Clu Clu Land On Wii U Virtual Console Today

Don't waste your money.

Full Games on the eShop

Nintendo has started offering more full retail games on the eShop. On Thursday, they added Ocarina of Time 3D, Super Mario 3D Land, Star Fox 64 3D and Mario Kart 7 to their eShop offerings. They're all being sold for $39.99 apiece.

I'm not sure this pricing is going to work. I would absolutely love to have these games installed on my 3DS so that I could change between them without having to change out cartridges, but that's kind of pricey.

I know that this is what they're selling these games for via regular retail channels, but let's be real: The additional packaging, fabrication and shipping of the games adds extra overhead, which pushes the price higher. For the eShop, the only cost that Nintendo needs to pay is the server infrastructure, which is considerably less than physical shipping. For that reason, Nintendo should sell these games for far less on the eShop than in stores.

Now, I know this is coming from the guy who bought New Super Mario Bros. 2 via the eShop, but I really, really hope that Nintendo does something about those prices. It would be nice if they followed in the footsteps of Steam and do some specials deals during the holiday season, for example.

That, however, could be a double-edged sword. For example, I don't buy many games from services like Steam or GOG without them actually being on sale. I can't bring myself to pay full price for something I know that they're going to drop the price on.

Still, it would be nice if Nintendo would throw eShop users a bone. I know they want to move a large portion of their users to digital distribution. Lowering the prices would be a nice way to start.

Sony Buys Gaikai

Over the weekend, Sony did something very interesting: They bought cloud-based gaming platform Gaikai for $380 million.

A few people are going nuts over this purchase. Imagine: Being able to stream a PS3 game to your mobile phone, or play on your tablet, or play games directly from your TV with no console! The possibilities are endless! It all sounds very exciting, but with a few caveats.

We've said it before, but people do still like physical media. You may point at surge in MP3s being a counter-point, or the emergence of companies like Steam as well. An MP3 or app is a very small purchase, as far as dollars go, so it's low-risk. I also shouldn't have to reiterate why Steam works and other services don't, but you can read that if you like.

Nothing exists in a vacuum, not even technology. Granted, people's opinions on physical media are shifting, but there's no solid evidence that a console-buying public will willingly shift to a streaming or cloud-based model or pure digital distribution. The most wide-scale test, the PSPGo, failed miserably, although there were some other reasons behind that. (Lest we forget, the PSPGo didn't exist in a vacuum either.)

So no one is going 100% digital anytime soon, which means that Sony is going to have to go to a hybrid physical/digital format. They've done something similar with the PS3 to some degree by allowing games to be sold both digitally and physically, but not nearly as much as a Gaikai acquisition would seem to entail.

Here's how it could shake out: Sony sells two PS4s. One is the typical home console, sold for $399 or whatever, that takes physical media, digital downloads and Gaikai. The other PS4 is just a set-top box for $99. It only does Gaikai, and it needs a $10 monthly subscription.

Would that be successful? You bet. Would Sony go that route? It's debatable. They might be more inclined to try and force people who want to play a streaming-only PS4 to buy a Bravia TV or other Sony product. You would be able to understand the justification for going that route, but you can't say that would be a better idea than a cheaper set-top box.

Otherwise, they could just insert Gaikai functionality into the PS3 as it stands right now. That would be an interesting selling point: "You already have the next generation of system right in your hands!" I can't see them doing that, though. Where's the monetization of Gaikai? Where's the excitement? If Microsoft puts out the XBox 720, and Nintendo has the Wii U, how will Sony convince people to still buy PS3s? It would be a tough sell.

Either way, it's a very intriguing acquisition, and one that we'll have to keep our eyes on.

New Super Mario Bros. 2 + Nintendo + Digital Distribution = What Exactly?

I've been wanting to weigh in on Nintendo's recent decision to start doing digital distribution starting with New Super Mario Bros. 2. Short answer: I like it, with a caveat.


Despite what it may appear, I don't actually hate digital distribution. I have tons of articles where I praise Steam and GOG to the rafters. Digital distribution is both convenient and means that you don't have to change out physical media constantly. Steam and GOG both add an extra tick in the "Pros" section by including frequent sales into the mix.

Most companies want the switch because of the dastardly scourge of used-game sales, and because they have far more control over the price once the game is being sold. After all, if the only copies of Game X sell for $50, that means that everyone who wants it has to buy it for $50! Cue "We're In The Money!"

However, that's not good for consumers, and if Nintendo goes that route, it's going to be a mess. So here's what I truly hope Nintendo has done: I hope against hope that Nintendo has looked at the bad examples of the PSPGo, Origin and others and the good examples of Steam and GOG and emulated the good examples more closely.

