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How Microsoft and Sony are transitioning to day-one digital releases Exclusive
How Microsoft and Sony are transitioning to day-one digital releases
October 23, 2013 | By Matt Matthews

October 23, 2013 | By Matt Matthews
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    23 comments
More: Console/PC, Business/Marketing, Exclusive



When the Xbox 360 launched in November 2005 and the PlayStation 3 a year later, it was assumed that their digital storefronts would play a critical role in how they sold software to consumers. And while there have been many success stories in purely digital games like Castle Crashers, Trials HD, and Minecraft consoles are still mainly vehicles for retail software.

This dependence on retail has appeared to keep the biggest titles (Halo, Call of Duty, Assassin's Creed) from being available as day-one digital download titles -- games that are available on digital storefronts the same day they're available on retail shelves. As a concession to retailers who help move massive amounts of new software through pre-order drives and truckloads of lucrative accessories, on top of the original consoles themselves, publishers and platform holders have been willing to keep those games exclusive to retail for some period of time.

But it won't always be that way, and Sony's PlayStation 3 long ago began the transition to a post-retail world. Since January 2011, with the launch of Mass Effect 2 from Electronic Arts, over 90 games have launched on the PlayStation Store on the same day they were released at retail. A wide range of publishers, like Electronic Arts, Activision, Blizzard, Capcom, Bethesda, Ubisoft, Take Two, Sega and Tecmo Koei, have all all published their biggest games as day-one digital titles.

Microsoft's digital release strategy

Microsoft, on the other hand, does not appear to be doing day-1 digital releases. Using Microsoft's list of Games on Demand, and comparing with the retail release dates of those titles, the closest I could find was Just Dance 2014, which was available for purchase on the Xbox Marketplace three days after it hit retail. (It was day-one digital on the PS3.)

Even the biggest game of the year, Grand Theft Auto V, was available for purchase on the PlayStation Store the day it was released at retail, September 17, 2013. It was available on the Xbox 360 Games on Demand service a full month later, on October 18, 2013.

While those delays (three days for Just Dance 2014, a full month for GTA V) are still delays, historically they are very short. To get an idea of just how far each console company has come with its digital releases, I put together the following two diagrams.

On both diagrams, a point represents a game that was released at both retail and as a digital download. A game's horizontal coordinate is the original retail release date, and the vertical coordinate is its digital release date.

The red line is the day-1 digital line: where retail and digital happen simultaneously. I've also marked a line for the 6-month delay (orange) and 1-year delay (yellow) releases.

Here is the Xbox 360 diagram:



On August 6, 2009, Microsoft's Games on Demand service for Xbox 360 games launched with Need for Speed: Carbon, Oblivion, Bioshock, LEGO Star Wars: The Complete Saga, Viva Pinata, Mass Effect, and Call of Duty 2. Prior to that, the only titles on the service were for the original Xbox, but I've declined to consider those here and focus only on Xbox 360 games.

Those games represent the horizontal line of dots just below the November 2009 line on the diagram. From that point until late 2010 and early 2011, practically every game on the service was at least a year beyond its retail release date.

At the beginning of 2011, many games began moving onto the service that were only six months past their retail release dates. Then in mid-2012 the minimum delay moved to approximately three months.

In the past couple of months, that delay has gotten shorter and shorter, up to the three day delay that Just Dance 2014 had just a couple of week ago.

Sony dabbles in day-one digital

Using exactly the same approach, the diagram for the PlayStation 3 looks like this. (Click for a larger version.)



The difference is quite striking. As early as August 2007, the PlayStation 3 had its first day-one digital release. That was Sony's own Warhawk, the multiplayer remake of the PS1-era combat game. Almost exactly a year later, Microsoft would launch its Games on Demand service for Xbox 360 games, but the newest titles released were about two years old.

The next big day-one digital release on the PS3 would be NFL Head Coach 09, from EA Sports. Technically, this was released with a one-day delay, but at that time Sony's PlayStation Store updates were later in the week. (Regular followers of PlayStation Store releases know that actual update times used to be extremely random, varying by many hours from week to week.)

After NFL Head Coach 09, almost no new full retail games were released on the PlayStation Store until mid-2010. During the latter half of 2010, a few major day-one digital titles were released, but not regularly. Then in early 2011, the day-1 digital releases began in earnest, kicking off with Mass Effect 2 from Electronic Arts on 18 January 2011.

