Well, my first reaction is “not if they don’t have to they won’t”, at least not all of them.

But I digress.

Personally, I think the whole argument will resolve itself. As people enable different business models, some of which involve the “software as service” approach you mention, people will be given more choices. And then consumers will vote with their dollars.

MMO’s, Half-Life2, and other examples are proof that a significant number of people are willing to pay for a quality experience even if their isn’t a “sell it off the back end” recoupment.

Check my vote in the ‘give consumers choice’ column, thank you!

While the cited examples for movies and music were useful, remember the relative size of the audience - games are still a niche market.

I was waiting for this one to pop up, thanks
I think there’s a lot more to it than this. Yes, games are niche to a point, but how much of this is due to the industry being inherently niche, and how much is due to the failiure of said industry to market itself properly?
More importantly, films, although they have very large budgets (I’m mainly referring to Hollywood films here) are different in a significant manner to games. Film publishers fund films, game publishers fund games. Film publishers, however, know their market inside out, and it’s very rare to see a Hollywood movie flop. I personally dislike a lot of the mainstream Hollywood stuff, but I can’t deny that it sells, lots. Game publishers, on the other hand, seem to have a pretty huge miss ratio, and make several flops while waiting for that one game that will make their quarterly review look great. End result? Money put into films is much more efficient, and, while it may not produce once-in-a-lifetime films every time, it will certainly produce profits reliably. Money put into games is a lot less efficient, and thus prices are forced up to make up for all the mistaken investments.

maybe game developers should sell games that deliver 1-3 hours of content for 1/4 to half the price?

The question here is: what counts as content? In a lot of first person shooters I often get the feeling that I *am* only experiencing a few hours worth of content, repeated time and time again to stretch the game experience out for ten times its actual inherent content. I know that this remark is unfair in some ways, I’ve worked on enough games to know all the effort that goes into them, and know that every level had to be hand-crafted, even if it is filled with the same old baddies I was fighting in the very first level. But that’s still the feeling I get in a lot of games, that the last three quarters are just the first one recycled…

While the cited examples for movies and music were useful, remember the relative size of the audience - games are still a niche market.

Given the revenues posted by the games industry for the last few years, how exactly is it niche? Perhaps the MMO genre is niche when compared to other game genres, but take a look at MSN Game Zone or Yahoo games or all of the other gaming spaces that attract a large segment of adults.

All of the flak about rentals and resale is just another symptom of an industry that is still very immature when compared to other entertainment industries. Because computers have come along and made copying so easy, people who own IP feel like they had better protect it even more. Given time, it will die down, just like the people who initially freaked out when the first photocopiers showed up in libraries.

One problem I do see with PC games as distinct from others like X-Box is that if you have signed up for a MMORPG online with a game box code and made a character, you’re stuck then having used up the code. You could sell your character or the right to delete him and make a new one, but game companies often frown on selling your account in this way, in particular because they don’t want the liability for you giving out your password.

Still, people keep selling these games at yard sales in RL and selling the stuff in them at virtual yard sales, and God bless them, they should be free.

While the cited examples for movies and music were useful, remember the relative size of the audience - games are still a niche market.

One thing that really aggrevates all of this is the self-fulfilling targeting of the “hardcore” gamer. By building games with a theoretical audience in the modest millions, game companies need to raise prices to cover their costs and risks… and of course they are paranoid about rentals as the wonderful “hardcore” audience is also poor and highly likely to pirate or rent a game.

Since a movie or an album sells one to three hours of entertainment for about 1/4 to half the price of a contemporary game, maybe game developers should sell games that deliver 1-3 hours of content for 1/4 to half the price? maybe less to reach a wider audience.

After all, the 20-40 hours of content model is from a time when there was more procedural content and custom content was cheap - text and 2D images.

fighting against game rentals is a waste of time

For the most part, I’m with you on this.

Content is too available to be worth much; what is worth selling is the relationship to the creator.

I know that you’re simplifying this just to make a point, but it’s fun to talk through anyway.

Agreed — the relationship with the creator is very important. Game developers are also selling a relationship with a franchise and a community… one that can outlast the developer (or the lead designer, or the brand representing the developer, etc). In fact, given enough time, the creator might very well prove to be irrelevant. Joys of user-generated content.