Note from the author: This essay was written in June 2011, considering the current state of transition the industry is in, this could mean that certain parts of this essay are out of date. 

At this time, the gaming industry is in a state of transition. On one end, the console game industry is still making big money with the production of AAA titles. On the other end, you have the PC platform, which has a dwindling AAA industry, but which is the forerunner in a new way of games distribution. Many developers have made the switch from PC to console production under pressure from publishers because of claims of there being less piracy in the console industry. Meanwhile small companies and independent developers –indies- are finding the new distribution methods to be quite profitable.

This essay is about the transition in game distribution and what it means for the game industry.

Current distribution

To gain some insight into the future of games distribution, we first need to paint a clear picture of current games distribution.

Physical distribution

Currently, the most common form of distribution is to copy all game data on a physical carrier like a DVD-rom. Subsequently this DVD-ROM will go through a long distribution chain, until it finally lands in a game store, where the consumer will have to purchase it.

One of the advantages of physical distribution is that consumers like physical stuff. It is extremely difficult to find hard numbers on this, but a short look around on various online communities and news reports on the recent PSN hack clearly shows that consumer trust in digital distribution is down (Digitaldebaser, 2011). It also plays in on an emotional level, a lot of people ‘like having something physical on the shelf’. The last advantage is that it stimulates impulse purchases. Consumers can be tempted to make a purchase because they see a game lying somewhere, even if they were not planning to make a purchase before.

There are also numerous disadvantages to physical distribution. First and foremost there is production cost. It takes a lot of money to produce the physical carrier and its accompanying case and booklet and then ship it internationally. Another disadvantage is that if there is a problem in the game at the time of shipping, it cannot be corrected before it reaches the consumer. A clear example of this is the problems during the Modern Warfare II roll out. The disadvantages for consumers are also clear; first and foremost, it is not very convenient to have to go to a store, hopefully find the game in stock there, take the game home and install it. Secondly, physical carriers are pretty fragile. If you damage the disk, the game will become unplayable. There are services which repair your disks at cost, but most people will consider the game lost and discard it.

Download distribution

One of the fastest growing methods of distribution in the game industry right now is digital distribution through downloads. We speak of download distribution when a consumer copies the game-data from a web server to his own device and runs the game from there. For the sake of this article we will focus on legal download distribution.

Download distribution brings many advantages. Opposite from physical distribution, there are no added production costs. The only distribution cost is the cost for the publisher when he purchases a license to distribute his game through a certain platform. This is why a few large publishers have launched their own digital distribution platforms, such as EA’s Origin (Origin, 2011) or Blizzards (, 2011). Other online platforms distribute in-house games as well as games by other publishers, such as Steam (Steam, 2011), while even others only cater games from other publishers, like (goodoldgames, 2011) does. For consumers, a clear advantage is the constant availability of games, even during holidays and even at night. There is also that games are never out of stock, and always up to date. As a consumer, you don’t even have to leave the house, and you can have any game you want on your pc within a matter of moments. The last advantage for consumers is that all your games are available where-ever you are, you can download your game where-ever you are. For publishers, an added advantage is that services like these usually include relatively robust anti-cheating and anti-piracy measures.

Off course download distribution has its down sides as well. The first of which is the sensitive nature of user account data. Hackers can penetrate the servers containing the data and steal usernames, passwords and in some cases even credit card data. Yet again we are reminded of the PSN debacle mentioned earlier. Another disadvantage is that if a user forgets his username and password, or if his account details are stolen, the user will lose his entire game library. Consumers with a low bandwidth internet connection are also at a disadvantage because it will take very long for them to download the game.


A new method of games distribution currently in development is streaming. Streaming occurs when the game logic is run server-side, but the games’ graphics are run client-side. This allows weaker devices to run graphically advanced games. There are already several services providing streaming for games, such as Gaikai (Gaikai, 2011), OnLive (OnLive, 2011) and QuakeLive (QuakeLive, 2011)

A clear advantage of streaming games is that the device on the client side no longer has to be very powerful; it merely needs a GPU to draw the game onto a screen. Another advantage is that there is no wait, you don’t need to download or install the game, you log in, and you can start playing. Another advantage is that it is even more friendly for gamers on the move than downloading games, as you don’t even have to wait to play.

The first disadvantage of streaming is that the player needs a very fast and stable internet connection to be able to play. Another is that you will never be able to play a game you have purchased without an internet connection, or that if the servers are down, so is your game.


Browser-based gaming is when a game is ran within a web browser through a plug-in such as flash or java. The main difference between streaming and browser-based is that in a browser-based game, the game logic is still ran client-side, while the game-data is mainly stored server-side. Examples of browser-based games are the games on, or facebook games such as FarmVille or City of Wonders. But Minecraft also has a web-version.

Obviously it’s pretty cool to have a game running in your browser; you hardly lose any face booking or twittering time to playing a game. Integration with aforementioned social networking sites is also an advantage, as it allows for many social game aspects to enrich your experience (Psychology and games, 2011). Like with streaming, the game doesn’t have to be installed, and is available for play right away.