Throughout 2011 and 2012, those releases increased in frequency. In 2013 there has been a day-one digital release on the PlayStation Store practically every week, over sixty in the past twelve months alone.

Looking back to the beginning of this generation, consider how far ahead Microsoft seemed in its online console technology. It had years of Xbox Live service already under its belt (it launched in November 2002) and was already selling software digitally on the Xbox well before the Xbox 360 launched. Microsoft was the first to offer digital services like Netflix on consoles, and still has what is arguably the better platform for multiplayer games.

And Sony well, let me remind you that the PS3 launched with a PlayStation Store that amounted to a pile of HTML pages guarded by a browser user agent sniffer to try to keep out interlopers. Sony has come a tremendous way in seven years (though still no cross-game chat), and on the subject of digital software releases have far surpassed the competition.

The road to day-one digital

Microsoft is finally closing in on day-one digital releases just as the Xbox One and PlayStation 4, the first completely native digital consoles, are launching. Microsoft has taken years to ease into it, and it would be interesting to know how they developed the strategy that has guided them for the past eight years.

Sony appears to have simply taken the plunge early, with some cooperation from Electronic Arts on games like NFL Head Coach 09, Burnout Paradise and Mass Effect 2. Perhaps, being the underdog, it had little to lose by pushing precisely where the competition was weak. In retrospect, I suspect Microsoft will see in these past few years a missed opportunity.

Soon it will all be behind us. For years there has been a sense of dread and anticipation for the day when retail and digital are given equal weight in the market. In just over a month's time, that will no longer be some ideal in a distant future it will simply be reality. The graphs above tell a bit of the history that got us here.


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Comments


Sergio Juarez
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I don't think day 1 digital release is such a missed opportunity for MS as you think. Remember how angry the XBox fan base got when they found out they wouldn't be able to sell their used games in Xbox One? I can assure you the great majority still prefers hard copy to be able to sell their older games.

I hope this changes in time though, its sad how much that broken model of game reselling damages the industry.

John McMahon
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I hope people are given every right they have to do with their property as they will. Right now, what happens if Activision releases a licensed game like Marvel: Ultimate Alliance, but then the contract ends and they can't sell the product online anymore.

What about users who have the game and then can't re-download it? Don't they own a copy/license? Why is it terminated without their forwarning? Why can they just *snap* lose access to a game they paid for without any responsibility from the provider to ensure that access stays open.


Going digital-only, given the habits of existing content providers, just takes away freedom and power from the consumer.

Kujel s
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@john: these issues are not simple nor are the solutions to the problems with them. You do have valid concerns but it's not as simple as "consumer rights"!

Robert Schmidt
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That is because consumers don't understand SAAS and that is partly because the industry hasn't given them much incentive to adopt the model. So far all SAAS has meant is that the consumer pays the same price for a title but no longer owns it, they are just renting. That sucks. They have taken something away but changed the same price. One incentive they can provide is that the consumer can play the title on all their platforms, PC, Tablet, Phone and Console. I think Microsoft can leverage this the best as they have better access to multiple platforms. I would also like to see a subscription service were I pay an annual fee to have access to multiple titles. In the past we didn't buy games, we bought media. When we lost or broke the media we had to buy it again. With the SAAS model we should be renting content. Who knows how that is going to shake out.

Steve Cawood
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What annoys me is that the digital copies of PS3 games, at least here in the UK, are sometimes close on double the price of retail copies. Rip off.

Kujel s
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Why am I not surprised that sony is ripping off UK users like this.

Doug Poston
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Is it Sony ripping people off or is it some sort of digital tax by your country?

Kujel s
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@Doug: I find it unlikely there is a tax on digital sales in the UK, more likely is the UK branch of sony is just greedy.

James Yee
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Don't forget the Poor Aussies who get screwed both digitally and physically! O.O!

John McMahon
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I'm curious, since the digital versions require no physical content, like manuals, collector's boxes, etc, will they be sold cheaper?

I highly doubt it,as companies are too money hungry. Once a company has power it rarely gives it up without a fight. The video game industry is so tightly structured that every penny counts where sales are concerned.

Developers and publishers want to try a squeeze as much profit, especially indie developers who have families and employees to take care of.

Though, I haven't heard who handles the pricing for indie titles on the PS4 or Xbone

Kujel s
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As much as I'd love to point at this pricing issue and say sony or MS is ripping us off because they are greedy they aren't really the ones keeping digital prices at retail prices. It's the retail outlets who are doing it cause they don't make money off hardware sales so if they can't make money off the software either they wont carry the hardware and the platform holders have to accept such BS just to get their systems in the hands of consumers.

