Technologizer

Microsoft is being Microsoft and stepping into a market that the competition proved fertile a long time ago. This time, the company’s offering on demand downloads of PC games, going toe-to-toe with Steam, GamersGate, Direct2Drive and others.

The service, called Games on Demand, launches on December 15 as part of Games for Windows – LIVE. (I guess that awkward en dash prevents people from thinking of Windows Live, which is something entirely different. Chalk it up to bad naming habits, maybe?)

Anyway, I’m scratching my head, looking at Microsoft’s press release and trying to determine how Games On Demand will distinguish itself from the competition, particularly Steam, which rules the market. Looks like a pretty straightforward download service to me, but the company swears this one is different: “With Games on Demand, we didn’t just want to create a cut-and-paste version of existing digital distribution services,” Mike Ybarra, general manager of Live Engagement Services, boasts.

The one specific benefit Microsoft describes is the ability to “re-install your games whenever you want, wherever you want.” Steam does that too, because games are linked to your Steam account, rather than a specific computer. As for games, Steam already sells everything Microsoft lists as launch titles, including Resident Evil 5, Red Faction Guerrilla, Battlestations: Pacific, World of Goo and Osmos. Also, the features you get with Games for Windows look pretty much like Steam, with matchmaking, voice chat, text messaging and achievements.

I’m not questioning Microsoft’s move — they’re now selling game downloads on the Xbox 360, so they might as well get some PC action too — but I don’t see any clear reasons for gamers to abandon the download services they already use.

Just days before Call of Duty: Modern Warfare 2 is released, several digital retailers have decided not to sell the game.

Is it because of that controversial scene where the player acts out a terrorist attack? Nope. It’s because the game’s PC version uses Steamworks, a software platform for multiplayer match creation, downloadable content and anti-piracy measures. Direct2Drive, Impulse and GamersGate say they oppose the forced installation of third-party software on players’ computers (Direct2Drive calls Steamworks “a Trojan Horse”), and so they are sitting out on the biggest computer game of 2009. Bold move.

Of course, that’s only the official story. Steamworks is a part of Steam, Valve’s digital distribution service that happens to compete with the boycotting retailers. As 1UP so eloquently put it, “having to fire up Steam to play the game you bought from Direct2Drive is a lot like having to walk through a McDonald’s every time you want to eat a Whopper,” so you can understand the retailers’ position.

The bigger issue is that Modern Warfare 2 is taking away many of the things PC gamers love about PC gaming. Last month, chaos ensued when developer Infinity Ward said there would be no dedicated servers allowed for multiplayer matches. Instead, everything will be handled though a console-style matchmaking system, and the game won’t support user-created mods either. (Ars Technica has a nice rundown of how messy this situation has become).

The forced implementation of Steamworks ties into those earlier developments as a way of controlling the PC gaming environment, and making it more like the Xbox 360 or Playstation 3. The problem is, that’s not what PC gamers want. Modern Warfare 2 will probably sell well on the PC anyway, but it’ll be a neutered experience, and one that hurts the free spirit of PC gaming as a whole.

Peter Molyneux, the ever-mouthy creator of the Fable video game series, is spouting off about video game demos and why they’re worthless.

“I hate demos,” Molyneux told Official Xbox Magazine. “I think demos are the death knell of experiences.” He then explains that most demos either show too much, don’t show enough or confuse the player. His solution? Tease people with the first 45 minutes of a game, then pitch them on the full version.

That’s not a groundbreaking idea, as pretty much every Xbox Live Arcade title lets you download the whole game and play a small portion, then charges you to “unlock” the rest. Some PC game portals, such as Big Fish Games, let you download any game and play for an hour.

But Molyneux is alluding to a bigger issue, that downloadable games are more conducive to demos than boxed retail titles.

Partly, that’s because boxed games are often greater in scope than downloadable games. After 10 minutes of an Xbox Live Arcade title, such as Braid, you can get the gist. But 10 minutes wouldn’t do justice to the massive environments of Fallout 3, which is why the developers of that game said a demo was simply not possible. Demos of downloadable games are also more attractive to publishers, as it’s easier to make an impulse purchase when all you need is a credit card nearby to keep playing.

Molyneux’s Fable II is an anomaly, because it was once a boxed title, but it’s now being chopped up into downloadable episodes. A 45-minute demo gives Fable II the best of both worlds, as players will have already downloaded the full game, and will be able to experience a significant chunk before deciding whether they want the rest. Molyneux can be somewhat arrogant with his public statements (see: rating his own game a 9 out of 10), but he may be onto something here.

Those who want in on Sony’s download-only PSP Go will have to leave their disc-based games behind, as there won’t be any way to convert games from UMD to digital form.

Delivering the bad news to Kotaku, Sony said that “due to legal and technical reasons we will not be offering the program at this time.” Sony didn’t elaborate on its reasons, but I can take a crack at it:

When Sony announced the PSP Go at E3 this year, John Koller, Sony’s hardware marketing director, said that a “good will program” to convert UMDs would be announced soon. There was speculation that retailers would convert UMD games through kiosks at their stores.

That sounds good in theory, but in practice it’s a nightmare. If a store such as Gamestop kept the UMDs after every conversion, it wouldn’t take long before stores become overwhelmed with used PSP games. The value of those games would plummet, forcing Gamestop to lower its prices, which I’m sure it doesn’t want to do.

Then, there are the game publishers, who’d have to agree on letting their UMD-based games get copied into digital form. That’s messy enough from a legal standpoint, but it has no benefits as a business proposition. Unless Sony planned to pay publishers for their cooperation, digital conversion would only amount to a lost sale, with retailers selling the used UMD copies instead of new ones (at greatly reduced prices, mind you).

