Well, E3 has come and gone and now most of the dust has settled. A lot of stuff was announced and we got to see a lot of new games, it was all very exciting. Among the most talked about announcements were the new motion controllers from Sony and Microsoft. As you may have read, Natal doesn’t have me all that excited, and I personally feel that these motion controls do not represent the true future of gaming in any way. While that may be true, there is a new feature on the Xbox 360 that makes my pants feel funny. While everyone was focused on Natal they missed what Microsoft had to say on Games on Demand, a feature which they are greatly underplaying.

Marc Whitten made a post on the Xbox Live Community Team’s blog about many of the Microsoft E3 announcements and had this to say about Games on Demand:

Xbox LIVE has changed the way you play your games, and now we’re changing the way you access them, with the digital distribution of full Xbox 360 games. The Games on Demand channel will launch with a library more than 30 great games, from classic hits like Mass Effect, BioShock and Assassin’s Creed, to family favorites like LEGO Star Wars: The Complete Saga and Sonic the Hedgehog. You’ll have access to a wide variety of great games, downloadable in only a few hours and at the touch of a button. We’ve also added the option to purchase Games on Demand directly with your credit or debit card.

I truly believe that GoD represent a progression in the way that consumers will be able to access video games in the near future. It may seem like a small step to most, but this really is a large step in the progression to complete digital distribution. Microsoft started with their XBLA service and then added the ability for in-game DLC. Later they offered Xbox Originals for download, and now they have come full circle and have added a full download service for current generation games.

Games on Demand will offer benefits to both publisher and consumer, though I do foresee a couple of problems with the service already. Most of the benefits of digital download for the publisher are pretty obvious. If they don’t have to manufacture and ship any packaging or discs it will cut down on their costs quite a bit. As everyone knows, less overhead means more profit. Digital downloads also will eliminate the need for developers to fit all their content onto DVDs, in fact the system would not need a Blu-Ray player at all.

Mass Effect = $20

Used game sales, this is the most important benefit to publishers compared to anything else. Publishers have complained about the used game market for as long as it has existed. They have already removed the resale market for PC games long ago with the introduction of CD keys and online validation but have not managed to dampen the console used game market, yet. They have made attempts with DLC to slow used game sales and that has worked on a few games like CoD 4, Halo 3, or even Fallout 3. Despite their efforts the used game market is stronger than ever.

This is why publishers should love Games on Demand. If the consumer buys the game online, they can’t sell it to anyone. The game will be attached to that person’s gamertag and will not be able to be transferred. If publishers are able to transform the market to the point where 50% of games being purchased are digital downloads, that will put a huge damper on the used game market, and that is exactly what publishers want.

As far as the consumer goes, I think Games on Demand will have plenty of benefits. First and foremost, you get to be even lazier than before; that’s a bonus in my book. Never again will you have to go to the store to buy a game, get out of your chair to change discs, or be asked to reserve the new Madden game when you are buying a copy of Professor Layton. If you watched the silent video above you can see how simple it is to switch from one game to another.

On top of that, the store never closes (except for scheduled maintenance), and they are never sold out. Even if it is 2AM and you are playing a demo of a game that just came out you won’t need to wait until tomorrow to buy it. You also never have to worry about discs getting scratched by your younger sibling, pet, or even the console itself. All of the games will also load faster and the system will run much quieter when a disc isn’t spinning.

Imagine how different a huge game launch like Halo 3 would be with Games on Demand. Microsoft could allow people to buy the game several months in advance right from their console. Then, as soon as the game goes Gold and discs start getting printed, it could be put up on Xbox LIVE and the game could be pre-downloaded by all those who pre-purchased the game. You don’t have to deal with waiting in line for a day or sitting out in the cold; everything can be done from the comfort of your own home. They could allow you to start playing the game right at midnight on launch day; fuck, they could let everybody start playing the game a day earlier that retail release. That sounds great to me.

Games on Demand Launcher

As excited as I am about this new service, I do have some reservations and general concerns. They did announce that all games on the GoD service will be the same price as their retail counterparts. I really think this is a big mistake. If you aren’t getting the packaging, disc, and instruction manual, it should be cheaper. I also think that if Microsoft put up the games for $5-10 cheaper online depending on the retail price, it would offer greater incentive for the consumer to buy it online.

They also need to take some protips from Valve. Valve has proven that their free gameplay weekends coupled with their 25-50% off sales can increase sales of a 6 month or even 2 year old game greatly. If Microsoft doesn’t do any sort of free weekends, they at least need to have big discounts at some point. One other negative point in regards to cost is that they won’t offer any refunds. There is nothing worse than buying a game and finding out it sucks, but I guess that is why they allow you to download demos of most of the games.

My biggest concern though is hard drive space. There are a lot of systems out there with a 20GB hard drive, which is essentially only 12GB, which in turn means you can only have 1 game at a time. The current Pro bundles come with the 60GB and the Elite’s with a 120GB. Even the 60GB will only be able to hold about 6 games. They have said that you can delete games and re-download them at any time but what we really need are larger hard drives.

I must say that Justin “Clown Shoes” Murray was half right on one aspect when he said that the next generation would be all digital distribution. I think it will be a large part, but disc sales will still account for a significant portion of game sales over the next generation. But, he is still a fucking moron for citing that they would have 300TB hard drives. As for a solution, Microsoft should keep the hard drives in their SKUs the same as they are now. But, they will need to offer larger storage options in the near future that don’t cost $140 for a 120GB hard drive, they are totally shafting the consumer on that. I can buy a 500GB 2.5” hard drive for $100 from Newegg. Microsoft should drop the price of their 120GB to $60 to match the price of a new game and come out with a new hard drive, most likely 250GB, at price it around $100.

So there you have it. I am definitely looking forward to the new Games on Demand feature of Xbox LIVE and can’t wait to buy a game through the service once it becomes available.

[images courtesy Engadget]

[video courtesy Joystiq]