The collectors
Ownership is a basic human desire - one which digital distribution advocates ignore at their peril.
Published as part of our sister-site GamesIndustry.biz' widely-read weekly newsletter, the GamesIndustry.biz Editorial is a weekly dissection of one of the issues weighing on the minds of the people at the top of the games business. It appears on Eurogamer after it goes out to GI.biz newsletter subscribers.
What does the concept of "ownership" mean to consumers? On the surface, that's a fairly abstract, philosophical kind of question - but it's also a question which strikes to the heart of the ongoing debate about the future of games distribution.
Our most common system is, by and large, ownership based. Consumers pay a flat fee to buy a game - the product is the physical media itself, and as with any other physical product, owning it brings certain rights. Consumers can sell it on, or lend it to friends. They can play the game whenever they want, at no extra cost. They can actually display the product on their shelves, an often overlooked factor which is extremely important to many consumers, especially the over 30 age group.
There are essentially three systems which are being proposed as replacements. The subscription model, as used by most MMOs, can happily tie in with the concept of owning physical products, but removes the ability to sell the game. You can sell the physical media, but the purchaser can't use it to create an account in the game.
The digital distribution model eliminates physical media and resale rights entirely, but retains the concept of ownership in the broad sense - you purchase, not rent, the license to the game. Finally, the live streaming system proposed by (arguably technically questionable) projects like OnLive basically removes the concept of ownership entirely.
More than any technical challenges - or any particular desires on the part of games publishers - it's this fundamental difference in the approach to ownership which will, I believe, determine the eventual roles of each of these new forms of distribution.
Different market segments have different approaches to ownership. I don't think it's going to be possible to wean the planet's self-identifying "gamer" demographic - which could encompass up to 200 million people - off the desire for ownership. It will be equally difficult to wrest ownership from the hands of people with collecting, hoarding mentalities - which accounts for a pretty significant chunk of the entire human race.
For other groups, however, it's far more natural for entertainment to be transient and streamed, rather than being permanent and owned. People who watch TV or listen to radio in preference to buying DVD box sets or albums, or people who rent rather than buying their videos, are an obvious market for less ownership-focused approaches.
In a simple world, then, a publisher would choose the right kind of distribution and revenue model for each product based on its demographic appeal. To some extent, this already happens - one could argue that the distinction between web games, which are inherently a streamed service, and boxed games, which are an owned product, reflects exactly that balance.
We do not, however, live in a simple world. The reality is that no consumer sits exactly in one demographic group or another. Even today, media consumers all demonstrate a bewildering variety of purchasing behaviour.
Most consumers buy some things outright - usually DVDs, albums and boxed games - but also happily consume streamed media in the form of TV or radio, rent some other media and pay subscriptions for media like magazines, newspapers and MMOGs. They make choices on which ways to access each of those media depending on perceived value, the desire for ownership and a host of other factors which constantly shift about.
One could argue that recent years have seen one particularly noticeable shift among those factors - a general movement away from the importance of ownership. Consumers have become more accustomed to media products being digital, not physical, and more accepting of previously unpopular ideas like owning a non-transferable license or account, rather than a product which can be resold. Rental systems and subscription based services have been in the ascendant.
This tide, however, could turn. Consumers on the whole are gradually becoming more aware of digital rights, and the real consequences of handing such a huge degree of control to corporations. Burned badly by often ill-conceived services such as subscription music stores or DRM video providers who shut down their authentication servers when the cashflow dries up, consumers with digital rights nightmare stories are gradually pushing public opinion in exactly the opposite direction to the general media industry consensus.
That push will easily be enough to kill some services. The most restrictive or abusively designed services, those which entirely rob consumers of a sense of ownership or which simply aim to increase revenue without providing a corresponding increase in value, will not succeed - no matter how appealing they may seem to publishers. The experiences of both the music and movie businesses have shown that even business models with wide industry support can fail badly if consumers start to get cold feet over restrictive conditions or unappealing financial terms.
Those industries are, slowly but surely, starting to understand that the only way to keep consumers on board is to focus on creating services which consumers love, rather than services which executives love.