For example, I'm sure Nintendo plans on selling New Super Mario Bros. 2 at retail for $40. Are they going to sell it on the eShop for $40, or are they going to sell it for $30 or less? After all, by selling it direct to consumers, they're cutting out manufacturing of the cases and cartridges, as well as shipping. While servers aren't cheap, they already have the underlying setup for the eShop in place. Asking for Nintendo to sell New Super Mario Bros. 2 for less than retail isn't far-fetched.

That's really the only concern I have. As far as transferring games from one unit to another, I'm sure they'll have that functionality in place the same as they did with the DSi to 3DS transfers.

Now, it's conceivable that Nintendo could totally botch this. They could sell New Super Mario Bros. 2 for $40 in the eShop, the servers could be unable to handle the deluge of requests and Nintendo could be wholly lacking in support after the fact. It doesn't seem like a likely scenario, but if this doomsday scene comes to pass I reserve the right to change my opinion.

Adventures With Digital Distribution

As of right now, there are only two digital distributors worth dealing with: Good Old Games and Steam. The interesting thing is that both of these distributors are based on one guiding principle: Trust.
For example, Good Old Games lets you download the full files of whatever game you've purchased. There's nothing stopping you from putting that file on your torrent site of choice and letting others enjoy the sweet nectar of your purchase, and yet, you rarely see GOG files ending up on torrent sites.

Why is this? First, the games are so darn cheap that they're almost impulse buys. Second, they make the games easy to buy. Third, and most importantly, they don't treat the customer like a criminal. There's no limit on how many times you can download the game, no crazy online activation schemes to go through. That takes away the moral justification that people (myself included) have for pirating.

It's one thing to steal from the rich and give to the poor, but if the person you're stealing from is the nicest guy in town, it just makes you look like a jerk.

While Steam has to bow to the whims of the game industry's heavy hitters, it's also surprisingly flexible in the way it allows you to install the Steam client on different computers, and it also doesn't place any restrictions on how many times you can download the game. As we've discussed before, Steam succeeds for very good reasons.

Why do I bring this up? I'll tell you: Two bad experiences, one right after the other, with digital distribution. One demonstrates a misunderstanding of what digital distribution is supposed to accomplish, and one demonstrates the problem with the smaller providers as the industry grows and changes.

My first experience came from Batman: Arkham City. I first began playing the game via a pirated copy, since, while I had heard good things, I wasn't sure if it was a game I wanted to plunk down cold, hard cash for. I played it and enjoyed it immensely. When it came on sale at Impulse for $25, I immediately jumped at it to support the developer.

Impulse was previously owned by Stardock, who used the service to send out their own games. They couldn't make a go of the platform, and ended up selling it to Gamestop. Compared to Steam, it's lacking in features. There are no achievements, no community features, nothing. It's a pure delivery platform, nothing more and nothing less.

When I start the pirated copy, it waits on an initial loading screen for about fifteen seconds and then moves on to the actual game. When I start the legit copy that I paid for with cash money, it doesn't start for two minutes. This is because they're using DRM in the background to verify that I really paid for the copy that I paid for.

Bear in mind that this process is completely useless, since it's been bypassed handily in the pirated copy, and you can see where the issue lies. The whole point of digital distribution is to minimize piracy and used game sales, but when you layer DRM on top of the downloaded copy, it's completely destroying the point.

Not only that, but a ridiculous install limit was placed on the downloaded copy of Arkham City. I can only install the game five times before it runs out. If I decide to wipe my computer? That's an install. If I have to uninstall/reinstall the game? That's an install. I'm being penalized for purchasing the game instead of pirating it. The pirates have provided a better customer experience than the companies that are supposed to provide it. That's sick.

My second experience came from Civilization 4. I purchased the game via Direct2Drive a while back, and their system was pretty simple: Download the game, enter the product key and it'll go through a brief online activation. That's all. Since they gave me the capability of storing the files on my computer, it's only fair that I be forced to use a one-time online activation.

I've saved those files on my computer for a few years now, on the off chance that I'll want to reinstall the game. A week ago, I caught the bug again, so I started those setup files. The install went swimmingly, and I opened up Civ 4. It started to run the activation and then stopped with an error saying it couldn't connect to the server.

So why wouldn't it work? I went to Direct2Drive's site and found that it had been purchased by GameFly. I couldn't find any help forthcoming on GameFly's site about why Civ 4 wouldn't connect, but I have a clue. GameFly has a beta client software they would like me to download. I'm assuming that this is their new distribution model for their games, and what I would have to do if I wanted to play Civ 4.


Once again, I went to a torrent site, downloaded a Civ 4 .iso, installed it and was playing shortly after the download finished. No hoops, no muss, no fuss.

Since digital distribution is still in its infancy with only Steam being an established provider, purchasing from any other company can be a crapshoot. Will the company still be in their current form a year later? Two years later? Will any activation methods still work? Of course, the companies don't care because they have your money already.

