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How Game Distribution Screwed Us

The following is the opinion of the author and not necessarily a reflection of the views of Antlion Audio or its other staff members.

I am tired of two things specific to PC Gaming: Developers or fanboys hiding behind the phrase “it’s still early access/open beta” to defend bad products, and gamers throwing good money at unfinished crap.

The game industry wasn’t always like this, and I want to be clear, it didn’t become like this because of some Machiavellian scheme. The history I am about to tell is capitalism at its best (or worst, depending on your point of view). Simply put, developers copied what was working to make money. It is our job as consumers to make informed decisions that bring us somewhere better.

In the end, every change to the behavior of the developer revolves around distribution of product, so pay careful attention to how distribution shifts from developers giving us 1/3 of a complete game for free to asking us to pay for games that are 1/3 or less than complete, as we take a walk down memory lane.

Copy that Floppy

For games, shareware starts in the early 90s. The problem / solution was simple and brilliant. With limited access to the internet, the most cost effective way to get your game out there would be to convince people to share it with their friends by physically copying their game from one floppy disk to another.

This is how games were distributed in the early days... you sent them a letter.

The traditionally successful model was about ⅓ of the game was completely free to play, basically a demo of the game and often with complete multiplayer, and the final ⅔ you’d have to pay to unlock.

The key here is that without the free demo part you’d have no incentive to make a copy for your friends. Without the internet getting game reviews was a pain and even with a written review it was often too vague to know if a game was good or not. The shareware demo solved both of these problems at once and was successful enough to give rise to the now major companies 3D Realms (Formerly Apogee Software), Epic Games (Formerly Epic MegaGames), and iD Software (the only one to keep its old name apparently).

Doom, 1993- $40 for 3 episodes... plus shipping & handling.

The advantage to gamers was clear. Free games to play and a chance to try before purchase. The downside was the cost, Most game cost $20-$40 (~$35-$62 today). In the very early days for products that didn’t use a digital keycode, you’d also pay shipping and physically mail a check to some random software company. The dark ages weren't that long ago! Today the average Steam game costs $3 - $6 according to Steam Spy, with "good" games costing $12-$16 (filtering out most of the total garbage) and are a heck of a lot more complex than Commander Keen (which cost $35 + $4 shipping in 1992).

End of Demo

As we move out of the 90s and into the early 2000s I had the interesting job of deciding what games got published by a smaller game publisher. As the internet became a household standard, we no longer had to rely on people copying disks for us. Game distribution was becoming a real industry, with success measured by placement in places like Walmart, Gamestop (yes, they used to sell PC games), and Target. Also, for the first time publishers had websites where you can buy online. This would change radically in 2005 when Steam started to gain popularity and market share, but between about 1999 and 2005 this was the way to make big money.

I had the joy of working with Matrix Games in 2005 when this image was taken via the Wayback Machine. Strongly recommend finding a copy of Crown of Glory and Starships Unlimited!

However, I and many others in my position noticed something weird around the year 2000:

Games with demos sold less than games without demos.

My theory as to why this is true has two parts. First, our imagination of what we hope a game is like rarely lives up to what the actual game is like. Second, we are more likely to take the time to fully evaluate/learn about something we pay for. So you’d buy a game fairly blind (Text based reviews leave a lot to be desired sometimes). While it doesn’t live up to your imagination, since you’ve already spent the money, you’d take the time to try and really understand the product and generally look at it more fondly than you would if it were free.

For demos this was the end. A free demo let users see the warts in your product before purchasing. Worse, for complex games, players simply didn’t take the time to understand the mechanics before moving on. Demos worked better for simple games where this final item wasn’t an issue. This is why demos continue to be commonplace for casual games but are basically extinct for hardcore PC games.

It took till 2013 for someone to finally do a study on this, game demos cut sales in half.

For gamers this was clearly harmful to our experience and gave rise to some companies that produced good marketing and bad games to profit from the blind nature of this purchase cycle.

Rise of Lets Play

The one thing you can say about the game industry is it doesn’t stay the same for long. By the mid-late 2000s Steam had given the world a single unified distribution platform and with the rise of YouTube, content creators began creating lets play videos where they’d test out games - essentially creating a “real” gameplay trailer.

AVGN wasn't first, but starting in 2006 makes him a veteran for sure.

If we ignore the eventual attempts of developers to manipulate/bribe these content creators, we can say that this period of ~2005-2010 was a moment where the doomsday clock moved back a minute. We had greater visibility of the games and what they were and the removal of the middle men and physical production of things like boxes and manuals allowed developers the opportunity to lower prices.

To put the massive difference Steam made into perspective, the cost of distributing a game to retail in 2001 looked something like this: 30%-50% to the retailer + a “marketing fund” (also known as a shelving fee) that ranged widely in price from 10s to 100s of thousands of dollars. Plus box/disk production cost and shipping, which typically ran about $2-$3 depending on volume, product size, etc. Most developers had to use a publisher, who also took 40-50% or more of the net take.

So, let’s say you are a developer, find a third party publisher, and have a $30 retail priced game. The retailer pays you $18. You then split the income with your publisher 50/50, but first you deduct the cost of goods. So we subtract $3 from that income and its now $15. After you split it with the publisher you walk away with $7.50 per game sold… but wait! There’s that darn shelving fee. The publisher paid for that in advance, and it cost $60,000. The first 8,000 units sold you get nothing in order to repay that debt, THEN you get $7.50 per game sold.

In contrast, Steam charges a flat 30% of retail price. No additional fees and no need for a publisher. A $30 sale nets the developer $21.

In 2006 only 70 games were released on Steam, most commonly selling 77,000 units each.


