Digital rights are the key to next-gen success

The upcoming PS4 versus XBox One fight could easily be won over policies instead of games.

Console exclusives will dominate conversation out of the gate but I expect a stalemate a year from now; the incentive for cross platform gaming is especially strong this next generation. The XBox One and PS4 share a similar, PC-like architecture which makes ports from one console to another easier. In addition, rising PC and mobile competition should translate into fewer overall consoles sold. It’s smart business sense for games to launch on as many platforms as possible.

However, digital sales will be dominant on consoles sooner than many skeptics think. A digital sales policy that’s straightforward, permissive and consumer friendly will move sales more than any game exclusive will. Just look at the massive success of the iOS App Store, Steam and Netflix; clearly content fuels the majority of sales, but a strong digital policy is an integral part of each platform. For instance, Netflix has a single flat fee and few account sharing restrictions. The iOS App Store utilizes iCloud to auto download app purchases to every iPhone and iPad registered to a single user.

To Microsoft’s credit, their original XBox One E3 DRM policy anticipated a digital future. But they reversed, and as of now we’re largely in the dark on both Sony’s and Microsoft’s digital sales policy.

Each company should start by emulating Steam’s policies:

  • All console purchases should be tied to a user account, not a single or set number of devices, with unlimited downloads to a registered console.

  • Sales should be common with game prices fluctuating often. Older titles should be eventually marked down to meet lower demand.

  • Allow customers to pre-download games in a locked state at their leisure, before launch day. Then offer a quick unlock code when the game is released.

But that’s just the first step. The disc market for console games still has some clear advantages over digital: A strong used game market, multiple vendors competing over prices, the speed of a disc install versus a huge, multi gigabyte download. To address these, a digital market should provide further incentives like:

  • Digital downloads available a few days before a game shows up in stores.

  • XBox/PSN credits or other incentives (e.g. extra subscription time, themes, bonus content) for “trading in” digital downloads.

  • A true digital used market where gamers can buy and sell games (albeit with likely heavy restrictions.)

Granted, the previous suggestions would require massive coordination with game publishers, vendors, and the gaming public as a whole. Even reaching digital parity with Steam is an ambitious goal for the short term. Yet, much like we’ve seen in the music and app markets, digital sales isn’t just an option, soon it will be the dominant option. If Sony or Microsoft introduce a strong digital rights policy before their competitors, I’d expect it to be a huge factor in terms of which company “wins” this gaming generation.