How the video game industry can improve digital distribution platforms

By design, digital distribution platforms are monetizing uploaded content via multiple transaction fees, but most participants see it as unjust and highlight their exploitative nature, together with the lack of agreements related to proof-of-ownership and more transparent royalty payment procedures. Online distribution has irrevocably changed the whole structure of the video game industry. Since the 2000s, it has stimulated the creation of independent game titles and made them widely available at affordable cost. It has enabled ‘remote’ multiplayer at scale, and introduced various DRM solutions, together with automatic updates, cloud features, gameplay streams, microtransactions and more. [caption id=“attachment_4272201” align=“alignleft” width=“380”] File photo of Konstantin Boyko-Romanovsky, founder of Destiny.Games[/caption] In fact, digital distribution turned out to be greener than physical and removed the need for printing, packaging and shipping. It allowed major video game publishers to beef up their margins and create new business models around this delivery method. Over the decade, digital distribution has become widely adopted by millions of active gamers and turned into a multi-billion market. As a matter of fact, game companies have utilized it as a disintermediation tool and cut publishers out of the equation. The success of privately owned digital distribution platforms allowed these companies to become publishers themselves, develop proprietary hardware and operating systems, eventually monopolizing the video game distribution market and defining the future of the whole industry. However, these platforms have been criticized for the lack of transparency and ideal community management features. Their centralized nature has raised concerns about their opaque policies and abuse of bargaining power. Here, we explore major digital distribution platforms, highlight inefficiencies and explain how blockchain technology can improve the situation. State of the Platform Today, Valve’s Steam is considered as the world’s most powerful video game distribution platform. It dominates the market and has over 150 million users worldwide. So far this year, Steam has reported 33 million daily players and a maximum of 17 million concurrent sessions. As it grows in popularity, new digital distribution platforms are springing up and hope to replicate its success. The most notable ones are Origin, Uplay and GOG.com. These platforms have multi-billion dollar budgets and are run by major game companies, such as Electronic Arts, Ubisoft and CD Projekt. In turn, smaller studios and independent game developers don’t have the resources and capital to build their own digital distribution platforms, so they are now collaborating with dominant ones. Unfortunately, both developers and gamers have to deal with moderation and policy disputes. By betting on Big Data to fix human problems and not reaching out to support platform participants on urgent matters, today’s ‘majors’ are starting to drown in endless community management issues and the flood of low quality games. By design, digital distribution platforms are monetizing uploaded content via multiple transaction fees, but most participants see it as unjust and highlight their exploitative nature, together with the lack of agreements related to proof-of-ownership and more transparent royalty payment procedures. With the volume of digital sales projected to only grow for years to come, gamers and developers will keep gravitating towards major game companies providing the infrastructure. In turn, when not given a fair measure of their influence, appropriate feedback and control over digital assets, industry participants will have to explore other options and expand to less-crowded platforms. Thus, smaller game companies will increase their market share by simply keeping in touch, having a more ‘human’ relationship with their communities and clarifying the criteria for featuring opportunities that indie developers can use to promote their games, and eventually cash out. This scenario will allow for the ‘platform capitalism’ to be diluted with more competitive alternatives, and the game industry to become healthier. Konstantin Boyko-Romanovsky is the founder of Destiny.Games, a video game company, and of The Abyss project_, a new kind of game industry ecosystem where both developers and gamers can earn money. He has more than 17 years of experience in the game industry. Konstantin is a blockchain investor, cryptocurrency expert, and technology entrepreneur._