Posted on August 15, 2012, Ross Lincoln Video Game Streaming: Bridge To The Future, Or One Too Far?
UPDATE 08/17/12: Illustrating the difficulties facing gaming as a service and streaming games in general, it has been confirmed that OnLive has laid off its entire staff. No word on whether the company will remain in business, or in what form it would do so. Our developing coverage of the situation can be found here.
Piracy, we will admit, poses an enormous dilemma for the gaming industry. Depending on who you talk to, potentially millions of dollars are lost each year to people who steal and then illegally distribute IP. Clearly, the industry needs to present a serious, unified response if it expects to get the matter under control. Of course, getting the problem under control poses its own set of unique problems, perhaps the most important being the need to balance protecting intellectual property against the needs of the consumers you want purchasing said property.
While some companies, notably CD Projekt Red, have rejected the premise outright, the majority of major developers have all began to implement anti-piracy measures centered largely around convoluted digital rights management schemes, such as Blizzard’s persistent Internet requirement for Diablo 3, and services like Origin. However, the growing consensus among the big names is the idea that very soon, perhaps even before the next generation of consoles gets underway, there is going to be a tremendous shift to a fully digital marketplace for games. The most commonly bandied around phrase is ‘gaming as a service’, essentially the idea that netflix is the model the video gaming industry should emulate.
With gaming as a service, players would no longer purchase a physical or digital copy of a game outright. Instead, so proponents believe, the customer will buy access; either to a single game, or to several, and stream them via the Internet. During an interview at QuakeCon 2012, id Software’s Tim Willits even proclaimed this to be the future of the industry, insisted upon its inevitability, and confidently assumed the customer will more or less happily adopt the model. Is this an accurate reading of the gamer community? To find out, we’ve taken a look at the facts on the ground for the average consumer, and the evidence suggests otherwise. While streaming will become a major component of the industry, given financial and technical realities, the outright ownership of individual copies of a game will remain the norm for the foreseeable future.
One first must consider the financial reality. Whenever the discussion of streaming gaming comes up, those advocating most strongly for it tend to assume that Internet access is a given. But is it? Before answering that question, we ought to consider other costs the consumer accumulates as a result of simply living in our society. The Bureau of Labor Statistics puts average yearly expenses of just being an American at around 25K. A breakdown of some of these expenses demonstrates why:
* Water, power, gas. Depending on where you live, you might end up paying between 100 and 300 dollars every other month just to ensure access to these necessities.
* Rent. This varies wildly. The average rent in Los Angeles is $1628. The average in Tulsa, meanwhile, is $515. But take into account the variance in income by region. In LA, median income is around $55,476; in Tulsa, it’s $29,000. At least 50% of both populations make less of course, making rent a dicier prospect than it would seem from a surface glance.
* Insurance. If you drive – and most Americans do – then you almost certainly have auto insurance. As with rents, insurance prices vary widely, based on location, driver history and even credit (which, by the way, is an awful thing to do to people.) But chances are, even with liability, you’re going to be kicking in somewhere between $40 and $100 per month just to keep your car legal.
* Phone. Research from 2011 suggests the average American is forking over $47 per month for their cell phones. And unlike power, insurance, and rental costs, cell phone rates tend to be consistent nationwide. Whatever your paying for your cell phone service in New York, you’re likely to pay the same rate in De Moines.
These are the costs consumers are almost certainly taking care of before they can consider getting the cable and Internet needed to stream games. Of course, at first glance it doesn’t seem like much to shell out. AT&T standard DSL can cost as little as 20 bucks a month. Uverse is pricier at $59.95 a month, but still reasonable (assuming you live where service is available). Time Warner’s standard package is $29.95 per month, while Cox bundles Internet with cable service at around $40 bucks a month depending on the offer you purchase. All quite reasonable, and the data certainly confirms that most Americans have some kind of access to the Internet. But after shelling out so much for everything else, it’s no wonder so many Americans still get their Internet via work or school. (We’ll talk about those numbers in greater detail shortly).
But, OK, let’s assume the customer’s ability or willingness to shell out money for an Internet connection is secure. There’s an additional problem, namely a litany of additional costs, both up front and ongoing, required of people who want to play video games at home.