Steam highlighted a gap in the market for digital video game downloads, and launched it’s store front in September 2003. Originally though, Steam only supported their own games, but after a few years, the now dominant store front began selling games digitally on behalf of other developers.
This revolutionary platform sparked some debates however, as to how much the developers and studios should pay in commission, in order to use the platform. As a result, the industry standard commission that developers pay digital store fronts currently, is in the region of 30%.
Other companies recognized the potential to make large amounts of money from the new digital revolution, and with the Xbox Marketplace, and the PlayStation Store, it’s become a lot easier for developers to publish their games to wider audiences, at the expense of revenue.
One of the newest store fronts to be in development is Robot Cache.
Robot Cache already has some of the top studios signing up to it’s services, as it’s offering them a bigger cut for their games, operating at less than 30% commission.
Robot Cache will also offer you the chance to voluntarily mine a digital currency called Iron. If you choose to mine the currency, will then be able to pay for games using the Iron you’ve mined. They also plan to allow you to be able to resell your PC games digitally, for a return of 25% in Iron, which you can then use to buy more games. Robot Cache already has some of the top studios signing up to it’s services, as it’s offering them a bigger percentage for their games, in return for using their service.
Having secured a $3 million investment from Millenium Blockchain, it will surely revolutionize digital store fronts.
Store fronts such as PlayStation Network, Xbox Live, Steam and so on, allow developers access to their audiences, exposing games to millions of potential buyers. There’s a definite need for developers to offer up a percentage of their sales for the exposure and use of the platform, but there is a solid argument for the lowering of fees. Granted, service providers have running costs to maintain their stores, so a fee has to be charged, but does it need to be so high?
Smaller store fronts can take advantage of the 30% cut however, allowing themselves to negotiate sales terms with developers, by offering the game for sale on their platform, in return for a smaller cut. It gives smaller services a chance to sell the same games as bigger store fronts, and still manage to compete.
Retail stores are closing faster than ever. We’ve seen large high street brands close down like many of the Game stores and the recent Grainger Games in the UK. This reflects the change in the industry, with online stores and digital game downloads taking huge portions of market share. This has lead to other retailers having to change their stock buying habits, to reduce risk to profits, and end up paying even more in storage costs.
This isn’t just happening to the gaming industry though, for the first time ever, in March 2018, online music streaming overtook physical sales.
According to Statista, 118 million games were downloaded in the United States alone in 2017, which made up 79% of game sales. Just 21% were bought as physical copies. Bearing in mind, digital format sales include subscriptions, digital full games, digital add-ons, mobile apps and social network gaming.
Digital video game downloads are becoming increasingly popular, but the question remains, will physical copies eventually be a thing of the past, and how soon will they start to become redundant?