In some cases, whole industries are effectively dragged kicking and screaming into this reality - witness Apple's relentless bullying of music companies into accepting high-quality, DRM-free distribution on the iTunes Music Store, when the music firms themselves far prefer music services with restrictive DRM and monthly subscription fees. The subscription services are a wet dream for an industry whose bottom line has been heavily dependent on getting consumers to pay repeatedly for the same content - the downside, however, is that most consumers hate them, in part because they take away any concept of owning or collecting music.
Services like iTunes, and indeed like Steam and the various download services on consoles, generally occupy a middle ground which the majority of consumers find quite comfortable. It's a lot easier to take the leap from physical products to digital products when the concept of ownership is retained and the restrictions on what you can do are relatively light.
At present, these services still lack the ability to lend or resell your products, which is likely to keep the physical product market (and, sadly, the piracy scene) fairly healthy for many years, but it's clear that these services are the comfort zone for most game consumers right now.
There is undoubtedly room in the market for more radical business and distribution models - but rather than rushing in headlong at the prospect of cultivating new revenue streams, the industry would do well to remember that the desire to own things is basic human nature, and no amount of boardroom wishful thinking will change that.
For more views on the industry and to keep up to date with news relevant to the games business, read GamesIndustry.biz. You can sign up to the newsletter and receive the GamesIndustry.biz Editorial directly each Thursday afternoon.
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Comments (70) Latest comment 3 years ago
Comments threads automatically close after 30 days, but please feel free to continue chatting on the forum!
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I must say, I'm surprised at how addicted I've become to watching my Steam Games List grow. Years ago I was firmly in the camp that hated digital downloads - why buy something virtual when you can have a physical symbol of your nerdage?
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However, it's true that iTunes has succeeded where many predicted the subscription service would rule.
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The only serious counter argument I can think of is, maybe not producing thousands of CD's and plastic cases is perhaps better for the environment? Unless all the extra computers and stuff (see how technical I can be) needed for digital distribution is perhaps even worse?
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Both have their pluses, but I'd hate to see physical media completely abolished in ten years' time.
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Still like my CDs (and books - not that there's a real alternative), but for films and games, I can easily do without a physical data carrier now.
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The same goes for Microsoft as well, just look at the price they charged for the Xbox Originals!
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One of the reasons why iTunes is more successful than any games download service is that it gets that balance right. It's not always cheaper than retail stores, but it's fairly competitive on new releases and it does something which they don't do - it allows you to pick and choose album tracks and buy them individually. Right now, game digital distribution services aren't competitive on price and don't give any extra functionality for the premium. That needs to change.
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However, now it seems Broken Steel and Point Lookout will have their own disc release. I can't wait that long to play Point Lookout. But if I see this second expansion disc going cheap somewhere next year, I just know I'll have to buy it for collection purposes... :s
Well, they say the first step is admitting you have a problem
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The way i think about what to play is looking at my shelf....keep forgetting what i have downloaded
...and...lets face it via digital they're going to charge just as much and not discount as much either
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Generally my digital purchases are done in 2 situations:
1 - You can't get them in a box
2 - The deal is very good, and better than the physical media (some of steam's weekend deals etc)
If it doesn't fall into 1 or 2 I get the boxed version, if I can find it.
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I am warming to digital distribution. Music now DRM free means I'm buying music again and rarely buy a CD (unless I nab a bargain), movies now I'm icthing for Sony's video store. Games to, I've started renting off Metaboli and I buy off PSN/Live.
But I do like boxes to. Not so much with music I think that's dead and buried, but movies, TV I love boxsets and collections that look good on the shelf packed with extras. Many games still I love having them on my shelf to.
/ stares at RE, MGS, GTA games and smiles
Hopefully in a ideal world both can live in harmony. But as we all know the ents industry is not an ideal world, it's a horrid DRM hardware tied evil horrid, disgusting, slime sucking, filth licking, Michael Jackson hating mess.
Like these download portable versions of movies for instance, my Mrs nabbed Hancock on blu. I had a look at it using the PSP download. She had a business trip and wanted to watch it on her PSP to as she hadn't watched it yet. Couldn't use bloody disk again! OK so I try to take it off my PSP for hers. Can't bloody find it, it's hidden....and they wonder WHY people download???? I mean FFS is it really that important to stop a few poor or greedy people nabbing a free watch? Is it worth PUSHING people to torrents?
