There is definitely no point in going to a shop and getting this physical media from a shop. But ordering online I can imagine that a certain fraction of people would pay for this additional box with everything stored physically inside. Why not.

Anyway, analysts said before that 2011 will be the breakthrough of digital sales of games and they were right. Not really surprising though that we now see it.

As for the consoles: The XBox has a big enough hard drive and is easily connected to the net. So digital downloads for games is probably also possible there now.

I don't see how pirating is better. Why do you think so?

1000 x $0 = 0.
1000 x $0.5 = $500.

If we assume that the dev would need $1 to break even, paying $0.5 for a game would still leave the devs with a loss, but they would at least only lose half of what they need to earn, and not the whole sum. So I don't understand how you reason that pirating a game is better than paying something for it.

Honestly?

hahahaha

Congratulation. You just proved all theories about monopolys wrong. Normally a sign of monopolistic structures are high prices because of the lack of competition. In your model, competition just has only a negligable effect. Not what one observes.

Even if some company like EA only sold their games on Origin there would still be influencing competition in the form of competing products from other companies with the same target audience. Similarly a fully digital console, like an imaginary future Xbox, would still face competition with other consoles, and games on the service would still face competition with each other, getting developers and publishers to ask for sales to boost interest.

A real monopoly in gaming would require a single publisher making all games for a chosen target market, which is pretty far-fetched.

Actually, I quite clearly pointed out that there will always be competition in form of piracy. And, current economic theories aren't applicable to the digital market (infinite goods, no delivery costs, no "production" costs).

We have a current "de facto" monoploy of Steam on Steamworks titles. And games have never been cheaper.

Yes, honestly.

I don't understand your reasoning. Since paying less and paying nothing both hurt, you might as well pay nothing?
I am assuming that losing 100% of the profit is much more damaging to a dev than losing 50% of the profit, which is why I don't understand how your reasoning makes sense to you. (Although I'll be the first to admit that I know nothing about game company economics.)

Then again, I'm getting the feeling that you're not really coming from a "how can I support the dev to the best of my abilities" point of view.

Actually, I am. This "paying less then 10$ on a bundle should have ticked you of."

Let me humor you about your mistake.

A bundle needs between 1$ and 0.5$ to cover the transaction fees. If they use paypal probably even more. If you pay a million times 50 cents, they did not make any losses, if they are lucky. More likely, every "purchase" below 1$ incurres fees for the people that host the bundle. They might be just a few cents, but they still cost them money.

And, on top of that. You have some entitled little gits that think giving/trading away keys you got for 5$ is ok to do. Which draws money away from potential other buyers. Maybe even some that are serious about supporting the devs.

So yes, it is better to simply pirate a game instead of paying 50 cents for it.

XBox Live gets some stinkers too (*cough*Daggerdale*cough*) but mostly only if there's a big publisher backing it. You're right, you have to hang out in the Indie channel to find the crap stuff (and that channel still scores some awesome titles like Sequence). This Summer of Arcade line-up only had one title I didn't want (Warped and American Nightmare were super fun demos, and I Am Alive has potential, but mixed reviews). MS has never been shy about snapping out the best talent (e.g. Bungie).
Do you not understand what "break even" means? It means your math sucks, they don't have any costs associated with the pirated copies. If those 50 cent copies cost the devs 1000 USD to get to you then they just lost 500 USD, not made 500.
How the hell are bandwidth and credit processing fees "hidden costs"? Are you 15?

One could ask you the same thing.

Not everyone rocks at economics. While it might come easy to you, I've never been particularly good at either economics or math, and subsequently, I need a little more explanation to understand things that you apparently assume that everyone just knows.

By the way, I never said they "made $500". I actually quite clearly said that "paying $0.5 for a game would still leave the devs with a loss".

You don't need a doctorate to know that there are machines and people at the other end of that website and that a website and server invariably costs money to run.

Ignoring the aforementioned credit processing fees and the fact that bandwidth costs money, one of the biggest problems that the industry is facing is that the "cost" of bandwidth is rising.

Contrary to some beliefs, bandwidth is not a limitless resource: ISPs for one can only handle so much traffic in a given area and they may choose to impose bandwidth caps, throttling or simply increase prices to manage this excess demand.

Because Netflix, Maxdome, Youtube, Steam, iTunes PSN et al. (Xbox Live less so because downloads tend to be smaller at present) all take up horrendous amounts of bandwidth, they are being charged more by their respective network and server providers to handle this traffic.

And servers themselves also cost money to run. The primary cost is actually the equipment itself, which have a ridiculously short service life given the throughput of data in these things. In second place is the electricity - everyone knows that energy prices are rising, and data centres consume rather large amounts of energy.

These are all problems that Google, Valve, Apple and Sony are facing in the long term, and the impact for Wolfire Games and Desura is all the more noticeable given the relatively small scale of their operations. If you pay $5 for a bundle of games, around 50 cents of that represent transaction fees, with an additional amount for bandwidth and a pro rata amount for energy.

It all adds up.

Yes, it does.

Look, there was plenty of stuff I didn't think of when I did my super-quick calculations, because I have no experience or knowledge of how the business runs. I am aware of the fact that I have no experience or knowledge of how the business runs - that's why I asked SimonG to clarify, because obviously he knows more about it than I do.

It's not that I don't know that these costs exist - it's just that it didn't strike me to include them in my calculations. Next time, I will, because I bothered to ask and was reminded that these costs need to be included, too.

Bandwidth being a commodity everyone has to pay something for, I'm curious how pirating doesn't financially decimate anyone putting 1-8 gig games out for the world at no cost. I just got Assassin's Creed on the Amazon DRM-free sale/"test" and am a bit worried at what the 6gig download is going to do to my monthly bill.

when it comes to credit processing fees I imagine it can work various ways, but from what I understand the company I work for is charged a flat rate per transaction. Early on we were encouraged to gang up orders from clients( who have many orders) so we would only get charged once, but the cost is negligible enough that we don't really worry about it even being a smallish, financially strapped company. The amounts I have heard going around were always between 2-10 cents per transaction. 5 probably being the most likely.