Ujn Hunter
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Retail or bust for me. Have fun trying to play all your "digital" Xbox 360 games once Xbox Live is turned off like it was on the original Xbox. I would be tempted to pay $5-10 more for games that included a "digital copy" with the physical release however, like they do with movies, but I'd never pay more than that for a digital only game.

Gravis Lord
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Kujel S, you are indeed WRONG. The PUBLISHER is the one who sets the PSN Store price. Period.

John Flush
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I'm a huge retail fan when it comes to release date games. Why? I'm paying $60 for it, if I don't like it I'll resell it to reduce the risk.

Digital though is beginning to win me over though for established store fronts, such as Steam or GOG. Why? because they aren't going anywhere and I like the convenience of not managing physical media. Plus, digital on these platforms eventually goes for 50-90% off. Meaning I don't care if I don't like the game, it was worth the $5-10 risk regardless. About 50% of my steam library are repurchases for the convenience.

However, day-one digital seems to continue to be a 'no-go' for consoles for me. I'm still wary of what will happen when my console dies and I want to play it again... Who knows, maybe it will be a non-issue once it becomes common enough for me to repurchase it on PC at $5 a few years later.

James Yee
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Well I can tell you on PS3 I was able to get back all my downloadable games when my PS3 was stolen during a move. Just re-downloaded them all like I would on Steam or GOG. It wasn't as EASY as Steam or GOG (I.e. no "Library" tab) but I was able to get them all up and running no worries.

Same on XBOX 360 and my multiple Red Ring machines and robbery. (I had five bloody XBOX 360's over it's lifetime)

Though I will admit the idea of them closing down older stores and hence my ability to download them again annoys me which is why I'm more PC centric than Console.

Dane MacMahon
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I'd be buying discs if I were a console gamer. Who knows how long the servers and system support will last, and I don't know about you but I still enjoy loading up a 10-20 year old game now and again.

Kujel s
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This one of the really cool things about GOG I can play PC classics from 20 or so years ago that would otherwise not run on my desktop.

Dane MacMahon
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One big reason I'm a PC gamer is the classics. It's hard to imagine hooking up an original Xbox today to play Deus Ex 2, but on PC I just double click it on Steam and go.

Hopefully HD remakes will become more and more common on PC, since the machines themselves aren't backwards compatible.

Dave Long
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Aye, although ironically the easiest way I can play PC classics Panzer General and Allied General (albeit on a lower resolution than I'd like) is to pop the PS1 disks into my PS3 ;). Hopefully we'll get better longer-term options for backwards compatibility on PC than the likes of the clunky DOSBOX we get on PC at the moment.

Kujel s
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@Dane: Actually that's exactly what I do. Plus I really loved Deus Ex Invisilbe War but wasn't very impressed with the original and Human Revolution wasn't quite as fun either :(

Dane MacMahon
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I meant to type HD remakes should become more common on consoles, obviously. My mistake.

I'm quite impressed with how almost anything from Sony worth playing on the PS2 has been ported to PS3. Unfortunately now the PS4 is coming out and nothing on PS3 works on it, so the problem instantly resets itself.

I know most consumers don't care about game preservation but for those of us who do it's insanely frustrating.

James Yee
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I agree though I do HOPE (not expect, but HOPE) that with Gaikai's launch next year Sony gamers across the board will have the option to access more of the classics.

What I'd LOVE for them to do (again doubt it) would for them to have a Netflix type option. I pay a monthly fee and I have streaming access to all previous generations games streamed to my device. (So PS3's get PS2 and one while 4's get PS3 stuff) Though I suspect they'll try and do something I think is dumb and go the PPV or Digital Locker format where you have to buy each game to stream it. :|

Nooh Ha
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Thank you Matt for a fascinating piece of research.

For those comparing retail and digital pricing, do remember that Sony/MS/Nintendo adhere to RRP out of principle in the same way that publishers stick very close to RRP for PC digital releases on Steam/Origin etc. None of them can be seen to undercut retail as retail is still too important to piss off.

In contrast physical retailers in corners of the western market where there is healthy competition and no barriers to discounting (as exist in some parts of Europe) are free to do what they want with pricing. In hyper-competitive countries like the UK, negative margin pricing is amazingly commonplace as is significant wholesale price discounts within weeks of launch and so the gap between retail and digital pricing is far more pronounced and obvious than it is in most other countries.


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