I just hope gaming DD at least follows Sony's route. Download on five machines, even give people your game. good stuff - although I doubt their movies will be free of evil horrid, disgusting, slime sucking, filth licking, Michael Jackson hating DRM.
/ plays his evil horrid, disgusting, slime sucking, filth licking, Michael Jackson hating DRM free Michael Jackson album on his PC,PS3,PSP,360,Girlfriends PC etc, etc...
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Me, I couldn't care less about owning the disc and the box. All they do is clutter the place up. I've bought one DVD video in my life, and that was only because there was nothing else to do that day. I dont even know where to put it now. It's been many years since I bought a music CD.
However I do get disc versions of most of my games because of the price - and it looks like that's something we can all agree on. There's no pont in a digital version costing more than the disc version, even if the digital versions are more convenient.
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Where as I have bought hundreds. Got a great collection.
It is hard to choose something to watch at times tho
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Eliminate the second hand market, you not only kill an entire industry, but the VAST majority of gamers, those on low incomes, who rely on trading their games in and buying second hand ones - will be forced out entirely. And that will only harm the games industry more. Which I suppose will lead to the average price for a new game on these services going up, and making the situation even worse.
Zoidberg summed it up nicely there - who will pay the prices MS demand for XBox originals when they can buy it for £2 at the local shop?
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Indeed I've spoken to couple of my local retailers who rely more on 2nd hand lately and things are starting to look at bit worrying. More people are going for the download cheap games and retail is being left a bit. NOw with MS doing older games cheaper over the net a couple are a little worried.
As for gamers I wouldn't worry. IF the price is right trading in would not matter, the 2nd industry is so big no because people cannot afford their prices. With no 2nd hand less new stock shifting means they would HAVE to sell it cheaper. Mind you I've just swapped to rental (that swapgame over on the right), if you like it you can keep it for extra. I'm gonna try that for a while. DD 2nd hand or retail, whatever happens, I'm done with 40-30 quid for EVERY game I want.
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For consoles PSN and XBLA have virtual monopolies on the distribution of exclusive content and scarcity value will always command a premium. I am surprised the EU haven't looked into it yet. It would be interesting if services like Steam could sell 3rd party DLC on consoles and see what impact that would have on prices.
As for the second hand issue wouldn't it be interesting if we could auction our licenses, the developer and distributor can take a percentage of the transaction and the supply of second hand licenses would be proportional to the sale of the game in the first place.
Personally I am sick of the clutter that boxes have, and the constant reminder of the waste of money some impulse purchases were! Although I am concerned that one day the servers will go down, honestly how often do we really play games we bought years and years ago?
edit:spelling
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And what twinbee said also applies to me (note-to-self: you have to do that database thing for the videogame collection)
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I always buy DVD's though, I prefer to be able to just look at my 100+ collection and choose, rather than wait for something to buffer or whatever
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That's hardly the point, is it? I mean, how often to you look at pictures you took years and years ago. It's all about memorabilia, it's ones life after all.
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/Points towards games collection in his profile
There's just something very, very satisfying about having the physical box, manual (not that I ever read them) and disk.
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Attempting to work with Steam has been, in my experience, more akin to the first page of the article, corporations just wanting to screw you over. I love how when you buy a game on Steam that's it, it's over, you're screwed. If you buy a game from a box you have the physical game. You can return it to the store if it's broken, you can sell it to someone else, you can loan it to a friend. I'm a big Steam hater and will never use the system again, that's how horrible my experience was with them.
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o/
But I love the immediacy of digital downloads - when the service and the price is right.
I do tend to forget about games that are on my HDD though, so they do need decent visual interfaces, like coverflow.
I was very disappointed when I realised that I couldn't browse my collection using the excellent new NXE 3D interface on the 360. They should address this, as for browsing, it beats scrolling through a menu unless you already know what you're looking for.