As we've mentioned, Good Old Games steps around this. If Good Old Games were to go out of business tomorrow, every game that I have purchased through them would still work. Yes, they already have your money, but they still provide you with the followthrough that makes their business work.

And don't even get me started on the one time I tried downloading Age of Empires 3 from the Games for Windows Live client. Ugh.

This is what's driving me crazy. Most digital distribution providers are providing an experience inferior to what the pirates offer, and they're charging us money for the privilege! I've learned my lesson: When it comes to digital distribution, stick with the companies that trust you as the consumer, since most of them don't. Give them your money in appreciation of the great work they do, and maybe some of the other ones will get the hint eventually.

Six Reasons Steam Works

According to this article from Kotaku, the amount of users on Steam has more than doubled for the 7th straight year. At one point this year, Steam had 5 million users actively playing at ONE TIME. Surely, that means that digital distribution is the way to go, right? I mean, if Steam can pull it off, anyone can, right?

Not so fast. It's true that Steam is doing an admirable job. I love Steam. I use it all the time and buy games from it frequently. It's not perfect, but Valve seems to understand what people want and provides it to them. But it's important to note that there are a few reasons that Steam works, and any digital distributor would be wise to pick up on them.

1) Steam sales are frequent and substantial. For example, during the last holiday sale, Skyrim and Arkham City were sold for half off. I want you to think about that. If you go to any store right now and buy Arkham City or Skyrim off the shelf, it will cost you $50-60. That's true whether or not you buy used as well.

So, during a time where a AAA, brand-new game is still being sold for $50-60, you could buy it on Steam for $25-30. That's amazing, and definitely good for the consumer. That's just a small taste of why Steam works well. They're willing to take risks with pricing that brick-and-mortar retailers just simply aren't.

2) Unified PC multiplayer. PC users have always had a better multiplayer experience than console gamers, going back to the days of LAN parties. That advantage has slowly eroded as multiplayer gaming moves to consoles. It's easy to see why: XBox Live provides a united place where everyone can get together and meet up with their friends, see what they're playing, and join in. Ditto with the PSN.

Steam has provided that home that PC users were craving. Now I know when my friends are playing Frozen Synapse. If I want to join in, I can. If I want to keep playing Bastion, I can do that too, but at least I know that other people are out there.

3) You can give away extra games. If I have Half-Life 2: Episode 1 and receive an extra copy through a giveaway, I'm allowed to re-gift it to someone who doesn't have it (although, to be fair, everyone has Episode 1 at this point). That flies in the face of what most proponents of digital distribution would like. Most proponents would like to get rid of the idea of giving games to other people entirely.

4) I can install Steam on any computer I want. If I buy a new computer, I can install Steam immediately and start downloading my games with very little fuss. As long as Steam exists, I will have my games on that new computer. If I have multiple computers, I can install Steam on each computer. I can only have one active session at a time, true, but I can switch between them easily with little fuss.

5) There's an offline mode. Am I not connected to the internet at the moment but still would like to play my games? No big deal. I can do that and I'm not treated like a criminal.

6) Steam has refocused publisher attention on PC gaming. PC gaming was legitimately dying for a while. The only new games coming to the platform were MMOs and lazy PC ports. Now, publishers can see that there are five million people at any given time who are willing to play single-player and multiplayer PC games as long as they have a nice place to play and a good game. PCs are again a viable home for gaming.

__________

Those are the precise conditions in which digital distribution worked on the PC. Steam wasn't an overnight success, either. It took about 7+ years to get Steam to this point, which meant that Valve worked hard to build up a trust level, not only with publishers, but also with consumers. We mostly trust them at this point, and if something goes wrong, we can expect them to fix it. That's why we allow them to handle our game collection.

In short, Steam succeeds because it mostly serves the interests of the consumer. Every single one of those above points is great for consumers while happening to be good for developers too. When you put your customers first, things work out.

Compare that to some of the other backwards methods of digital intrusion offered by companies, like the PSPGo or Ubisoft's always-on DRM. Since neither of them works in the interests of the customer, they're villified and eventually ignored.

The question is this: Do you trust (there's that word again) another company to provide that experience? When Microsoft or Sony or Nintendo has an iron grip over the content they provide as well as the price they're willing to sell it for, do you believe, deep down, that they'll be willing to offer it at a fair price?

I say no.

And as long as it stays that way, digital distribution will stay the exception, rather than the rule.

David Jaffe on Digital Distribution

>Someone has positive comments about digital distribution...and for once I agree with them!

He goes on to add: "For me, digital distribution was a really big deal - just the fact that we're allowed to see games like Shadow Complex and Flower, games that would never be greenlit for $60 retail products.

"The idea of bypassing retail and speaking directly to the customer is pretty exciting," added Jaffe.

Agreed. That has been fantastic. We're seeing a larger variety of games because not every game has to be a AAA $60 game anymore. Can you imagine how outraged you would be if they tried to sell Mega Man 9 for $60? ;I mean, it's a fine game, but that would be crazy talk.

