PS4 and Xbox 720 must embrace digital distribution to survive, says Codemasters co-founder

NewsPublish Date 05/07/2012 - 10:37am GMT+1

Consoles are heading for extinction unless changes to their sales model are made.

Sony and Microsoft must fully embrace digital distribution with the PS4 and Xbox 720 or face extinction, Codemasters co-founder David Darling has claimed.

"Consoles have become like dinosaurs heading for extinction as their natural retail habitat begins to change," Darling told MCV. "These ancient beasts must now adapt to a new environment where platforms like Steam, Facebook and Apple's App Store are pushing innovation."

He added: "The industry is transitioning from boxed to digital games. Physical media like DVD is dying out and gaming is rapidly moving to digital distribution.

"If hardware manufacturers such as Sony and Microsoft do not manage this transition soon, they will be overtaken and left behind by companies who are embracing digital distribution wholly and completely."

Of the next generation of consoles, Darling believes supporting physical media would be a mistake.

"If the next generation consoles have media drives like DVD to keep distributors and retailers happy so they can sell physical product this will make the machines uncompetitive," said Darling. "They will not be able to compete on price. The retailers will say to Sony and Microsoft 'you can't sell game X at retail for $60 and then sell it in your App Store for $2.' However, console-makers will need to sell games for $2 or else they will not be competitive with Apple."

Darling sold his interests in Codemasters in 2007 and is now CEO of digital games outfit Kwalee in Leamington Spa.

VideoGamer.com Analysis

We can't see Sony or Microsoft putting out a digital only console, but the platform holders will surely continue to shift their business towards a digital only future.

Would you buy a digital only console, or do you still want games delivered on physical media?

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User Comments

rbevanx@ Endless

What about if someone on a different account accessed the game on the same console?

As at the moment you can just do that, would that have to change then as well?

Posted 17:31 on 05 July 2012

Endless @ Clockpunk

On networks like Steam or XBLA the codes might not be needed if you are transferring ownership. When it comes down to it in order for my 360 to recognise that I own Bastion (for example) all thats needed is a 1 instead of a zero on my account for that title. If I wanted Clockpunk to have my access to that game, my account gets a zero, his account gets a 1. And the activation code never comes in to it! Same goes for part exchanging within the network.

It's not rocket science, but people like MS and their funky MSP trap that makes you spend more than you need to will want to reap as much revenue from such a system as they can.

Posted 17:28 on 05 July 2012

Clockpunk

It would be good if each digital purchase possessed a unique license code/key, which could be activated/deactivated on a console at will, allowing the content to be exchanged through external means, as I cannot fathom out a means in which an internal trading system could be put into place (which would keep an increasing yield of revenue in the respective digital services). I would love t get rid of some of the dozens upon dozens of Rock band songs I bought back in the day, even if only for a fraction of that which I paid. That would be happily put towards some content for another game.

Either way, someone is going to have a headache figuring it all out! :p

Posted 15:25 on 05 July 2012

Endless

It's only a matter of time.

It only takes one of us, could be me or you or anyone. There's no requirement in the ruling for a distributor to allow it by default, sure. But if a consumer wants to have their activation code for say, a piece of DLC, or an activation code for an MMO or anything similar re-activated for re-sale, the distributor would be legally required to facilitate it.

It'll only take a few court cases, that they will lose, before one of two things happens: systems are altered to allow re-sale; Systems are altered so that digital software is provided via subscription E.g. Pay X amount a month for X number of simultaneously activated software licences.

And personally I think it's a long time coming. I have loads of XBLA games I'm never going to play again, I should be able to transfer the ownership of those licences, the same as any other piece of software, to a 3rd party of my choosing. Even without a sale being involved! if I want to do it for free, thats still my right as a consumer under this recent ruling.

I'm still not sure we're ready for full digital distribution, the worldwide internet infrastructure isn't ready for it. It'll happen eventually, but when it does this is a positive step for consumers imo.