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By and large I still prefer buying physical games, but have been moving toward a more digital solution for some aspects of this. I think XBLA has had a significant effect on this, as for the most part there is no physical option to consider. Perhaps the biggest reason I've taken to it is that I can play my Arcade games on any Xbox with an internet connection, which saves me having to physically carry games about. My PC games collection on Steam has started growing for the same reason too. It also helps that both services often have sales on, which caters for my impulse buying instincts.
The PSPgo will be an interesting one for me. I already have a few PSP games, so am quite keen to see how their service for turning these into digital versions will work. Ideally I'd like to be able to buy a physical game and be able to convert it at my leisure, in much the same way as I operate with CDs. My least favourite idea would be some sort of trade in, but the logistics of that would likely make it more complicated to operate. Either way, I'm quite keen to have the device itself, so will be keeping a close eye on how it transpires.
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Remeber how digital distribution was supposed to lead to lower launch day prices......well that was bullshit wasnt it.
If it benefits them, its screwing you........
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So if you are like me and like to boot up some retro games every once in a while, the only way forward is on a tangible format.
I also don't see why I should pay the same for something digital as for something in a box.
I'm not against DD perce but like fuck that I'm going to pay anything more than 15 euro per pop for something that I can't hold and will become unusable when we move to the next system. When I pay for something like this, I want to own it and be able to sell it on, etc. I see no reason why i should pay so much money and still not actually own the product. It's utter bs.
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"In some cases, whole industries are effectively dragged kicking and screaming into this reality - witness Apple's relentless bullying of music companies into accepting high-quality, DRM-free distribution on the iTunes Music Store, when the music firms themselves far prefer music services with restrictive DRM and monthly subscription fees."
Right give Apple wrongfully credit..... fast rewind to 2007 http://ww w.theregister.co.uk/2007/01/24/...
"Apple's digital rights management lock on its iPod device and iTunes software is illegal, the Consumer Ombudsman in Norway has ruled."
They had two options was A) close down iTunes for norwegian customers or B) remove DRM.
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I've nothing against downloaded games or monthly subscriptions, but it has to work out as cheap as buying boxed versions are today, accounting for the fact I resell them once finished. Considering I buy maybe three or four games a year at most, and sell them on, these other services have to match or better the cost of gaming for me. If it sounds like I'm not into games, this isn't true. I'm certainly hardcore in the amount of hours I play each week, with currently, barely a day going by where I don't spend hours playing. I would probably play more games if they were available incredibly cheaply or free, for example, although to date I've never bothered to rent a game. I buy what really interests me, and ignore anything that won't keep me entertained for months on end.
In short I possibly spend £10-£15 a month equivalent on games (including XB Live). Given the choice of buying boxed copies and being able to sell them on, or a subscription based service... I'd still stick with the current way. I'm no fan of monthly payments and don't like feeling tied down. I already have this in life with a mortgage, tax and bills. I don't want the cost of gaming to feel like a bill or a tax!
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But, the problem is; not many seem to share that idea, and if you do want a digital copy; you still pay for everything that happens for the physical medium. It makes no sense, but maybe.. just maybe... it'll change in the upcoming years.
A system like Steam where you can browse/buy/download is the most convenient way to purchase a game.
There's no trouble with shipping costs, the added price of a 3rd party for distribution and their profit margin, no physic media/disc/boxes nor booklets.
Games could be much cheaper than they are, without affecting the quality at all.
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What happens in a few years?? or in the 'next gen' will this content that I've purchased still be available for me to download on my new console free? or even stored on the servers at all? it's that unknown and feeling of being at the mercy of large corporations.
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I might sound like i'm backing DD but it has done wonders for indie games. I also loved using rental services as it allowed me to get the most out of the few wii games worth playing.
On a side note its quiet interesting that DD services like GoG and the VC are pretty much the only way of maintaining old classics legitimately.
It seems for the majority of people the real issue is price and that publishers are unwilling to experiment with price discovery.
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Besides,when the wife is clothes shopping i bugger off and browse the games in the stores.What the fuck am i going to do if
you downloaders have your way.
Think of all the miserable married men before you start down this road,PLEASE I BEG YOU!!!