In the end, I doubt there was enough “good will” from all parties involved to push a conversion program through. I’m reminded of how Sony once promised that the Playstation 3 would be backwards compatible with Playstation 2 games, only to have that support erode steadily over the years.

Adding insult to injury for U.S. customers, there’s a rewards program in Europe where existing PSP owners will get three free games for buying and registering their PSP Go. That program won’t come stateside, as a Sony representative explained that the U.S. has a “dual platform strategy.” In other words, don’t upgrade.

Addressing what increasingly seems like a glaring omission in its sales charts, The NPD Group says it will start tracking sales of downloadable video and computer games.

That’s important if you’re at all interested in how gaming is changing. NPD finds itself in headlines every month, when it releases sales figures for games and consoles. When we want to know if games are in a recession or whether an experimental game idea worked out commercially, NPD is usually a good resource.

But lately, it seems like the group’s sales figures don’t provide the whole picture, and NPD itself knows it. NPD’s corporate marketing director David Riley told MCV that tracking game downloads will reduce “the spin, and in some cases, misleading information that often appears on the internet.”

It’s not clear who Riley was pointing that comment at, but I think game publishers shoulder at least some of the blame. We usually only hear about the performance of downloadable content when it’s wildly successful (see the popularity of Shadow Complex for the Xbox 360). Even then, the news is just a flash in the pan, and we have no way to track the performance of a downloadable game over time. I’d definitely like to see, for instance, how the shelf life of a downloadable game compares to a boxed retail title.

NPD was short on details for this plan, which seems awfully ambitious. The group plans to track console, PC and mobile games, which, as Joystiq points out, would comprise a lot of distribution channels, including small, independent outlets. No start date has been announced, and NPD didn’t say whether it will track downloadable add-ons for existing games, or just full games.

Still, I look forward to whatever NPD puts together. For understanding how digital distribution is changing video games, anything’s better than nothing.

With Sony launching the download-only PSP Go next month and Microsoft recently launching premium game downloads over Xbox Live, the seeds are planted for a fully digital future.

For the most part, I’ve viewed this as a good thing, but an editorial by Jim Sterling at Destructoid today gave me pause. Entitled “Fearing the future of digital distribution,” Sterling argues that digital distribution, for all its convenience, will come at a price. Game publishers will dominate the marketplace, Sterling writes, offering no refunds, no used game sales and “no accountability whatsoever,” merely because they can. I disagree.

The current behavior of Microsoft and Sony make for inviting red flags in Sterling’s argument. The Xbox 360’s Games on Demand — downloadable games that also sell at retail — are often more expensive to download than they are on disc. And Sony will sell downloadable PSP games that cost more than their boxed counterparts. “The games industry will set its own price at whim, and without any more alternatives, consumers will have no choice but to pay whatever they’re told to pay or simply stop buying games altogether,” Sterling writes.

The problem with this is that it’s based on limited examples. Though Sterling acknowledges that doom-and-gloom is only one possible outcome, it’s hardly the most likely.

Downloads won’t dominate unless consumers endorse the idea, and that requires incentives. Without a reason to go digital — for instance, better value over a hard copy, or rewards for loyalty — consumers will stick with Gamestop. Publishers, in turn, won’t fully commit to digital because there’s no market for it.

Even if console makers slowly grab more market share with downloads, to the point that physical media is out of the equation, it won’t mean the end of competition. In fact, it’ll create more of it. I see a future where a gaming console isn’t only about the best graphics and most exclusive games, but how much value exists in the digital marketplace.

The store that treats its customers the best and offers the most incentive to shop will prosper, while the oppressor will find a smaller audience overall. That’s nothing to be afraid of.

During the first week after Microsoft released Shadow Complex for the Xbox 360, something extraordinary happened: Over 200,000 people plunked down $20 $15 to download the game.

That makes Shadow Complex — an exploration-themed shooter in the same vein as the classic Metroid — the most downloaded single-player Xbox Live Arcade game to date. Compared to boxed retail games, 200,000 sales for a downloadable game isn’t too shabby, either.

There are a few reasons why this is important news. Foremost, at $20 $15, Shadow Complex is expensive for an Xbox Live Arcade game. Prices for these downloadable games have been trending upwards lately, not because Microsoft is gouging its customers, but because the games themselves are becoming more substantial. To put it another way, they’re worth the money you pay for them, and the big numbers for Shadow Complex prove that this trend is worthwhile.

Shadow Complex is also a bigger game, in megabytes, than its peers. For a long time, Microsoft restricted the size of Xbox Live Arcade games to 50 MB. This allowed all games to fit on a memory card so Xbox 360 owners who didn’t buy a hard drive could play along, but it put constraints on game development. Since then, Microsoft has slowly let the size of Xbox Live Arcade games creep upwards. Shadow Complex measures 835 MB, and its strong sales show that Xbox Live Arcade games don’t necessarily need to hold back in file size to be successful.

Finally, Shadow Complex is a good, long-lasting game that returns to the 2-D platforming style of the NES and SNES era. It’s not retro, per se, nor is it a cash-in on an old franchise or a casual game with Wii Sports-like appeal, but it nonetheless caught the interest of Xbox 360 owners. Marketing and hype certainly helped, but so did uniformly positive reviews.

With the cost of big-budget game development spiraling upwards, the games industry is practically killing itself. Smaller, downloadable games could be the way out, provided they’re substantial enough to satisfy hungrier gamers. With all this in mind, we should be expecting and hoping for more games like Shadow Complex.