So, insofar as there's a large variety of games that don't necessarily have to sell for large amounts, digital distribution has been a boon, and it's important to realize that. There are two sides to every coin.

Digital Distribution Stats (Via Kotaku)

A study performed by the NPD Group has found that during Q3 2009 (August-September), 90% of all game purchases were "physical", meaning they came on a disc or cartridge. Leaving the other 10% of purchases to be...anyone? Yes, digital, meaning they were downloaded.

The study also had some interesting numbers on games piracy, especially if you're a Nintendo, Microsoft or Sony executive gripped by fear: "only" six million gamers admitted to downloading games illegally during the same period. Six million sounds like a lot, but the NPD Group say that's only 4% of all gamers.

And of that 4%, 72% of the pirating was being done on PC and Mac. So while console piracy is definitely a problem, it's might not be the epidemic some platform holders and publishers would have you believe.

Source

Run, Don't Walk To GOG.com

They're having a holiday sale right now.  I just got the Lords of the Realm Royal Edition (Lords of the Realm 1 & 2 and the expansion) and Beyond Good & Evil together for $11.  GO GO GO GO GO.

Digital Distribution And Dennis Dyack

Dennis Dyack loves digital distribution, but you'll notice something telling about his comments.  Before we get to them, remember how I said that digital distribution isn't good for the average gamer, and that they'll reject any system that isn't in their best interests?  Dennis Dyack thinks so too, so he's trying to make you think that it's good for you.  Take it away, Dennis:

"In some ways it's the absolute elimination of any hardware as far as the consumer is concerned, because the hardware is the cloud," offered Dyack, a long-time advocate of a single standard format for games. "It helps on so many levels because it resolves the piracy issue, which is a massive problem today, and the used games issue, because you buy something and it's yours forever – it resides on the cloud. These are wins for the consumers and wins for the game developers."

I love the quote at the end.  What exactly is the win for the consumer?  You notice that he doesn't really have any benefits.  Both of his supposed "problems" are only problems for the companies themselves.  For instance:

1. Piracy.  Piracy is the ultimate consumer-benefit system.  I mean, all the games you want and you don't have to pay?  SCORE!  Don't misunderstand me:  Piracy is not good for game companies, but "free" is the ideal system for a consumer.

2. The Used Games "Issue."  Oh, you mean the issue where you can buy a game for less than retail instead of being beholden to the company who makes the games?  Yeah, by all means, let's get rid of THAT.

Both of these issues are problems for the companies themselves and not necessarily the consumer.  Dennis knows this, so he's going to try and make it sound like these are issues for the consumer.  It's a hearts-and-minds battle, and one that they'll lose.  For instance:

People confuse a one console future as a monopoly and that's completely wrong.

His argument is that it would be easier for anyone to pick out games because it would be all the same console, which is understandable.  If your grandma wants to buy you a DVD, she doesn't have to find out if you use DVD-X or DVD-Y, if you're running version 6.2.4 of the DVD-X firmware, or if you're connected to DVDLive! so you can watch the bonus features.  However, the vast majority of consumers understand the multiple-console system.  It's not a rampant problem, so it's a gigantic solution for a tiny problem.

In a perfect world, a one-console future wouldn't be a monopoly.  In a perfect world, games would be just like DVDs or CDs, with one format that's easy to use for everyone.  However, Sony is already stepping all over the next high-def format.  When someone makes a Blu-Ray drive or disc, they pay money to Sony (which is why Nintendo will never put in a Blu-Ray drive in their systems).  Blu-Ray is now the only high-def format available, and Sony charges at least $5 to $15 more per disc than standard DVD.  They want to make money.

In what future can you see a company selflessly creating a console format that everyone can use and make games for and NOT gouge customers?  Nintendo won't.  They make copious amounts of money off of their consoles.  Microsoft won't.  They want a foothold in the living room.  Sony won't.  They just spent millions of dollars on Blu-Ray, so they're not going to make a new format anytime soon.  That leaves a mysterious fourth contender, a dark horse, to make this nebulous "one-world" open format that will work on all consoles.  It would need to be a company with the clout to tell three giants what to do.  Can you think of any company that fits that bill?  No.  All three companies are extremely rich and don't have to answer to anyone.

Dennis, it's understood that you want the cloud.  We get it.  It would be great for your company, but it's not going to happen no matter how much you want it.  It's not good for the consumer so they'll reject it.  The main console makers won't agree to it.  And a word of warning to developers:  If you put too much emphasis on it, you'll run into major problems down the line.

Will Digital Distribution Take Over Gaming?

A lot of companies are talking about digital distribution.  Activision wants it.  Sony wants it.  Microsoft wants it.  Nintendo has been dipping their toes in it.  Steam is taking off.  It seems that digital distribution is the way that things are going, right?  Within ten years, won't it be the norm to download your game or even stream it with a service like OnLive or Gaikai?