Posted 15:03 on 05 July 2012

Notorious_HIG

Personally I will always prefer to have the physical media whether it is games, films or music.
I just like having the physical thing in hand and enjoy the process of getting hold of the item itself.
Admittedly I have used services like Netflix and Onlive increasingly more over the last 6 months or so (and I've been impressed) but I honestly don’t see a point where I would be satisfied with streaming/downloading alone.
Its just not cricket as they say!
I want a disc, I want box art, I want a manual, hell I even want the silly little pamphlets inside the box!!
I want to be able to play my DVDs and blu ray films I've collected over the years on my console.
Ultimately I don’t think the consumer will have any say in the matter but I do think there needs to be a lot more choice on things like PSN, Netflix and Onlive (I don’t own a 360 so don’t know much about XBL) before they can have digital only devices.

Posted 14:18 on 05 July 2012

Clockpunk @ FantasyMeister

And that REALLY is a 'worst case scenario'...

Posted 14:16 on 05 July 2012

FantasyMeister

Pretty sure that the EU ruling will get challenged, otherwise everyone will only ever have to buy one game again in order to play every other game out there. E.g. I buy a digital version of Skyrim, the resale price is 100% because, well, there's no wear and tear, it's in perfect condition when I resell it.

If the ruling sticks then digital distribution will shift from digital product to streaming digital product (i.e. Cloud gaming) to get around it, worse case scenario being that you no longer play a flat fee to access a game, you pay a rental charge based on how long you play it for.

Posted 13:53 on 05 July 2012

CheekyLee

The ruling isn't going to make anything different. EULAs will have to be reworded, but the document itself shows no requirement for vendors to actually facilitate reselling. They just won't be able to stop you from doing so. I should imagine Steam will just implement a "Trade from library" function, and maybe even some kind of fee-based marketplace system. Whereas Origin will most likely add on some kind of "Premium" service, so you can pay even more to be able to do what you are legally entitled to.

Posted 13:47 on 05 July 2012

Endless@ rbevanx

I must admit when I read the ruling I was like "Oh shi..." because implementing something like that on pre-existing systems is gonna be a nightmare! Then it crossed my mind that in order to comply they might even disable purchasing games until they can!

I dont think the ruling is specific on what the trade in actually is, so maybe they'll get away with only offering MSP/PSN credits for digitally bought games.

Posted 13:38 on 05 July 2012

rbevanx

Quote:

I personally dont give a monkey's how I obtain my games as long as it's convenient and (as per a recent EU ruling)

I really wanna know how this is gonna work.

If I buy so and so game will it give me 20% percent off my next purchase if I trade it in and what if I want real money, will Sony/MS send me a postal order.

Sounds like a bit of a mindfield to me and are our LIVE/PSN+ subs gonna go up to sort this out?

Oh well will have to wait and see.

Posted 11:54 on 05 July 2012

Endless

I personally dont give a monkey's how I obtain my games as long as it's convenient and (as per a recent EU ruling) I am able to re-sell or trade them in against other titles. Though hard drives would need to be colossal to be holdng 50+ games at 25+gb a time and having to download that amount of data on-demand is not feasible with current internet bandwidths.

What they're essentially advocating is that consoles need to become hardware-specific PCs, which I dont have a problem with, but the games-collection whores of us will baulk at that kind of implementation I'm sure.

I've said it before but there's no reason why the next generation of consoles couldn't use mainstream PC components and systems but implement them in a user friendly 'console' manner. I'm about to buy a full system with an ivy bridge core i5 3570K, 1gb Radeon HD 7770, 8gb of 1600mhz ram and a 500gb hard drive for about £450 quid, still a medium spec PC. Which is massively above the spec of the Wii-U and blows the current gen out like a candle if utilized correctly. It's overkill in many ways for a console, but cheaper systems could easily be made if they stopped fannying around with proprietary technologies.

Console makers are still under the impression that they are somehow special, the golden children, whereas in fact they are increasingly becoming the spoiled brat everyone is tired of putting up with.

Posted 11:44 on 05 July 2012