User:Masem/draft/Video game distribution

Video game distribution is the final stage in the development cycle of video games, where the final game product is mass produced, packaged, and shipped to retailers and consumers.

Like with other entertainment media markets, the nature of video game distribution has gone through several changes since the market's emergence in the 1970s. The type of media has significantly changed from ROM cartridges to optical media, but also in the shift from physical products to digital goods, eliminating some of the traditional roles in the distribution chain.

Roles in distribution
One a video game developer has completed a game to a state where it is ready to ship (frequently referred to as "going gold" in reference to writing the final version of the game to a gold-colored master disc), then there are several steps that occur to bring that game to market.

Physical releases
For a physical game release, the video game publisher typically takes over distribution from this point. They will take the master copy and give it to either an internal or third-party mass production company. In the case of game cartridges, this will involve of duplicating the code onto EPROMs and then assembling the circuit boards to house the EPROM and the cartridge case. With other types of media like floppy discs or CD-ROMs, this step simply involves copying over the master version onto blank media, often added by mass duplication machines. Once the copies are made, they are then packaged and prepared for shipment. The publisher, with the aid of the developer, is also typically responsible for other factors related to distribution and marketing, such as having games rated through a video game content rating system, and preparing the marketing and promotional materials for the game.

Distribution of games may occur through a few routes. In some cases, larger retailers with distribution capabilities may buy games directly from the publisher to fill their stock. Otherwise, large wholesale distributors buy quantities of games from the publisher, and then smaller retailers order desired quantities from the wholesalers.

Because there are multiple routes from the publisher to retail shelf space, video game hardware and software sales performance may be measured more frequently by the "shipped" quantity, a metric the publisher can directly measure, rather than the "sold" quantity which requires data from individual retailers, and is generally harder to collect. Market research groups like The NPD Group use their connections with the larger retailers and vendors and other market estimates to project the "sold" quantity of a video game.

Digital releases
With digital distribution, which lack the need for a physical product, there are fewer roles involved. A video game publisher may still be employed to help distribute and market the game. The publisher may have their own digital distribution service, or can help prepare the game for release on third-party storefronts. Alternatively, the developers themselves may act as the publisher using third-party storefronts that offer direct contributions of games to their service.

Third-party storefronts offer the means for the developer or publisher to promote their game, prepare patches and updates for the game, and adjust the game's price as for part of a discounted sales. Many storefronts also provide redemption keys to the developer or publisher which they can share either directly to consumers or make available in third-party key resellers. These key codes allow players to redeem that game on that storefront. Game storefronts typically take a revenue cut of each purchase made via the storefront, with the industry norm being 30%.

Console hardware and accessories
The distribution of video game consoles and accessories has some differences in the distribution area. Once a video game console is designed by a manufacturer, they will work within one of their internal factories and with third-party contract manufacturer such as Foxconn or Flextronics as to secure sufficient supply chains of the required parts to then be assembled at a factory in large scale. Preliminary testing of completed units may be done at the factory, while more intense testing may be performed once the units are shipped to the manufacturer. At this stage, the manufacturer will then pre-install any software onto the consoles and package them for shipment. At this point, the manufacturer may sell units directly to consumers or to retailers, or will work again through a wholesaler to distribute the consoles to retail outlets.

ROM cartridges
Prior to 1976, most home consoles were dedicated; the logic for the games supported on the console were based on the internal circuitry or fixed into the logic of specialty microprocessors like General Instrument's AY-3-8500. The Fairchild Channel F in 1976 was the first programmable home console that supported swapping of games through a ROM (read-only memory) cartridge which, when slotted into the console, provided the logic for the game through its own integrated circuit design. The use of cartridges for console games was popularized with the more successful Atari 2600 in 1977.

The introduction of low-cost flash memory around allowed more compact and higher capacity cartridges in the 2000s. Nintendo used such media extensively along its Nintendo DS line as well as for the Nintendo Switch.

Data storage media
Most early computer games were distributed through magnetic storage mediums, including magnetic tape data storage like cassette tapes and floppy disks, typically the 5¼-inch and the 3½-inch versions. The cassette had generally been more popular in Europe and the United Kingdom, while floppy disks were favored in the United States. The industry ultimately had standardized around the use of floppy disks just prior to the introduction of CD-ROM as a medium in the early 1990s.

Optical media
Optical media such as CD-ROMs and DVDs as game media came into prevalence in the early 1990s as the cost and reliability of the technology made it practical for consumer use. Optimal media, in general, have much greater storage capacity than ROM cartridges or other physical media, and are easier and cheaper to mass produce, on the order of days rather than weeks.