You might think so.  There's so much talk about it that you would assume that it's the next big step.  In fact, companies like Apple are showing that it can be done with iTunes on a huge scale and be wildly successful, so that should shut the book, right?  Let's dig in a little deeper and see if we can't figure out where the future of gaming lies.

Obviously, Apple has been amazingly successful with iTunes.  It's really one of the biggest success stories of the digital revolution, with millions of songs bought over the service.  However, most songs are 99 cents.  That's a cup of gas station coffee.  It's easy to drop a buck on a song if you like it, and if you don't like it, it was only a buck, so no huge loss.  It's a service that's set up to cater to the consumer's best interest, so it works.

Therein lies the key.  If a service is in the consumer's best interest, it will work.  Steam is a great example.  Steam not only provides a centralized hub a la XBox Live for your games, but it also provides protection against cheaters and the ability to install your games on any new computer.  It's not difficult to move your Steam account from computer to computer, and once you've purchased a game, it's always there.  Plus, Steam promotes the crap out of indie developers, sets fair prices when they can, and offers fantastic deals.  In the last few months, I've purchased World of Goo for $5 and Team Fortress 2 for $2.50.  Those are prices you would never find in any store under any circumstances.  On top of that, when people purchased the Orange Box, they were able to give away copies of Half-Life 2 and Episode One to other Steam users for free.  The whole system works in the customer's best interest.

Video game companies are trying to push digital distribution because it will help their bottom line.  Imagine, a world without piracy, with nothing but new games as far as the eye can see!  No packaging, manufacturing or shipping costs!  It's enough to make a publisher swoon.  However, here's the kicker: Most services will not be in the customer's best interest.

The PSPGo, for instance, is not in the consumer's best interest.  A system that doesn't work with my previous games or any of my accessories and costs more than other systems?  Where do I sign up?  Therefore, the PSPGo is failing.  Here's a money quote from Traveller's Tales founder Jon Burton: "I'm betting on Sony making PSP Go games much cheaper than the UMD versions, or the PSP Go will die."  It's telling that they haven't released any sales numbers for it but lump it in with their regular PSP numbers, unlike Nintendo who breaks down their numbers for the DS, DS Lite, DSi, and DSi LL.  It wouldn't surprise me if the PSPGo loses support from Sony and gets dropped sooner rather than later, since they tried something that was solely for their own benefit and not for the customers.

Another straight-line comparison is the Kindle, which has attempted to combine books and digital distribution.  The dream?  "All your books in one place!"  The reality?  "Some of your books in one place!  Oh, and you have to buy them from us.  And we can delete them at any time, but we won't do it anymore even though we could."  How is that in the consumer's best interest?  Kindles are selling in decent numbers, but e-books are not going to supplant regular old books anytime soon.  Why?

Well, because as bulky as books are, when you buy a book, it's yours.  No one can delete the book from your library without your knowledge.  You can read it as long as you have decent vision.  You don't need any special equipment to read books.  You pick it up and read it.  You can buy books for 50 cents at a garage sale.  Sure, it can be annoying having to get up from the couch and grab a different book, but no one complains about it.  That's because the majority of the time, it's in the consumer's best interest to own books rather than e-books.

Console makers have dipped heavily into digital distribution, with a plethora of games available for download at any time.  Is this proof that digital distribution is winning?  Not really.  Most of these games are $5 to $10.  In other words, they're cheap.  When Braid was priced at $15, there was a great hue and cry since that was more than consumers wanted to pay for a game.  They did, of course, but not without a lot of complaining.  It was weird to a lot of people, since we'll willingly pay upwards of $50 for a hard copy of a game.

Why the complaints over a simple $5 price hike?  With a game like Modern Warfare 2, if you don't like it you can trade it on Goozex, sell it on eBay or trade it to Gamestop.  You have options.  That $60 isn't lost forever.  If you buy Braid and you don't like it?  Tough.  It's yours now and forevermore.  For instance, I have games on my Wii that I bought and wish I wouldn't have, like StarTropics, Milon's Secret Castle, LostWinds and MegaMan 9.  These are games that received a lot of acclaim when they launched.  They're good games.  Reviews looked really, really good.  I played them and didn't really like them.  That's not a knock on the games themselves, it's just that they weren't to my liking, and now I'm stuck with them.  That's $34 frozen on my Wii that I'm never getting back.  That sort of disappointment is manageable when you're dealing with a $10 game.  Losing $10 isn't worth crying over.  However, losing $30, $40, or $50?  That's worth complaining about, and that's where digital distribution is headed.