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I also don't like not being able to bring the games round to a friend's. For example if a group of my friends want to play Pro-Evo but I don't own the game, how would they be able to bring it round to my house to play (assuming I have a bigger house that's better for social gatherings) - we'd have to go to the place of the game owner instead, or for him to carry his full console round.
The thing that has got me the angriest, though, is the DRM on physical discs. Because of work, I often need to upgrade and replace my PC a lot. I always need to keep ahead of the technology so I hate the idea that if I replace my PC 5 times, my games will no longer work for it. It seems like 5 times is a lot and will be a long time before the game is unusable, but I like to own the game for as long as want to play it, which could be a long, long time.
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You have a point there!
I completely forgot that game shops act as substitute crèches whilst mommy's gone to Iceland!
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I downloaded a video a few years ago to test the service for a couple of quid and I don't have access to it anymore, so it's not the same as Steam really?
Also - having to have an internet connection (in a country like the UK, where speeds and general service is still dire) to play offline games is another big sticking point for me.
I prefer the box please.
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Having 1700 albums, 600 dvd's and 100 bku rays I would say I will never convert to the download brigade, not matter how much they push it. I like to see where my money has gone, not just when I am playing it.
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Secondly, and probably more importantly, what will happen if the Xbox 3 comes out or the PS4? What will happen in 15 years with the WiiWare, PSN, XBLA games I bought and downloaded when MS or Sony or Nintendo decides to stop 'the service' because their next console is coming? What happens if Steam goes broke? What happens if I die? Will my kids get the downloadable games I bought on a different name? Legislation around all of that is way too vague for me.
And i just love boxes
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Digital distribution is nice but all the DRM fiascos have made me very sceptical. Also you won't get "reselling / used" with digital distribution... also a big disadvantage for us customers.
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What happens in a few years?? or in the 'next gen' will this content that I've purchased still be available for me to download on my new console free? or even stored on the servers at all? it's that unknown and feeling of being at the mercy of large corporations."
Lavalant is spot on, what happens when these consoles are no longer supported. 360s are not the most reliable console ever made, I am happy to buy physical media.
I never owned an original xbox so have been buying discs I did not download any of the originals because of the cost it is cheaper to buy the original discs. another related point for the 360 anyway is HDD space, who could download and store all the content they purchase now? Certainly not an option on a genuine MS HDD.
If everything moves to download only there will be no nostalgia / retro purchases, you may even see people selling consoles full of DLC with the attached user name so it all works. Empty the friends list, advertise with "X" amount of content and gamerscore.
The publishers are certainly driving this as they want a cut of every sale or resale and consider the purchasers of second hand games to be thieves. I think a middle ground is more appropriate. Buy the games on discs and download additional content, that way they make money on every resale, if the content is good enough. If you buy a new game and dislike it you can return it to EB Games in seven days and swap it for something else with downloading you are stuck with it. The Magic the Gathering game being a good example. I would gladly delete it and get my points back, what a piece of shit it is.
I buy a lot of games at RRP and also many as second hand. I would certainly buy a lot less if everything was download only.
And to the point of the article
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With digital distrubution, though, its value will freeze at whatever the hell the distributer wants to charge. In some cases, for example, indie games like Plants vs Zombies or old rarities on VC, where a physical method of distribution wouldn't be practical of cost-effective, it's perfectly reasonable and is perhaps a better model. But for the latest and greatest releases from the big publishers, you'll be paying a premium because they have the clout to make it the only legal option. A £30-40 title will continue to cost that much until the centralised publisher decides to offer a discount - not because of competition or the consumer-side value of the game, but because of marketing.
As for the prices of digital media being lower than a physical product, I see no reason why it'd ever be the case. If DD isn't providing a world of bargains in its fledgling years while it still has to compete with the physical media market, it's not going to start when it becomes the industry standard.
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And what about Christmas presents? I'm someone who receives games, CDs, DVDs and BDs as gifts from others because I like them as well as sending them to others. Sending or receiving a slip of paper that entitles you to download the product of your choice just isn't the same but I guess, at worst, it can be compared with gift vouchers. Receiving gift vouchers is nice, sure, but not from everyone!!!
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That's only on the PC though, console games will be playable for as long as the hardware continues working (or not in the Xbox 360's case!!!). However, there are means of getting round the problem on the PC with NoDVD hacks.
