Last week, I wrote about the unsustainable cost of traditional videogames: Too many of them cost too much to make, don't make enough money back and leave consumers feeling as if they have paid too much for them.

Nowhere in that column did I suggest that there was a simple solution to this dilemma. Ask anyone in the game industry and they would probably tell you that their hands are largely tied, that external forces prevent them from simply lowering prices.

Our hands are tied, say the publishers: We can't publish our games without paying large fees to the hardware makers and playing by their rules, and retailers won't stock our products if we don't work with them.

Doug Bierend

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Our hands are tied, say the hardware makers: Profit margins on hardware are razor-thin, so we have to make money on software to produce cutting-edge gaming machines.

Our hands are tied, say the retail stores: Profit margins on game products are so low across the board that we wouldn't be able to keep the doors open without buying and selling used games.

You know what? I believe them all. I believe that this is one fine mess they've gotten themselves into. I believe that the three of them are Mr. White, Eddie and Joe, up there in the classic Mexican standoff.

And at this point I don't think it is going to matter much to game developers or game players if they all go right ahead and shoot each other.

It wasn't that long ago that these three entities were absolutely essential to gaming. Hardware makers had to produce low-cost, gaming-specific machines. Publishers had to produce and sell the games into retail. Retailers needed to buy games in bulk and be the point of sale for consumers.

Today, all three do things that make videogames a better experience. Hardware makers produce consoles, controllers and interfaces that prioritize gaming over any other function. Publishers assume the risk, bankrolling the projects. Retailers get games in front of consumers and push them to buy – and one might argue that they stimulate sales of new games with their trade-in programs.

But something critical has changed. While publishers, retailers and hardware makers might still be adding value, they are no longer required. Using the miracle of the internet, game creators can make videogames – good ones! – and sell them to game players without any involvement from traditional publishers, retailers or hardware makers. And when creators don't have to put their work through the gauntlet of middlemen, with everybody down the line taking their cut of the profits, they can sell those games much more cheaply.

That's what I mean when I say that games cost too much. Yes, as some have pointed out, game prices have come down considerably since the days of ROM cartridges, when Final Fantasy III on Super Nintendo cost $80 in 1994 money ($125 today). The difference is that you didn't have a choice then. Today there are abundant, cheaper, low-cost alternatives; Steam and iOS have disrupted the market.

Ben Kuchera wrote this week at Penny Arcade about how Steam, the digital game shop for PCs, is fundamentally transforming the way developers think about buying and selling games. "If you launch a game at $20, and the price goes down to $5," he writes, "you need to sell four times as many games to make the same money, right? Surprisingly, developers see sales an order of magnitude higher than they expected after severely cutting the price of the game after launch. They don’t just sell four times as many games, they may sell 20 times as many, or more."

Cut out the publisher, cut out the retailer, cut out the hardware maker, make five times the cash.

"The power is going to ultimately shift from the publisher to the developer."The New York Times wrote on Sunday about the ongoing battle between traditional book publishers and Amazon, which has similarly been accused of "devaluing" books by aggressively lowering prices for e-books. There's one token quote from an actual author of books, whose sole concern is that he lost half his book revenue when his publisher angrily yanked its wares from Kindle.

Wedbush analyst Michael Pachter spoke at this year's DICE summit about the many ways that the traditional game publishing model is broken, speculating that we'd see lots more publishers like THQ struggling to hang on versus new companies entering the ever more expensive and risky game of publishing.

"The power is going to ultimately shift from the publisher to the developer," Pachter said. "Bungie, Respawn, Insomniac, they aren't starving.... We need studios that have had so much success they can call their own shots."

It wasn't that long ago that publishers were the only entities that were in any position to give money to developers. Now a developer can go straight to the audience for cash, whether that's by selling games directly on the App Store or Steam, or through Kickstarter, or through a freemium model.

And of course game retailers' days are numbered: Been in a Tower Records lately? Virgin Megastore? I used to shop in Strawberries and Sam Goody, both of which are now FYE, of which there are a measly 440 stores nationwide. Games, like music, are going digital fast, and I can't come up with a way you can run a game store when there aren't any games to sell. GameStop knows it; there's a reason why it acquired the browser game portal Kongregate and the digital distribution service Impulse.

Even if publishers and retailers are on the way out, surely someone needs to make the hardware games are played on? Of course, but Apple is no more a traditional gaming hardware maker than Dell is. Both companies simply produce general-purpose computing hardware that happens to work well for playing games, and (critically) allow software makers to try almost anything they want to create good software and innovate with distribution methods and pricing. As generalized hardware becomes more adept, specialized hardware becomes less necessary.

I think the big three hardware makers actually understand this. It's why Microsoft is so concerned with making Xbox Live a unique, interesting service. It's why Nintendo won't make iPhone games: It realizes that as soon as hardware or software becomes commoditized, it can no longer compete. Ideally, Nintendo does not want to be a hardware maker or a publisher or a developer; it wants to offer all-in-one entertainment solutions in which each part is inseparable from the others. That is why it will put completely insane things like Virtual Boy on the market, because it has to consistently be offering something radically different if it wants to continue to exist.

Right now, the uneasy alliance of publishers, hardware makers and retailers is the only way we can experience big-budget premium games that are so massive that they have to ship on dual-layer Blu-ray discs. It's true. But it's not as if these companies are the keepers of some secret knowledge. They are not magic chocolate factories. Other developers can do what they do, if they can get enough money.

And while traditional publishers are still trying to make the old model work, pressing games onto discs and selling them for $60 plus extra DLC, it's the developers and associated businesses that aren't wedded to the old ways that will start to run circles around them. Because eventually they'll start making games that look just as good – and they'll know all the tricks to selling them through digital stores like Steam. They'll innately understand the new way of doing business, not be married to the old one.

Game publishers, retailers and game-specific hardware makers won't disappear overnight. Maybe they never will, because it's entirely possible that they'll refocus their energies on staying relevant in a new age.

But the ones that dig in their heels and blame everyone else — blame retailers for selling used games, blame publishers for not taking enough risks, blame hardware makers for holding the reins too tight, and most ridiculously blame consumers for not "valuing" their games enough – they are the ones in trouble.

Fire away, gentlemen. We need developers to make games. We need players to play them. Everything in between is negotiable.

Photo: Reservoir Dogs

Opinion Editor: John C. Abell @johncabell