The disadvantage of running a game in your browser is that you’ll still have to install a plug-in, be it flash, java or unity web player, all three of these players are known to slow down your browser, be virus sensitive and require constant updates. Also, even though the capabilities are constantly being expanded, browser based games are never as powerful as installed or streamed games. Browser based games are also often plagued by syncing issues, when there is latency on the connection and the game data in the browser is out of sync with the game data on the server, forcing the player to refresh the page.


The next segment will describe where I predict the game industry to go in the coming years. It is pretty difficult to give an accurate estimate here. For reference sake, 5 years ago, the iphone didn’t even exist yet. (Wikipedia, 2011)

Physical distribution

I do not believe that there is room for physical distribution in the future. Even though digital distribution is not progressing as fast as some would have it , it is still obvious that the market is realizing the advantages of digital distribution for a medium such as games.

Physical distribution will disappear because producing and transporting physical carriers will simply become too expensive. Environmental laws are already placing a burden on production and transport (Taxation trends in the European union, 2010). Furthermore physical games will lose the competition from more convenient digital distribution services such as streaming or download. Especially when the generation which sees more value in physical products gets replaced as an target audience by kids who grew up with digital content not coming on a physical carrier.

Download distribution

Download distribution will probably continue to exist for the coming time. It is simply the most convenient way of delivering large scale games. Internationally the bandwidth simply is not enough to support everyone streaming all of their games. Maybe even more so, the user base of the type of internet connection needed for streaming games might not even have spread far enough. I know that in the US it certainly will not have (How to turn a world leader into a fourth-rate broadband economy, 2011).

Download distribution will probably move away from having people download the entire 3-5 Gigabytes of information in one go, and will probably start being more episodic in content, delivering a few hours of gameplay per episode. Systems such as in World of Warcraft where you can play the game during install, and the game installs relevant game files first will become more widespread, to lower delay for players before being able to play the game.

Maybe games will be more segmented in nature, with players being able to purchase the parts they like, and not pay for content they will not be using. For instance, someone who does like shooters, but doesn’t like multiplayer mode, would just be able to buy the single player campaign of his desired shooter.


I predict streaming to be the next big development in the games industry. Not only is the service a very convenient method of delivering games to consumers with a high internet connection for pc, it mainly also caters to users of mobile devices such as smart phones or tablets. Currently the big bottleneck is purely bandwidth. Fortunately, a lot of countries are already updating their outdated ADSL networks with the faster fiber glass networks, and are working on increasing speed and coverage of their mobile networks as well.

As soon as the bandwidth has caught up with developments, there really is no reason for streaming to not become the new standard. The problem is just how fast the network will advance in speed.


Whether if internet browsers are still around in the same form as they are now, or if they’ve been replaced with an OS integrated with your internet experience (chrome book, 2011) or maybe something entirely different , browser-based games will always be around. There will always be an incentive to play a short game while you’re on the internet. The only question is, which plug-in will be used? There are many (mainly mac fanboys) who claim that flash is on its way out, and that html5 will replace it. But meanwhile flash is still developing technologies. It is hard to say where browser games will go. If you consider that currently their main selling point is that they are always available, mostly free to play and that they’ll run on pretty much any machine, it isn’t a far stretch to imagine that in time they will be replaced by streaming games.


Concluding, we can say that there are great things afoot. But there are way too many factors to give a good definitive prediction of the future. As I’ve stated before , 5 years ago the iPhone wasn’t even released yet, and no-one apart from maybe Steve Jobs himself could have guessed the influence it would have on the mobile device market. The same goes for the way games are making money now. The process used to be pretty straightforward: design, develop, manufacture, ship, sell, money. Now there are subscription models, Downloadable content, micro transactions and who knows how many more schemes to get users to pay for content. The generation of content is simultaneously undergoing a huge transformation as well. In the old days of AAA glory, making games was hard and purely reserved for professionals or really dedicated attic-dwelling nerds. Right now, with nearly every game or engine releasing a free Development Kit or mapping tool and services like Unity, Game maker and such becoming more advanced and easier to use with each generation, who knows where the bulk of content will come from in the coming years?

Notwithstanding, I think we will see a short period of time where-in AAA titles are still the predominant money makers, available through download. But I predict that companies will soon after switch to providing content in bite-size chunks. A map here, some new features there. Probably delivered through streaming so that people can play it on their portable devices. Payment for these chunks will more than likely be handled through a subscription model, instead of having to pay for each small chunk.

The future is bright. Except if you are a DVD-rom manufacturer.


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Games and Psychology, 2011 (third year paper USAT) [online] Hilversum. Available at [accessed June 30, 2011]

Taxation trends in the European Union, 2010 (report) [online] Eurostat, European Commission. Available at [accessed June 30, 2011]

How to turn a World leader into a fourth-rate broadband economy, Faultline, 2009 (article) [online] Available at [Accessed 30 June 2011]

Chrome book, 2011, (site) [online] Google inc. Available at [accessed June 30, 2011]

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