On April 19, 2007, a conference of game developers, IT entrepreneurs, internet security experts, telecom executives, and technology investors gathered in San Francisco to take part in Mastering the Craft of Online Gaming, a day long event in which the complex issues surrounding the online gaming market were discussed.

The Future of Digital Content Distribution

The day began with a conversation on future trends in digital content distribution moderated by Jerry Godwin, Director of Online Services for the Themis Group. Panelists included Brian Taptich, VP of Business Development for BitTorrent, Mike Gordon, Co-Founder and Chief Strategist at Limelight Networks, Romain Nouzareth, Founder and CEO of Boonty, and Gary Croke, Director of Marketing at CacheLogic.

Taptich, began the conversation with a warning; “The current internet is broken and will not scale to meet demand,” he said. However, he remained optimistic about the future, believing that game designers will adapt to network constraints by making consumers an integral part the online gaming business where they can contribute resources such as CPU cycles and creative assets. He was also hopeful that new distribution and business models would help alleviate the current hits driven model of game publishing.

Croke said file sizes were too large, which can create a margin issue for publishers who are trying to distribute online. He also noted that frequent, large patches to online games have a negative effect on game play and the number one impact on customer satisfaction is slow game performance. “Broadband speeds are lagging behind the rest of the world, part of the problem is geography, but the problem will only get worse,” he said.

“The PC will really take the dominant position,” Nouzareth predicted. In the future he expected to see more casual players drawn to PCs over consoles, with women comprising much of the new audience. He envisioned new kinds of games, simpler in focus, with business models based on micropayments.

Gordon felt that games such Guitar Hero II pointed the way forward by creating an ongoing revenue stream for publishers through its use of online Xbox Live micropayments. He then described how implementing online features in games can help to unite the needs of the publisher with the consumer, extending the life of a game.

When Nouzareth suggested that retailers might have a role to play in online distribution, the audience agreed, pointing to Nexon America’s Maple Story and the publisher’s partnering with Target to sell pre-paid cash cards in its stores.

Nexon's free, 2D, side-scrolling MMORPG Maple Story

Taptich marveled at the growth of MMOs in the wake of Blizzard’s tremendously popular World of Warcraft but worried that the online business may possibly be over invested. He also questioned whether retailers were truly interested in synergy with online distribution, noting that big box retailers such as Wal-Mart had so far enjoyed only limited success in the online space. “Retailers are not going away,” he said.