Online video gaming capabilities have completely changed the landscape of the industry during the past few years. Countless independent and second-tier games that otherwise never would have hit the market have been produced, because they could be hosted online or downloaded, avoiding the expense of producing boxes, disks and other physical media. As the video game industry progresses into the next generation and more consumers become comfortable in a world without disks, it is important to consider the extent to which disks really matter in the video game sector.
Steam, Origin, the PlayStation Network Store, Xbox Live, the Nintendo Virtual Console marketplace and even digital download centers from major retailers like GameStop and Amazon.com are fueling an industry that is beginning to value the convenience of digital downloads over the security of owning a physical copy of a game.
More consumers are working to put disks behind them and turn to a digital-only lifestyle. This trend comes at the intersection of mobile device use and the widespread availability of video-streaming services. As these trends continue to grow, you may notice that more consumers are realizing that having their games stored on a third-party server makes more sense than keeping it on a disk that could scratch or break at any time. While business models still need to evolve in this area, we are getting close to a video game industry where content delivery stems from colocation facilities and managed hosting centers instead of boxed copies of games shipped through the mail to various retail locations.
Other than the Wii-U, there is still almost nothing that is certain about the next-generation consoles. There is plenty of speculation and a lot of assumptions being made based on ongoing industry conditions. However, there is one relative certainty — upcoming consoles will be built for greater digital download and game streaming functionality. Rumors that next-gen systems may be digital-only were quickly shot down, but in such a way that the move toward digital video gaming would continue to expand.
This trend makes a lot of sense if you look at the trajectory of the console video game industry. Over the past few generations of systems, it is clear that consoles are becoming more and more like PCs. Then something funny happened this time around — the ability to download software upgrades, patches and system improvements extended the generation beyond the usual five-year life cycle.
The extended life of consoles comes into focus when you consider the interplay between console and PC gaming.
In the past, console gaming and PC gaming were considered widely distinct because PC capabilities change so quickly and are built around different control systems. But motion sensing, touchscreens and the ability to plug console controllers into PCs have broken down the barriers. As a result, the superior performance of PCs and game delivery models are the only gaps between the two sectors.
With the extended console lifecycle about to end, many console makers seem to be getting jealous of PC functionality. Free-to-play massively multiplayer online RPGs are raking in the cash while major releases on the PC perform better than their console counterparts. At the same time, PC content delivery is much more focused on digital distribution and game streaming than the consoles.
These factors have allowed the PC gaming industry to monetize types of video games that the console market cannot match at this point. As next-generation consoles are designed, the move to make them more like PCs could continue. This will likely lead to an industry that is even more strongly built on digital downloads, content streaming and data center hosting taking the place of disks and physical media.
If you want to know more about streaming and content delivery networks, check out our CDN buyer’s guide.