The adoption of optical media for home consoles took some time. Some of the fourth generation systems developed add-on systems that could read from CD-ROM discs, such as the Sega CD for the Sega Genesis, and there were early attempts at dedicated CD-ROM consoles such as the Philips CD-i system, though the selection of games for these systems were generally small. Sony's PlayStation in 1994 was the first major console to exclusively use CD-ROM for game content, with Sony capitalizing on its knowledge from Sony Music to use lean manufacturing approaches to produce enough copies to meet demand, helping it to get an edge on cartridge-based systems. Final Fantasy VII was one of the key titles demonstrating the importance of the CD-ROM technology, as developer Squaresoft had determined that Nintendo's cartridge-based systems would not be sufficient for the amount of content they wanted to include in the game.

In personal computing, CD-ROM as a distribution medium was also gaining favor around this time as it simplified packaging of games using one CD-ROM as the installation medium instead of dozens of floppy discs. CD-ROM's killer app on personal computers were Myst and The 7th Guest, 1993 adventure puzzle games that incorporated full-motion video into gameplay.

Since then, both consoles and computers have shifted to larger capacity optical media offered by various DVD and Blu-ray formats. For consoles, supporting these formats also allows the console to playback other media distributed on CD-ROM, DVD, and Blu-ray. Microsoft had briefly supported HD DVD, a competing format to Blu-ray, with the Xbox 360 but since had standardized on DVD and Blu-ray. Sony used their Universal Media Disc (UMD) format, an optical disc stored within a special cartridge-like case, for distribution of games and media on the PlayStation Portable, but did not continue to use this for its later handheld, the PlayStation Vita.

Digital
Digital games are provided without any physical media, using electronic communication, most often the Internet, to download the game from a server. The game is then saved to a storage device within the console or computer. Typically this digital distribution requires installation steps to complete the installation and make the game ready to play. This can be done manually, while most consoles and storefronts on personal computers can automatically complete these steps. Players can typically download that game content to other systems they have.

Cloud gaming
Cloud gaming is a further extension of digital distribution, eliminating the need for the player to download the game itself or even have access to the required gaming hardware. Instead, the game is played on hosted servers, streaming the video and audio output from the game to a lightweight application on the player's system (such as through a web browser) and passing along player input to the server. All the game computation aspects are performed on the server side itself. While this approach simplifies playing the game for the user, it can suffer from latency between the player's input and registering it on the streamed output, and also typically requires a high amount of available bandwidth for the visual display.

Retail
Video games on physical media are most frequently distributed through retail stores. Retailers can include department stores and hypermarkets like Walmart and Target, consumer electronics retailers like Best Buy, and specialized video game stores including GameStop, EB Games, and Game. Online storefronts such as Amazon.com also serve as a retailer of video games.

In the United States, video game distribution was closely tied to other media distribution such as CDs, VHS tapes, and DVDs.. In those markets, Tuesday had become the standard day for releases, and as video games were simply another form of media, the Tuesday release date for new games in the U.S. was set.

In the early 1980s in the United Kingdom, games were distributed in their own channel rather than with other media, originally sold whenever they had arrived in stock, without any rigor in the supply chain. Larger chain stores, like the Dixons Stores Group, found this approach to be disruptive, as they typically placed advertisements for their stores on Fridays and Saturdays, and because of the unscheduled planning of when games would arrive, could not include these items among their ads. In cooperation with chains, the European Leisure Software Publishers Association (ELSPA), and Gallop, a media sales-tracking service, the UK industry decided to fix game releases to Friday to alleviate the concerns of the retailers, giving them time to plan on stocking games. This also aligned well with typical paydays, so that people would buy new games on Friday to enjoy for the weekend.

In Japan, games had typically been released on Thursday. During the time when games were available on cartridges, the releases would typically be limited and sell out quickly. This led to schoolchildren often skipping school to be able to purchase new games before they sold out. Specifically around the time of Dragon Quest III's release in 1988, local police told developer Enix of their concern about the children being truant from school, so Enix subsequently moved releases of future Dragon Quest games to Saturday. There had been an urban legend that this was a mandate from the Japenese government that banned sales on weekdays, but Enix developer Yuu Miyake affirmed this was a voluntary action Enix took and only for the Dragon Quest series.

