Just recently I read a great blog post by David Darling, the founder of Codemasters: http://www.develop-online.net/blog/347/Jurassic-consoles-could-become-extinct. In the blog post he talks about how traditional retail games are experiencing a downfall thanks to the increasing popularity of digital distribution.

I personally think of retail games as being relics of the past. It does not really make much sense to still keep distributing boxed games when the same game can be elegantly downloaded and updated over the air through a digital distribution channel.

The world is not all rainbows, however. One big issue with mixing digital distribution with boxed retail games is that resellers will not condone you selling your game for 10€ digitally while their selling the same game for 70€. The only way to get around this issue is to move to full digital distribution. This has the added benefit of minimizing piracy as the game can be tightly bound to the service you downloaded the game from.

Many players are, however, complaining about not being able to play the games offline. Having games tightly bound to the internet is a problem when games are bought from a retailer as we tend to expect that once we have the product we can use it anywhere because we physically own it. The truth is that we don’t actually own the product. Instead, the typical EULA actually states that we only have a license to use the product. We’re not, for instance, allowed to disassemble the product, which the owner is indeed permitted to do.

Digital distribution allows us to provide games as services, instead of selling them as standalone products. This means that for a service to work you have to be connected to the internet but you still have the same rights to use the product. It’s really straightforward; if you downloaded a client from the internet you are expected to have an internet connection so you’re able to connect to the server.

A game distributed digitally that is built using a client-server architecture has the added benefit of allowing you to play anywhere as long as you have the client installed and you are able to log in with your user information. Your save games can be backed up and your game can continue anywhere.

Another development we’re seeing in the gaming industry is the increasing popularity of free-to-play games. These are games that let you play for free but allow you to boost your gaming experience with real world money.

The nature of these games is that players are constantly rewarded with new content and the game can evolve according to their way of playing and their wishes can be incorporated into the product. Free-to-play games can quickly gain a large player basis and monetization is done by providing players valuable things to buy making their gaming experience more fun.

I am personally very excited about free-to-play games as it’s possible to start building the game together with your players and there is no need to work on the game for 5 years from start to finish and only then see if it’s actually something the players like. This is a typical problem with big movie-like retail games and recent news about Radical Entertainment practically closing its doors paints a clear picture of what can happen when the risk does not pay off: http://news.teamxbox.com/xbox/25874/Prototype-Developer-Radical-Entertainment-Closes/.