• Enjoy the freedom to innovate and grow your business


    [ad] With Microsoft Azure you have hybrid cloud flexibility, allowing your platform to span your cloud and on premise data centre. Learn more at microsoftcloud.com.

  • IT Admin: No Time to Save Time?


    [ad] Do you spend too much time patching machines or cleaning up after virus attacks? With automation controlled from a central IT management console accessible anytime, anywhere – you can save time for bigger tasks. Try simple IT management from GFI Cloud and start saving time today!

  • Free Forrester analysis of CRM solutions


    [ad] In this 25 page report, independent analyst house Forrester evaluates 18 significant products in the customer relationship management space from a broad range of vendors, detailing its findings on how CRM suites measure up and plotting where they stand in relation to each other. Download it for free now.

  • Great articles on other sites
  • RSS Great articles on other sites


  • Reader giveaway: Google Nexus 5


    We’re big fans of Google’s Nexus line-up in general at Delimiter towers. Nexus 4, Nexus 7, Nexus 10 … we love pretty much anything Nexus. Because of this we've kicked off a new competition to give away one of Google’s new Nexus 5 smartphones to a lucky reader. Click here to enter.

  • International - Written by on Monday, February 6, 2012 11:34 - 0 Comments

    Digital downloads: Are boxed games about to disappear?

    Powered by Guardian.co.ukThis article titled “Digital downloads: Are boxed games about to disappear?” was written by Keith Stuart, for theguardian.com on Friday 3rd February 2012 14.53 UTC

    During a conference call to investors and analysts on Wednesday, Electronic Arts revealed some rather impressive – and telling – figures. Apparently, the company’s revenue from digital games exceeded bn in 2011.

    Its controversial download service Origin generated 0m through the year, its social and casual games performed well, and its online multiplayer release – Star Wars: the Old Republic – managed to attracted 1.7 million paid subscribers barely a month after its launch.

    Of course, the publisher’s boxed big-hitters – Fifa 12 and Battlefield 3 – did good business too, selling 10m units each, but the thrust of the company’s attempts to claw back into profit are coming from the digital sector.

    Meanwhile, fellow publishing veteran THQ is reported to be in dire straights, cutting staff and facing a Nasdaq delisting.

    Although the company was one of the first publishers to recognise the rise of mobile gaming with its THQ Wireless arm, it has not succeeded in transferring major brands such as Saints Row and Darksiders to mobile and social platforms. In fact, it sold its Wireless division in February 2011, while a lacklustre Facebook version of Saints Row did little to take on the likes of Mafia Wars at its own game.

    THQ’s problems no doubt run deeper than failing to exploit the rise of digital downloading, but it seems as though the future of traditional publishers is going to rest on how well they’re able to explore the online, mobile and downloadable possibilities of their brands.

    Physical media, though beloved of hardcore gamers, is generally suffering. The high street chain Game is facing its own major difficulties – financing problems have led to rumours that its stores would be unable to stock the week’s new releases; though the company has since confirmed that the likes of Metal Gear Solid HD and Final Fantasy XIII-2 will be on sale this weekend, and that it has secured new deals with lenders.

    Meawhile, digital newcomers are flourishing. Freemium publisher BigPoint announced on Tuesday that it now has 250 million users of its free-to-play online games; on the same day, web gaming company Spil Games, revealed that it now boasted 170 million unique users, with many of its customers spending up to £38 a month on virtual goods. A recent report by Juniper Research claimed that in-game purchasers would be spending .8 billion by 2016.

    "My basic argument for digital generally is that, first, it allows the publisher to reach a massive audience at no marginal cost, by going free," says games industry analyst Nicholas Lovell.

    "Secondly, it allows you to let the people who love what you do to spend lots of money – for example, the Bigpoint users spending €1,000 on a drone.".

    Unsurprisingly then, smaller developers are increasingly adopting digital-only agendas. On Monday, the UK game developer trade body, Tiga, released a report showing the impact of digital downloads on British studios.