The disparity of different release dates in the different regions started to vanish as companies began to favor global release dates. One of the first such titles with a global release date in the U.S., Europe, and Japan was Sonic the Hedgehog 2 on November 24, 1992, where Sega's marketing team came up with the idea of a global launch and using the current U.S. Tuesday release day as their target, pushing the November 24 date as "Sonic 2sday". More video game publishers started to coordinate global release dates in the early 2000s. Because of the dominance of the U.S. portion of the video game market, the industry began to coordinate around the U.S.'s preferred Tuesday release date for global retail releases.

Associated with physical release is the secondary market of used game sales. Players can sell back games they have completed for store credit to buy new games, while the store then offers the used game at a discounted price to other buyers. This is a core business model of GameStop, selling both used and new games. Video game publishers have argued used game sales harm their business, and established means to capture ongoing revenue models through post-release game content that players can buy, such as downloadable content and microtransactions.

Mail-order/Catalog sales
While home consoles and games were initially sold through retail stores through deals made by the, early personal computer games were made by individual programmers or small teams which lacked the capability of securing such deals or producing copies of their games at volume.

Freeware/shareware
Freeware and shareware were means of distributing non-open source games and software through several channels, both through a retailer path of demo discs that could be obtained for free at a store or part of a pack-in media for various computing magazines, and through digital distribution on both BBS and the Internet. Freeware refers to non-open source software given away for gratis, while shareware refers to free versions of a commercial game, either whole or in part, where the user could try a portion of the game without paying any money, and then would need to pay the developer or distributor for the full copy of the game, typical through a offline sales route such as mail order or via phone. The shareware name was used because it was intended that players would share the freely-available portion of the game with others. The shareware concept was popularized with successful titles from developers like id Software and Epic MegaGames in the early 1990s.

Digital distribution
The use of digital distribution for games had been around as early as the 1970s as ARPANET (the predecessor of the current Internet) was introduced across universities and other research facilities. While ARPANET was intended to share research information, students and academics also used it to distribute the source code for games to be compiled and run on local hardware. Colossal Cave Adventure, one of most influential early video games, was one such game, where its code was widely distributed after its original author, Will Crowther, had completed it, and led to improvements made by Don Woods and others. As ARPANET transitioned to the Internet, services like USENET were able to support this type of distribution, including the distribution of binary files. This was primarily intended for distribution of open source software, and not commercial products.

The introduction of online services, either through bulletin board systems (BBSs) or through the broader availability of the Internet by the mid-1990s made it possible to distribute games without any physical media. However, systems for purchasing games through online systems had not been established, so in most cases, these games were still open source titles, or freeware or shareware games. Sites like Tucows were created to act as central repositories of these games in the early 1990s. With improvements in the World Wide Web backends for providing secure payments and distribution, more integrated storefronts for software applications including games appeared, such as Digital River in 1993. Dedicated gaming storefronts arrived in the early 2000s, including Stardock Central and Steam. Since then, numerous digital storefronts have emerged. Some of these are operated by the publishers directly, such as Origin and UPlay, while others are third-party systems such as Humble Bundle and GOG.com. While some of these storefronts were closed, limited to only the games the storefront operator curated from potential offerings, others, like Steam, developed ways for developers to list and distribute their own games with only minimal oversight by the storefront operator.

For console games, there were early attempts at software delivery prior to the Internet. The Sega Channel was a special adapter for the Sega Genesis that could be hooked up through coaxial cable by a cable television provider through which they could download games and demos. The Satellaview was a modem add-on for the Super Famicom that allowed players to access games, demos, and other content through satellite communications. Internet capability was introduced on the first Xbox console in 2001. With the Xbox, Microsoft introduced Xbox Live, a service for players that helped with connecting with friends and matchmaking. With the release of the Xbox 360 in 2005, Microsoft also introduced the Xbox Games Store which integrated with Xbox Live to allow players to buy and download games to their console. These features continue to be available across the Xbox console line, and both Sony and Nintendo have followed suit on their own console family, with Sony's PlayStation Store and Nintendo's eShop.

With mobile games, there were early attempts to offer game downloads through Wireless Application Protocol by stores operated by the individual phone or network providers. However, mobile gaming took off with the introduction of the iPhone in 2007 and the App Store. With the App Store, users could buy and download new apps including games for their own phone, with payments managed by Apple's systems. The App Store was open enough to allow registered developers to create and list their own products with minimal oversight from Apple. Games were one of the most popular types of app downloads from the App Store. Google followed suit with its own Play Store that worked for Android-based phones.