Don't believe me?  Here's the cold, hard truth.  Nintendo has sold eight million copies of Super Mario Galaxy.  They've sold over eight million copies of Super Smash Bros. Brawl.  They've sold 16 million copies of Mario Kart Wii.  How much are those games?  They're still $50 apiece new.  Every other company has launched a "Greatest Hits" line putting their best-sellers at $20 apiece, but Nintendo steadfastly refuses.  During the Gamecube years, they reduced the amount of copies that was necessary to label a game a "Greatest Hit" from a million to 250,000 because they were in third place and needed to push more software.  Now that they're in the lead, they have no such need, so they're acting in the company's best interest rather than the consumer's.

Say it with me:  When a company is successful, they feel less responsibility to the consumer.  Think of it this way:  If you have one miniature candy bar and someone asks for it, you'll be extremely hesitant to give it up.  If you have several, you'll be more willing to give one up.  If you're sitting on mountains of miniature candy bars, you'll gladly throw a pile to your friends.  The same thing happens with a business.  If you have a small group of clients, you'll fight tooth and nail for them.  If you have a huge group of clients, you won't panic if a few of them leave the nest.  You'll start shedding some of your problem clients and focusing on the most profitable ones.  For instance, when was the last time Nintendo offered a special on Virtual Console games?  Sony and Microsoft will sometimes offer little deals, but that's only because they're trying to encourage more people to buy.  If they were in first place, they would behave the same or worse as Nintendo has.

A company's sole aim is not to entertain or make the world a better place.  Their only purpose is to make money, pure and simple.  Whatever makes money is what they will do.  If they can get more money out a customer, they'll gladly do it because that's what they're there for.  Their stockholders don't give them any bonus points for being nice people.  Another prime example:  Modern Warfare 2 was $60 in retail and $60 via Steam.  That price wasn't decided by Valve, but rather Activision.  Even though Activision's cost for the digital option is far cheaper than the retail version, they sold the digital version for the same price.  Why?  Well, why not?  People are going to buy Modern Warfare 2 whether or not you charge $60 for it.  Why not get more money out of the customer?

What's the harm?  Well, if you buy a $50 game, you really hope that it's good.  If it isn't, you know you can switch it out for a different game.  If you purchase a game digitally, you really hope that it's good.  If it isn't, you're stuck with it now and forevermore.  This means you will be less willing to purchase a $50 game unless it's a sure thing.  Companies are hesitant to lower prices on their games unless they're not selling as well as they'd like, in which case they'll lower prices reluctantly.  Put it all together and you will purchase fewer games, and only "sure thing," big budget games will succeed in this environment.

There are exceptions to this rule.  Steam has showed that, with proper promotion, indie games can succeed and thrive in a digital environment.  Valve is showing that there's a right way to offer digital distribution, and it's working.  It's valuable to the customer.  They promote games like World of Goo, Zeno Clash, and others that would have had a quick death at retail.  They're working in the customer's interests and not the company's interests, and it's benefiting the company.

But can you trust most companies to behave this way?  Take OnLive, for instance.  They have support from EA, Activision, all the heavy hitters in the industry.  OnLive needs the big companies, not vice versa, and those big companies can exert an enormous pressure on a small startup like OnLive.  Are they going to willingly bow to a nobody indie game?  We can safely say, after all the money that's at stake, that they're probably not going to want smaller indie releases to be promoted.  This means that the indie boom that's gathering steam could be quickly quashed by greedy companies.

Let's bring it all together.  Companies really, really want consumers to adopt digital distribution since it's in the companies' best interest.  However, they refuse to lower prices on their games even though it's cheaper to provide digital distribution than retail distribution.  Consumers buy less games, further weeding out the amount of companies that can do business, paring it down to a lucky few who are able to survive the bloodbath.  These companies will exert even MORE control over the gaming public at large, thereby making prices go higher.

Obviously, this is a worst-case scenario, but it shows how unreliable the idea of pure digital distribution is.  Fortunately, it won't happen.  Consumers simply won't buy something unless it's in their interest to do so.  The marketplace has a way of weeding out good and bad ideas, and we've seen that historically.  For instance, in 1996, McDonalds attempted to launch a line of upscale sandwiches with a $100 million dollar advertising campaign.  Their flagship burger was the Arch Deluxe, which was basically a fancy-pants version of the Big Mac for more money.  It was a bad idea so no one bought it even though McDonalds pushed it incredibly hard.  It wasn't in the interests of the consumer, so it died.

DivX was also a notable failure that launched in 1998.  DivX was a movie rental system that was $4 per disc for two days.  If you wanted to keep watching the movie, you had to pay $2 additional for two more days of use.  It doesn't sound so bad until you realize that they were trying make it the standard instead of the Open DVD format we enjoy today.  Consumers rejected it soundly and it died a death a short time later.  It was a system that was in the interests of the companies promoting it, but not the interests of the consumer.

In the video game world, the PS3 launched to a massive ad campaign and had the best graphics of any next-gen system along with downwards compatibility.  However, the price was ridiculous for the vast majority of users.  It was in the company's best interests, but not the consumers.  It wasn't until the price expectations were closer to the norm that it gained widespread acceptance.