In 2017 7,173 games were released (yes, 100 times as many games) selling only 3,000 units mean average. Source:

This is why the late 2000s were so huge for game development. A developer could charge the same and make 3x the profit or charge ⅓ the price and potentially sell 3x the volume. Lets Play and Steam created a boom unlike anything ever seen in PC gaming, and low quality games REALLY struggled in these times.

Kickstarter Kickoff

In 2009 Kickstarter began and by 2012 it was massive. It was, in theory, a dream come true for both developers and players. It meant no more publishers, direct access to developers, and full creative control to indies!... Well, you know as well as I do it didn’t actually do any of those things.

In the example above I showed why PC game publishers were already dead before Kickstarter ever began. Steam killed them in 2006-2009. “Publishers” are more developers at this point or nearly extinct. We also know, thanks to hindsight, most of the developers didn’t really give backers significantly more access than they had before. In fact, I would argue that they made the signal to noise problem worse. More players throwing their ideas and opinions around than we had before, now with the sense of entitlement their 20 dollar donation got them. Before Kickstarter only the hardcore fans would follow their favorite devs in the past.

In 2012-2015 the dream was real. Today we're seeing less than half of that on Kickstarter.

Instead, the breakout success for gaming on Kickstarter came from Doublefine, an established company that already had access to capital and investors, but knew it was cheaper to get free money from fans. While there are a few true success stories on Kickstarter that achieved exactly what the platform was meant to, mostly it was a PR and free money grab for established names who didn't need the cash. You can’t blame a developer though, Kickstarter basically eliminated all the risk of game development. Payment in advance, if you didn’t produce, there wasn’t even any legal action that could be taken against you until they updated their policy in 2014.

But as gamers we were once again buying games blind.

Early Riskless

When it became apparent that people were using Kickstarter as a “super early” pre-order mechanism more than a funding platform, Valve threw its hat into the ring with the concept of Early Access in 2013 (See the graph above if you're not sure why they did it).

The promise? A playable game (hey that is an improvement on a Kickstarter!) that gives you better access to the developers and… wait doesn’t that sound familiar? 

The launch of a game is the easiest and best time to get press attention and draw players. A successful game snowballs this attention and playerbase into a massive windfall of money or, more often, doesn’t and causes the dev to go bankrupt (it’s a high risk industry, that’s just how it goes).

But remember: A game demo hurts sales.

The problem with Early Access is you’ve used your moment in the sun to show off a game demo that will not live up to people’s expectations.

In the blind purchase days a bad game gave way to real rage against developers. This time, however, because it is under the guise of "unfinished" the dream remains: That their unfinished game will turn out to be perfect and to justify our purchase, we tend to be defensive when someone points out the warts in an unfinished mess.

This is taken entirely out of context, fyi, but its the kind of comment you could easily see on the forum.

The simple fact is Early Access is not only a disservice to the players, it is a disservice to the developers too. It makes it harder to market their product and distracts them from game development, as they are forced to place their limited resources into managing a community that will undoubtedly start making unreasonable demands. Or maybe they don't spend ANY time managing their community, which breaks the "dream" players have that they get a say in things. While it seems like free money, the simple fact is I believe most developers and games would be better served by avoiding Early Access and following a "traditional" route. I am specifically avoiding talking about developers who run out of money and need Kickstarter/EA to finish their game… because if that is the situation you find yourself in as a developer, you’ve already failed.

Posted in 2015, Sergey shows you only get to launch a game once

We are in the darkest timeline, where the best case scenario is buying an early access game eventually gets you the game you could have just waited to purchase, and the worst case scenario is the developer takes your money and never lifts a finger (Towns dev, I am still angry at you).

Open Beta

So what’s this got to do with Open Beta? When the internet became a household thing, online gaming came with it. From Meridian 59 to Ultima to Everquest, Open Beta started as a brilliant hybrid of marketing and development needs. The issue was two-fold. First, the development team needed a way to test things on a large scale. How will the servers do under full load? What places are players going to get stuck? Have we overlooked some weird corner-case balance problem? Second, from marketing you never want to launch an online ghost-town. Players beget more players and start that snowball that makes you rich. I guess Blizzard’s name was apt afterall.

M59 was in beta for 5 months before launch and is the foundation of 3D graphical MMOs.

And so, for many years Open Beta meant this: A feature complete product that can be launched at any time that needs large scale testing.

It was your chance to play the game for free, see if you like it, help the developers do final testing. Maybe it would last a week, maybe a month, sometimes a couple months. In the end they’d flip a switch and say “Ok, now pay us.” And if the game were good, they’d convert those millions of “free” players into paying subscribers.

Slowly over time this concept appears to have change. I believe the concept of Open Beta was tainted by Freemium games, Kickstarter and Early Access. Now Open Betas often release feature incomplete games with large sections of content completely missing.

Dauntless does a good job being transparent with their development, but this is NOT a beta-list of minor refinements on a finished game; missing entire weapon classes and revamping play areas among many other things.

It is as if the developers can’t be patient and finish their game, hiding behind this idea of Open Beta or Early Access as a way to say “I’ll fix it later, but want to get paid now.” Only sometimes later never comes because the unfinished product has done nothing but drive potential customers away. Worse yet, unlike Early Access, Open Beta tends to be free, so all it’s really done is cripple the developer’s ability to make money in the long run.

So, in short: This is why I do my best to never buy early access games. It is why I do not believe developers or players who use the excuse “It’s open beta / early access.” I am happy to support my favorite developers by following them, telling my friends about their projects, and buying their game when it is done, but I am not here to provide them a free lunch.

Early Access / Open Beta is harmful to the developers, to the players, and to the game industry as a whole. We have moved from a model where we got to play and experience finished products before we purchased it to one where we purchase on blind faith that the concept will become reality, and are often the worse for it.

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