jammed.

As vice president of content for GameTap, Ricardo Sanchez is helping the Turner-owned game download service establish itself as a player in the market with a selection of retro titles complemented by temporary exclusives like Telltale Games' upcoming Sam & Max episodic games. Miguel Olivera is heading up Encore Inc.'s foray into the field as the director of its digital distribution program, which lets players download full-featured games and play them free for an hour. Up until a few weeks ago, David Edery researched the game industry for M.I.T.'s Comparative Media Studies program, and he has accepted a position with Microsoft to become the worldwide games portfolio planner for its surprise digital distribution hit, Xbox Live Arcade.

Rounding out the panel was Warren Spector, former Ion Storm designer who left the company specifically to found a new studio built on digitally distributed episodic content, a move he said didn't work out as planned.

"I think I was a little ahead of my time," Spector said, adding, "The money wasn't there and the resistance to this model at that time was huge. And venture capital guys scared me to death."

Spector has a traditional publishing deal at his current development house, Junction Point Studios. While he did mention in the panel that Junction Point had done some work with Valve Software and its Steam service, he said his company wouldn't get into digital distribution for a while. Despite that, he did express a strong desire to see digital distribution succeed and play a role in games becoming more mainstream.

"We are not [mainstream]," Spector said. "We're kind of a niche medium that overcharges for its product. And that generates a lot of revenue and makes it appear that we're mainstream."

According to Sanchez, the game industry's progression toward the mass market is being slowed by technological issues, including hurdles GameTap is dealing with regarding digital distribution.

"Consoles are great because they're simple," Sanchez said. "Any idiot can plug in a console. Not anybody can plug in a router. Not yet. Not anybody can configure their firewall so that the [digital rights management] we have to put in place to deliver these games can communicate with the server... Getting my mom to play Gametap was impossible, so she still has no idea what I do."

The discussion soon grew to aspects of digital distribution beyond simply getting new games to players, as the topic of Web phenomenon MySpace and digital distribution's implications on user-generated content were brought up.

Spector pointed to a current success story in the world of digital distribution, Valve's Steam. While Half-Life 2 might have been the flagship product for Steam, he noted that most of the content on the service isn't professionally generated.

"We've seen the mods community dominating the digital distribution space for years and years and years, and I don't see that changing," Spector said. "That's just going to get to be a much bigger part of our business. When you look at what Will Wright's doing on Spore, that's all built around players generating content and finding new ways to bring user-generated content to people who would find it interesting to get around some of the technological challenges we were talking about before."

Edery called the issue of user-generated content a favorite topic of his and something he studied quite a bit at M.I.T. And while there is an issue of quality control with user-generated content, Edery pointed to news aggregation site as an example of a site that handles the abundance of content well with the help of the users themselves.

"If you ever look at what gets submitted, 99 percent of it is garbage," Edery said. "But there are a lot of people out there willing to take their time to go through that list of garbage and vote on what they think is useful, and eventually some of that stuff bubbles up, and the stuff that bubbles up is consumed by a much larger audience."

While that filtering of content works well for user-generated content, Spector said that such filtering actually works counter to some of the benefits of digital distribution in the first place. He pointed to something he was told by a friend who started up a now-defunct casual game studio.

"The thing he discovered was that the casual game space seems to have limited itself in virtual shelf space in the same way that retail has, which is appalling to me," Spector said, noting that a site with 50,000 games might only have 10 listed on its front page. "He was saying if you're not in the top 10 of user-rated games, no one ever sees your game... There's got to be a better way to filter and yet still give people access to content they might like."

While it's not always done, Olivera said it's entirely possible for user-generated content to be monetized, mentioning Reflexive Studios' Ricochet: Lost Worlds. The game came with a level editor, and some of the best user-created levels were compiled and released as Ricochet: Lost Worlds Recharged.

"It was exactly what we would hope it would be: a game fully developed by fans. It wasn't really crap. It was a really exciting game with sophisticated, nicely designed levels. And they charged exactly the same amount for that game as they did for the first game."

Edery slipped in the last word on user-generated content, saying, "I don't normally engage in hero worship, but I think it's telling that some of the people we regard as the smartest in our industry, people like Will Wright or Ray [Muzyka] and Greg [Zeschuk] from BioWare, are so excited about user-generated content. I think that really says something."

One of the more touchy issues surrounding digital distribution for gamers is the idea of micropayments, deriving additional income from games after the initial purchase by selling users add-ons or in-game items for small sums of money. Much to the audience's amusement, it was as contentious an issue for the panel as it was for gamers.

"I hate micropayments," Spector said blunty. "I don't know what else to say. Yeah, I want to pay $1.99 for a sword... 15 cents for a tunic? Give me a break."

"I think micropayments are awesome," Sanchez teased, before turning to the idea of free downloadable games entirely driven by micropayments. "It's an interesting model. I think because the ad market in the US is so strong that the in-game advertising business will eclipse micropayments, but I think you'll see them go hand in hand."

Olivera also came down on the side of micropayments, calling it a learning process that won't happen instantly.

"It's still evil," Spector said, drawing laughs. "Here, you can play this bad game for free, or pay us a little bit at a time to make it worthwhile? I just don't get it. And boy, somebody's going to tell me sometime in the next years that I gotta put an ad in a game and I'm going to just die."

"I actually don't think the models are mutually exclusive," Sanchez said, pointing out that in-game ads could be included in micropayment-driven titles as Spector pantomimed an apoplectic fit, banging his fist on the table and biting down on his cup of water.

When Sanchez had finished, Spector flatly stated, "There are some things you shouldn't do for money," to which Sanchez replied, "I completely agree, and I wish I hadn't."

After the audience laughter died down, Edery offered his own take on the subject.

"It's strange how in the US at least, micropayments in the eye of not only the consumer but also developers, has turned into 'How do we rip off the players?'" Edery said. "And it's completely unclear to me that it has to be thought of that way."

Edery pointed to The Vile Lair, an add-on pack for The Elder Scrolls IV: Oblivion that includes content specifically tailored for players whose characters had become vampires in the game.

"In some ways, that's actually a really interesting way to make the market more efficient. Why should I pay for more vampire content? I don't want to be a vampire. This one does, and is going to pay $1.50 to get more vampire content. Great. So at least in that regard, micropayments could actually be quite useful and not at all in any shape or form a rip-off."

Edery also defended the free game micropayment model, saying it can work when it's a good game that is made even better with micropayments, pointing to the Korean shooter GunBound as an example. That was followed up by an audience member's point that arcades also work on a micropayment system. With both the panel and the audience coming to the defense of micropayments, or at least reserving judgment on them, Spector backed off slightly from his earlier statements.

"Listening to everyone talk, maybe I was a little hot-headed there," Spector admitted. "Certainly there are some games where micropayments make sense. In the case of Oblivion, that's a really good point... Maybe I'm paranoid, but having been in this business a very long time, what I've seen is once something works, that is the only thing we are allowed to do. I wasn't kidding before. I know for a fact that given the kind of games I make and the kind of intellectual property that I'm creating now that I can't talk about, I know someone's going to say, 'Let's put ads in this,' and I don't want one's come to me and said, 'You must put an ad in this game.' And it's inevitable, because it's going to work. It's going to make somebody some money. And that's the only thing that matters...making money."

Got a news tip or want to contact us directly? Email

Join the conversation
There are 94 comments about this story