Since the launch of Atari forty-three years ago, video games have been limited to the capacity of the delivery media and the distribution of that media to the gamer. With the increase of larger hard drives and faster internet speeds those limitations have been removed. Just like the trend that changed both the music and television industries, physical sales of video games will decline in favor of digital downloads and streaming.
I’m not saying that physical discs will disappear tomorrow, but it can be projected that video games will shift to a more digital focus than its physical counterpart. Just as there was a jump in what was easily downloadable, from the size of a song (4MB) to the size of a TV episode (4GB), there will also be a jump to easily downloading video games (40GB). Ten years ago it was laughable to think that we could stream or download a 4GB episode of a TV show as a main form of entertainment, but now with the influx of internet speeds and the content available through Netflix, Hulu, Amazon, and iTunes, that joke is a reality.
Digital gaming is a proven concept in today’s society as there are already two different companies that offer video game streaming to gamers. Gamefly has a streaming service called Gamefly Streaming and Sony has a streaming service in its Playstation Now program. As internet speeds get faster, so will the ability to access content. Even the old Head of Xbox Robbie Bach, who oversaw the launch of both the original Xbox and Xbox 360, said that the next generation of consoles probably wouldn’t have physical media in them.
Internet speeds are only part of the equation and the big change will happen when the other half, console hard drives, expand to the point where gamers don’t have to delete games to free up space for new ones. With the average digital game taking up roughly 40GB of space, and a 500GB PS4 hard drive only offering 407GB of usable space, that only affords around ten titles to be stored on a standard hard drive. By those metrics, a 1TB console could save roughly twenty games, a 2TB console could offer forty, a 4TB console eighty, and so on. At that point, I don’t think any gamer would need to delete old games for space.
With a shift in video games moving to digital, how do bigger corporations stay relevant and entice gamers to purchase physical copies of games from them? The value proposition. For years companies just put the product on the shelf and sold it at the retail price knowing that customers would walk through the door and pick up the latest game. Then companies started fighting over the segment of gamers that were guaranteed to purchase games on the first day of release by offering retail specific Day-One exclusives.
Amazon took it a step further by offering discounts to people who pre-ordered the game through their Amazon Prime program. What better way to enjoy your new video game on Day-One than to save $10 and only pay $50? Best Buy has also recently changed their Gamers Club Unlocked program and dropped the initial membership fee to $30 for two years which will give 20% off any new game. So a $60 game would come out to $48, $40 game $32, etc. Best Buy also offers %10 off used games and a %10 bonus on trade-ins.
Granted there are proponents on the side of physical video games. For collectors who want to have a massive library of titles that they could pick off the shelf, pop in the system, and play immediately, there’s something to owning a physical, tangible item. Companies like Gamestop, that have made a brand off of buying and reselling used games, would slowly go obsolete with the absence of physical media. To fight that trend, Gamestop recently said that they would stop including digital games for new console purchases and include a physical copy of the game instead. But what’s stopping retail portals like the Playstation and Xbox storefronts from offering players the ability to trade in their digital copies of games for credit towards other purchases? Green Man Gaming already offers that service to PC gamers.
Digital gaming is still viable for today’s consoles and is showcased on PC gaming with Steam. Most PC games are sold digitally and, for gamers like myself who have a smaller hard drive (256GB) in an ultrabook computer, it becomes more economical to have a couple of the most played games saved onto the computer with more linked to the account that I could download at any time. If I wanted to play a game like Team Fortress 2, I could just download it in the background while I’m finishing another task.
So just like there are still CD, DVD, and Blu-Ray sections in Best Buy and Wal-Mart, there will always be a place for physical video games in retailers. But just as the footprint of those media departments have shrunk dramatically, so will the retail space for video games. As hard drives get cheaper and internet speeds get faster, expect to see the sales of digital video games eclipse the sales of physical video games in the future.