Gabe Newell and the Advantages of Buying Digital

August 28, 2007

You have to have a lot of respect for Valve -- for its debut game the company unleashed Half-Life, a title continually referenced in the history of computer games. How do you follow that? Valve stepped up and wrote a top-tier game engine from scratch (Source) and built a digital commerce system aiming to change the way games are bought and sold (Steam).

In this Game Informer interview, Valve founder Gabe Newell talks about the advantages of doing business digitally. Here at GameSpy/IGN, of course, we've got our own digital solution at Direct2Drive, where you can buy full retail games and download them to play immediately. Have you bought any games for direct download yet? Here's why going direct is a good deal for gamers and for game makers alike:

1. The Long Tail: The reality of videogame retail is that there isn't a lot of shelf space. A Barnes & Noble bookstore might be as large as four stories, but your typical game retailer is jammed into a space smaller than a studio apartment. As a result, games that don't move fast have to be bumped off of the shelves to make room. That hurts the whole industry -- it forces a "hit game" culture where something has to either be a big-budget blockbuster or it's pulled from the shelf a week later. That ain't right. What about niche games, indie games, or experimental titles? When you shop online, there's no restrictions -- small, old, or niche games all have their place. As soon as publishers realize this and discover how much money they're leaving on the table, you're going to see a huge rush to make back-catalog games online (you're already seeing this with classic games coming back as downloadables on the next-gen consoles). It's going to be a beautiful thing. If you're a serious gamer, get used to buying online! As Newell says, "There are no shelf space issues on Steam."


2. Buy Only What You Want: This October, The Orange Box will be available at retail. This package contains Half-Life 2 Episode 2, Portal, and TeamFortress 2. But what if you only want TeamFortress 2? You're out of luck if you want to buy from the stores -- "[There was] resistance from the retailers. They didn't want more than one SKU," Newell explained to GameInformer. Again, it's a shelf-space issue. There are no such problems with Steam, where Newell promises "a bunch of different offerings. All the multiplayer products, all the single player products ... we'll just try to figure out the most popular ways that people will want to buy it." Buying direct gives you the ability to buy content in smaller chunks. You can buy individual expansions or even levels if you want, instead of big bundles. Episodic games like Sam & Max (download the demo!) are possible online, but tough to do in physical stores. It's like a whole new world is opening up.

3. Free Trials and Other Experiments: There's a third advantage to digital sales, and while it's mostly a benefit for publishers and developers, it also has some perks for us gamers. With digital sales, products can be unlocked for 'free trials,' as Valve does with multiplayer Day of Defeat on occasion. Companies can look at buying behavior. Who downloads it? Who plays it? Do they go on to buy the full version? (The answer is: a lot of gamers do.) Game developers can use this information to target products, find an audience, and release new stuff. As for gamers, we'll have the option of trying lots of new things and buying only what we want -- all from the comfort of our easy chair.

So for a lot of reasons, digital sales are it. Most of you reading this are already taking advantage, either through Xbox Live Arcade, the Wii virtual console, Steam or Direct2Drive. If you haven't bought any games this way, maybe you should start poking around. You might find something you like, and along the way you'll support the development of games that'll pull the industry out of the hit-driven rut it's created for itself.

      -Fargo

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