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XBox One, DRM, and the future of consoles

By Scott Tibbs, June 28, 2013

Two years ago, I predicted that games for the next generation of consoles - the third Xbox and the fourth PlayStation - would be distributed via digital download instead of physical media. Obviously, I was wrong. But it is worth reviewing Microsoft's major blunders into the world of digital distribution and what it means for gaming.

Microsoft had the right idea with digital distribution, which I maintain is the future of gaming - especially as hard drives get bigger. The current generation of consoles (PlayStation 3, Xbox 360 and Wii) all have extensive libraries of games that are available via digital download, and games for iOS and Android are distributed only by digital download. The PC game market also relies heavily on digital downloads thanks to services such as Direct2Drive and Steam.

The idea of buying games from the comfort of your living room for your favorite console remains an intriguing possibility, but the reason Microsoft flopped so badly is that they announced it in such a halfhearted manner. Switching to a download-only distribution system would be an innovative change, but that is not what Microsoft did. They proposed digital downloads alongside physical media, and that is what killed it.

People are used to being able to play physical media right out of the box, with no restrictions on the ability to use it. Movies on VHS or DVD, games on cartridges or discs, and music on CD have always had this option with no restrictions. Telling gamers that they have to validate the game they own legally on disc was a surefire way to annoy or even anger them. Cutting off the used game market hurt the idea badly. The fact that Sony kicked Microsoft while it was down by announcing no restrictions on PlayStation discs was the end of the experiment.

It is unfortunate. No one expects to be able to re-sell a game they download from Direct2Drive or Apple's app store. It would have been a transition that most gamers would have been willing to make - especially given the option of accessing your entire game library from a friend's house by logging into your account, or digitally loaning games to friends and family. Where Microsoft failed was being unwilling to go all the way and have games be distributed only by digital download. Restrictions on the use of physical media that people have purchased was a huge blunder.

Between the current generation of consoles, PC gaming and mobile devices, the gaming industry has shown that it is ready for a dedicated game console where you only buy games digitally. Digital distribution is still a possibility for the next generation, but it will have to be implemented slowly and more carefully than Microsoft's haphazard and halfway effort with the Xbox One. It will be interesting to see where digital distribution is in five years.