While pirates certainly use them illegally to play the downloaded versions, I also use them with my legally bought copies to avoid having to put the DVD in the disc drive. It's just more convenient and avoids wear and tear on my precious discs. Similarly I buy CDs for all my music but I rip them to my PC for convenience and keep the original as a backup.
Speaking of backups... if we're going to be downloading huge amounts of content digitally then we're going to have to consider backups, as any sensible person should, unless they like redownloading GBs of stuff when you lose everything because of a duff hard drive. I'm sure their ISPs are going to love them for that!
Currently the Xbox 360 for example has no means of backing up its content as its all DRMed and for me that's a big no-no. I can backup all my PC and PS3 stuff to external HDDs (and I do regularly). If Microsoft want digital distribution to succeed then they're going to have to reconsider their approach to DRM and allow the DLC, etc., to be backed up to external media and hard drives.
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Personally, I'm hoping that Microsoft allow the future Xbox to have Windows Home Server integration. Use it for running backups, gamertag storage, hell, even install games onto it and 'stream' the content via ethernet.
I definitely want to have an easy way of moving my gamertag (with Live account) from one 360 to another in my house - have a main setup in the living room, but then sometimes I want to play upstairs. WITHOUT having to unbundle all the cables, etc. Even swapping over the HDDs is a bit of a pain, plus it also increases the risk of damage.
And as people have said, if all your gaming content exists on one HDD, with your only option for 'backing up' betting on the fact that Microsoft will somehow keep terabytes of obsolete data clogging up servers, I can bet there are going to be quite a few consumer and governmental compaints.
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However, if it's like the Wii and locked to the (in my case faulty) hardware instead.... no sale. I find it unbelievable that there's no way to move my DRM rights to another Wii. >
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That's what I do (with DVDs anyways - rip 'em and tream 'em), but that's kinda the point: with physical media, you have the choice to do that and unless that physical object gets destroyed - by fire, say - you'll always have it to go back to. Purely digital media has so many issues right now, not least as shown by Microsoft's music service, that you can actually still have the content on your PC, which you've paid for, but if they turn off the verification servers, you're screwed.
I guess the best thing would be for MS et al to allow digital downloads at a reduced price, with the option of buying the disc as well for an extra premium. The platform owner stocks the 'download-only' model and the traditional retailers get the boxed product - that way, the hoarders and those who want backups are happy, as are the 'everything digital' crowd.
The retailers could get hissy about the predicted loss of sales and refuse to carry games for whatever system implemented it, but, at least initially, the market segment for downloadble games will be so small that not carrying games for an entire platform would actually be detrimental to their sales. And if the publishers responded in kind by refusing to supply any games to retailers, they'd die off pretty quick.
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However, if it's like the Wii and locked to the (in my case faulty) hardware instead.... no sale. I find it unbelievable that there's no way to move my DRM rights to another Wii. >
The 360 binds it to both the machine and the profile.
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Seems an odd comment to make. I am well over 30 and the demand for space in our household is extememly high. I am long past the phase of hoarding and downloading games is an important factor in my war against clutter.As I have got older I have gone to great lengths to eliminate stuff I don't need. Your comment is strange IMO. Most of my firends are in the same boat as me.
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I was a collector when I lived at home with my folks, hundreds of Laserdiscs, DVDs, games etc. Owning the physical item was as important as actually watching/playing, I had DVDs I probably never watched.
Now I own my own house, it's simply a case of the less clutter the better. DVD purchases have been replaced by Lovefilm (the irony being, I actually watch a lot of films now) and games get sold on or traded in as soon as I've finished them.
The convenience and impulse purchase factor shouldn't be overlooked. Bored on a Thursday evening? Log on to Steam and download a game, maybe even one you would never consider buying in a shop or waiting for an online purchase to arrive.
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i can see my shelves of games, but everyone else can see my list of games... i own almost as many PSN games as i do boxed titles (though i do actually own boxed versions of GT5P and warhawk), and seeing my list is kind of the same feeling. incidentally all the bought PSN games go in a separate folder to demos, which makes them feel more.... real.
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