You may argue that consumers will buy any old crap that's thrown their way as long as it's promoted, and to a degree that's true.  A few years ago, Big Mouth Billy Bass was one of the most popular items around.  It wasn't long ago that we were all swept away by the Macarena.  Snuggies are the current "it" product.  However, in each of these cases, these items aren't a fundamental lifestyle change.  They're items that can be used and discarded with minimal loss of money.  They're all cheap.  They're not big deals.

However, charging a customer for what amounts to a glorified rental is a big deal.  DivX failed because people don't want to pay for something that's not theirs.  Even though we're moving to a more virtual economy, we're still the same old people we've always been.  We like trading money for goods and keeping those goods in our physical possession.  Companies don't like that idea, but that's too bad.  You're not going to get consumers to suddenly forget about their own personal property rights when there is virtually no upside.  See, by and large consumers aren't stupid.  They know when someone is just playing them for fools or when they're being presented with an item that's legitimately useful to them.  Digital distribution has no upside.  It's not in the consumer's best interests.  Unless every company adopts Valve's excellent pricing structures and flexibility (which is highly unlikely), expect physical distribution to be the norm for a long, long time.

Delirious Cackle (PSPGo)

The UMD is set to return to the PSPGo thanks to a peripheral by Logitech!  Ah, delicious irony.

LOLOLOLOL (PSPGo)

No UMD conversion for PSPGo users!  Man, oh man, this just keeps getting better and better.

Basically, here's their sales pitch:  "Hey kids!  Buy this system where you won't own the games, won't be able to play the games you already bought, AND will cost you a lot more!  It's AWESOME!"

The Evolution of DLC

DLC is getting tossed around left and right lately.  In fact, Borderlands hasn't even shipped yet and Gearbox has already announced that they're working on the first DLC pack.  We don't even know if we're going to like the game yet, and they're already making more of it.  Some people are complaining furiously about this DLC explosion, and with good reason.

There are two different kinds of DLC:  There's the DLC that adds substantially to the game, like Fallout 3's different DLC packs that add 4-5 hours of gameplay or, I don't know, SPACESHIPS.  Then there's DLC like Madden's DLC: Adding in features that always used to be in the game by default, like cheat codes and the like.  What kind of DLC should be acceptable and what kind shouldn't?

First of all, DLC has always been around.  We called it "expansion packs."  Any game worth its salt got an expansion pack, and they were usually optional.  You didn't have to get the expansion pack in order to enjoy the full game.  You could play the entire story of Jedi Knight without caring whether or not you played Mysteries of the Sith.  You could play through Half-Life without needing or caring about Opposing Force, and so on.  It was a good arrangement:  If you needed more gameplay, it was there for the taking.  If you didn't, you didn't.  Case closed.

Expansion packs were usually outsourced to a different company.  For instance, Diablo's expansion pack, Hellfire, was made by Synergistic Software and Half-Life's expansions were made by Gearbox.  These expansions were usually not up to the same quality standards as the originals.  In fact, Hellfire made Blizzard so mad that they handled the expansion for Diablo II themselves.  Other companies followed suit, and the tide started to change.  When the original company handled the expansion, the quality went through the roof.  With the quality much improved, the expansions quickly changed from being optional to essential.

For instance, can you imagine trying to play Diablo II without Lord of Destruction?  Or what about playing Age of Empires II without The Conquerors, or Starcraft without Brood War?  The expansions deepened and improved on many of the concepts of the originals so much that you could no longer live without them.  There were other expansions that were just superfluous.  I love Alpha Centauri, but Alien Crossfire is unnecessary to enjoy the game, but it sold a few copies anyway.

Now, if you're a company and you have the opportunity to use the same assets you used to build a game in order to make just a tweak or two to your old game AND make more money off of it, you would have to, right?  Not so fast.  The issue with expansion packs is that you still have to box them and ship them out, one of the largest costs of game development.  What's a company to do?  There's a chance you might make more money, but there's also a chance that those expansions are going to sit on store shelves and eventually sell for $5.  Plus, your game has to have a big enough install base in order to justify an expansion, so you have to make sure your game is selling or at least going to sell before you make expansions for it.

The first shot across the bow of DLC was Elder Scrolls IV's infamous Horse Armor debacle.  Instead of making an expansion worth $20, for the low, low price of $2 you could give your horse some armor!  At the time, almost everyone was in agreement that we were going down a bad path.  "Soon," said the naysayers, "we'll be paying $1 for the ability to level up, $2 per potion, $5 for a sword not made out of cardboard!"

