Gabe Newell agrees
It’s always nice when you bag a CEO one day and the next day another industry leader comes out and agrees with you. Well, kind of. Gabe Newell, founder of Valve (the makers of Half-Life and the digital distribution platform Steam) was at the DICE summit in Las Vegas talking about the growing importance of digital distribution in the games industry [Game|Life]. Okay, probably not so surprising that one of the key digital distributors is talking up digital distribution, but Newell’s predicting that the next generation of consoles, the role of digital distribution will be incisive.
Newell’s argument is that Valve’s experience with Steam has shown that the value in digital distribution is in the information it provides about sales and user activity. So, a console that collects this information and uses it to connect publishers with consumers is going to fare well. But what happens when the console or digital distributor is also the publisher? Microsoft and Apple take on this role with XBLA Community Games and App Store respectively.
I can’t see a publisher like Activision or EA going anywhere in a hurry, but the ground is starting to move (again) and companies that are not flexible enough to ride the shift are going to crumble. Short to medium term, then, we might see publishers going into contracts with digital distributors to get their games out and provide metrics in return. The big publishers are still the only entities with enough cash to fund AAA game development. Longer term, if a digital distributor is big enough, if digital distribution becomes a primary way to purchase games, and if digital distributors have enough relationships with developers, then for all intents and purposes, they become publishers.