    Apparently, 102 British games companies are currently developing browser and download-based casual online PC games. These studios released more than 600 titles in 2011 and employed nearly 700 development staff, contributing £70m to the UK’s GDP.

    "We are fast approaching the tipping point," says Tiga managing director Dr Richard Wilson. "UK retail sales figures for video games have been in decline for several years now, but all the indications are that digital consumption of games is increasing.

    "Tiga research from 2011 shows that 50% of UK developers regard retail as the largest monetisation mechanic for their games. However, 47% say their games are also sold via online stores such as XBLA and the Apple App Store. 13% generate money from subscriptions, 26% via micro transactions and 29% use free-to-play mechanics.

    "Additionally, almost half of UK developers are now self-publishing online or on mobile. The shift towards digital distribution is enabling developers to become self-publishers and reduce their dependency on publishers. It should also allow more innovation and choice for consumers."

    But more telling than new titles and fresh ideas are the possibilities for older brands in the digital space.

    Earlier this week, the veteran MMORPG Everquest became a free-to-play title after 15 years as a subscription service. Long past its incredible peak as a massively multiplayer phenomenon, profit can still be made via a freemium model that will make the game more attractive to casual users.

    Meanwhile, publishers such as Ubisoft, Konami and Capcom are busy filling the online stores of the PlayStation 3, Xbox 360 and Wii consoles with spruced up versions of classic titles, as well as fresh additions to nostalgic lines such as Rayman.

    While the ability to sell DLC and create free-to-play titles is enticing, it might be that the real driver into a digital-first business is the ability to exploit that old internet chestnut, the long tail.

    In packaged-goods retail, games have a very short shelf life and need to make all their money in the space of a couple of weeks. After that, titles get shoved into the back catalogue. Years ago, there was another opportunity to make money here via special cheaper editions of old games – the PlayStation Platinum range, for example.

    However, that market has been all but destroyed for publishers by the rise of the pre-owned sector. Go into any branch of HMV or Game and you’ll usually only see a chart display of new titles, and then a huge area dedicated to second-hand titles.

    That’s because retailers make 100% of the revenue from these second purchases – there’s little benefit for them in providing shelf space to first-hand copies of older titles.

    In the digital space, though, publishers can keep flogging old titles indefinitely. When the title is out of the charts, it can be kept alive with DLC; after this, there are price reductions on digitally distributed versions of the original games. And then, on titles like Everquest and Lord of the Rings Online, there’s the option to convert to a freemium model.

    For new titles, the digital arena is more complex. As Lovell points out: "Chris Anderson’s original definition of the long tail is that in a world of infinite space, everyone can get on the shelf. But the App Store shows that just being on the shelf is no guarantee of sales.

    "The App Store has hundreds of thousands of apps, and the long tail players are not making much money." Indeed, research released last autumn by developer Owen Goss showed that 50% of game apps on the App Store make less than ,000 (£1,900).

    And over in the social and casual gaming spaces, it’s not old brands that are being regurgitated, it’s old ideas. Zynga’s release of Dream Heights on iOS has prompted a furious response from bloggers who feel it is effectively a rip off of NimbleBit’s hugely successful iphone game Tiny Tower, merely adding a social layer.

    The cloning of games has become a huge issue in the sector, but with little in the way of legal recourse, it is running amok.

    And really, the digital gaming princples behind continually re-inventing old brands for new business models and continually "borrowing" other studios’ successful ideas are the same.

    It’s all about mining proven concepts for all they’re worth in a marketplace that allows swift development, easy distribution and lightening fast iteration based on rapid customer feedback.

    Those who imagine that the tipping point from physical media to digital distribution will herald a new era of fresh innovative gaming experiences could well be hugely mistaken.

    We may be about to enter a new epoch in which the digital sector transmogrifies into one giant thirft store – your favourite game ideas served back to you in different forms on different platforms by different publishers, forever.

    guardian.co.uk © Guardian News & Media Limited 2010

    Published via the Guardian News Feed plugin for WordPress.

    Image credit: Nintendo

    submit to reddit
    Comments are closed.