So far, those naysayers have been proven somewhat right and somewhat wrong.  For every game that uses DLC right (Fallout 3's excellent expansions) there are some that don't (Madden).  What the Horse Armor thing taught us is that people will willingly buy something additional if it's worth it.  If I have to pay $2 for something stupid there's no way I'm going to do it, in the same way that those who made expansion packs learned that people won't buy crap expansions.  In other words, DLC is good when it's substantial and priced right, bad when it's not.  Glad we cleared that up.

Digital Distribution Has Worked Out Sooooo Well For The Music Industry

Via NY Times:

A study last year conducted by members of PRS for Music, a nonprofit royalty collection agency, found that of the 13 million songs for sale online last year, 10 million never got a single buyer and 80 percent of all revenue came from about 52,000 songs. That’s less than one percent of the songs.

How crazy is that? And obviously, people didn't stop listening to music. So where did they get their songs from?

I'll let you put two and two together.

PSP Go a Ripoff?

Here's what Joystiq had to say:

Michael Pachter retracted one of the most correct statements he's ever made: the PSP Go is a "rip off" for consumers. The PSP Go takes away the expensive-to-manufacture UMD drive and replaces it with cheap flash memory -- and yet it still costs more than the current PSP-3000. Fun fact: You can buy a standard PSP and 16GB Memory Stick Duo Pro right now for less than a PSP Go.

Sure, the new form factor looks nice, but Sony should have no manufacturing costs to pass down to the consumer. MCV asked SCEE's Andrew House if R&D or retailer markups were the reason behind PSP Go's high price. "Those aren't the factors," House admitted. "When you introduce a new piece of hardware you have the opportunity to say there is a certain premium that is associated with it, and we took that into account."

Essentially, House is admitting you can charge more for technology when it's new. It's unsurprising, but it certainly leaves a bad taste knowing Sony can easily charge less for the PSP Go. Perhaps Sony will follow the iPhone's footsteps and suddenly drop the price of the PSP weeks after early adopters pay their "premium" price.

It wouldn't be the first time this has happened, sadly.

See, here's why the PSP struggles compared to the DS.  First, how many revisions of the DS have their been?  Three.  OK, that sounds like a lot, but consider that the original DS still works fine.  It's a little bigger, sure, but not awfully so.  There's no extra features on the DS Lite that make it more essential than the original DS.  It's just a smaller version.  In fact, you could argue that there's really only been one major revision of the DS, the DSi.  In the DSi, we saw WPA encryption, cameras, a faster processor, and flash memory as well as the removal of the now-vestigial GBA slot.  As of yet, there are no DSi exclusives except for DSiWare games.  Anything you can play for the DS works on the DSi or the DS Lite.

However, the PSP has undergone four separate revisions, and the Go is the biggest of them all.  Some of the earlier revisions are fairly obsolete, with bad batteries and weird button layouts as well as weird speaker placement.  Even the supposedly game-changing Go isn't easy to hold for people with small hands.  Many also speculate that the higher sales of PSPs are only there because of how easy it is to crack.  So will the Go really help Sony?

Now, Sony's strategy has a couple of parts to it:  Launch the Go at a premium price, and then launch great games alongside it in UMD-less formats so that you HAVE to play the games on the PSP Go.  There's a major flaw here.  You have 50 million users of your system.  Sure, they can download games too, but let's say that 30 million of them will choose not to.

(30 million is an arbitrary number, but more than likely realistic.  Handhelds appeal mostly to a casual crowd.  A lot of casual players don't care about downloadable games.  Also, there are huge amounts of modded PSPs floating around worldwide.  Also remember that since 2007, we've seen about 30 million PSPs sold, but the ones before then are using old firmware or aren't getting as much use.  By point of comparison, I would say that less that 10 percent of Wii owners, or 5 million Wiis are online.  It's still a substantial number, but not as much as you'd think.  This has been a special message from the department of pulling numbers out of my butt.)

If that's the number of people who aren't going to use the internet on their PSP, you're shutting off 3/5 of your customer base.  Now, you're selling games to 20 million people instead of 50 million.  That puts you back in the same boat as you had before 2007: Not enough install base for the games that you're selling.

"But the sales for the PSP Go will be great, so they'll offset that."  Now we go back to the quote at the beginning from Joystiq.  Sony's charging more than they should.  The hardcore, who are Sony's bread and butter this generation, know that and they're okay with their PSP-3000s.  I understand that Sony has to make a profit somewhere along their line because the PS3 isn't working out for them like they'd hoped.  Still, it's tying off a large portion of your customer base just to make a little bit more money.  Is it worth it?

Will they still sell a lot of units?  Yes.  Definitely.  Will it be a resounding success?  Maybe.  Will it still put Sony in trouble down the line?  Yes.  It all smacks of robbing Peter to pay Paul, but more power to them.  I'm sure an argument can be made FOR the move as well, and I look forward to seeing some.

OnLive Sounds Really Cool

OK, check this out.

This might solve all the problems I have with PC games. Color me intrigued.