    Get our 'Best of the Week' newsletter on Fridays

    Just the most important stories, one email a week.

    Email address:


  • Most Popular Content


  • Six smart secrets for nurturing customer relationships
    [ad] Today, we are experiencing a world where behind every app, every device, and every connection, is a customer. Your customers will demand you to be where they and managing customer relationship is the key to your business’s growth. The question is where do you start? Click here to download six free whitepapers to help you connect with your customers in a whole new way.
  • Enterprise IT stories

    • Greens claim NSW LMBR project turning into a disaster sydney

      The NSW Greens late last week claimed to have obtained documents showing that the NSW Department of Education and Communities’ wide-ranging Learning Management and Business Reform program, which involves a number of rolling upgrades of business administration software, was deployed before it was ready, with “appalling consequences for administrative staff, principals, teachers and students”.

    • NSW Govt trials inter-truck safety devices trucks-cohda

      The New South Wales Government has inked a contract with connected vehicle technology supplier Cohda Wireless, as part of a trial of so-called Cooperative Intelligent Transport Systems (C-ITS) which allow heavy vehicles to communicate directly with each other about their position on the road to help reduce road accidents.

    • Victoria finally kills $180m Ultranet disaster thumbsdown1

      The Victorian Government has reportedly terminated its disastrous Ultranet schools portal, which ballooned in cost to $180 million over the past seven years but ended up being barely used by the education stakeholders it was supposed to serve.

    • NetSuite in whole of business TurboSmart deal turbosmart

      Business-focused software as a service giant NetSuite has unveiled yet another win with a mid-sized Australian company, revealing a deal with automotive performance products manufacturer Turbosmart that has seen the company deploy a comprehensive suite of NetSuite products across its business.

    • WA Health told: Hire a goddamn CIO already doctor

      A state parliamentary committee has told Western Australia’s Department of Health to end four years of acting appointments and hire a permanent CIO, in the wake of news that the lack of such an executive role in the department contributed directly to the fiasco at the state’s new Fiona Stanley Hospital, much of which has revolved around poorly delivered IT systems.

    • Former whole of Qld Govt CIO Grant resigns petergrant

      High-flying IT executive Peter Grant has left his senior position in the Queensland State Government, a year after the state demoted him from the whole of government chief information officer role he had held for the second time.

    • Hills dumped $18m ERP/CRM rollout for Salesforce.com hills

      According to a blog post published by Salesforce.com today, one of Ted Pretty’s first moves upon taking up managing director role at iconic Australian brand Hills in 2012 was to halt an expensive traditional business software project and call Salesforce.com instead.

    • Dropbox opens Sydney office koalabox

      Cloud computing storage player Dropbox has announced it is opening an office in Sydney, as competition in the local enterprise cloud storage market accelerates.

    • Heartbleed, internal outages: CBA’s horror 24 hours commbankatm

      The Commonwealth Bank’s IT division has suffered something of a nightmare 24 hours, with a catastrophic internal IT outage taking down multiple systems and resulting in physical branches being offline, and the bank separately suffering public opprobrium stemming from contradictory statements it made with respect to potential vulnerabilities stemming from the Heartbleed OpenSSL bug.

    • Android in the enterprise: Three Aussie examples from Samsung androidapple

      Forget iOS and Windows. Today we present three decently sized deployments of Android in the Australian market on Samsung’s hardware, which the Korean vendor has dug up from its archives over the past several years for us after a little prompting :)

  • Enterprise IT, News - Apr 23, 2014 15:58 - 4 Comments

    Greens claim NSW LMBR project turning into a disaster

    More In Enterprise IT


    Blog, Telecommunications - Apr 24, 2014 14:00 - 11 Comments

    iiNet to splurge $350m on content, media

    More In Telecommunications


    Analysis, Industry - Apr 24, 2014 16:05 - 0 Comments

    Free to fail: Why corporates are learning to love venture capital

    More In Industry


    Blog, Digital Rights - Apr 23, 2014 12:57 - 37 Comments

    Cinema execs blame piracy for $20 ticket prices

    More In Digital Rights