Column: Industry Trends

History of Video Game

Distribution
Michael Mattioli
Goldman Sachs & Co.

Abstract—Video games were originally distributed through fixed-function appliances or

gaming consoles. As technology improved, various forms of physical media were used to
distribute games, such as cartridges and discs. While this provided versatility, it also
carried physical design considerations and complexities surrounding backward-
compatibility. Today, digital distribution is growing rapidly and beginning to overtake
physical media. Cloud gaming is disrupting distribution even further by eliminating local
storage, compute, and rendering and shifting all of those tasks to cloud compute
resources.

& SOME OF THE earliest video game consoles,
such as the Magnavox Odyssey shown in
Figure 1, functioned as dedicated systems or
appliances, which could only support a single or
fixed number of games.
Games were designed and implemented using
a variety of integrated circuits (ICs), which were
arranged on a custom printed circuit board
(PCB). For example, Atari’s Pong, designed by Al
Alcorn, was implemented entirely in hardware
using ICs, which were originally designed for use
in televisions—not a single line of program code
was used2. Conscious of the cost of the overall
system, game designers were limited by what
Digital Object Identifier 10.1109/MCE.2020.3032778
Date of publication 21 October 2020; date of current version
2 February 2021.
could be done with ICs which were readily avail-
able at the time.
As semiconductor manufacturing processes
improved and consoles used more general-purpose
hardware such as random-access memory (RAM),
central processing units (CPUs), and graphical
processing units (GPUs), consoles moved to read-
only memory (ROM) cartridges. Consumers were
now able to purchase new games that could be
played on the same (existing) console by simply
removing and inserting the cartridge containing the
game they wished to play. The Fairchild Channel F
was one of the first consoles to feature a ROM car-
tridge; an example of such can be seen in Figure 2.
ROM cartridges were typically proprietary in
design and implementation; in other words, they
were designed to be used solely with one spe-
cific console. However, there are instances of
consoles maintaining backward-compatibility

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 Industry Trends
Figure 1. Magnavox Odyssey video game console1.
with ROM cartridges from previous generations
of consoles. One notable example is the Nin-
tendo GameBoy Player, as shown in Figure 3.
The Nintendo GameBoy Player was an acces-
sory that consumers could purchase and attach to
their Nintendo GameCube console thereby allow-
ing them to play games from previous generations
of consoles (Nintendo GameBoy, Nintendo Game-
Boy Color, and Nintendo GameBoy Advance).
As the size of game data increased (e.g., tex-
tures, sprites, audio, etc.), so did the need for
physical media, which could hold more informa-
tion. This led to the adoption of optical media
Figure 2. ROM cartridge for a Fairchild Channel F
featuring exposed contacts from the internal PCB;
when inserted into the console, the exposed pins
would be used to read the contents of the ROM to
load the game data3.
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Figure 3. Nintendo GameBoy Player would attach
to the bottom of the Nintendo GameCube and game
cartridges would be inserted into the front of the
accessory4.
such as CD-ROM, DVD-ROM, and Blu-ray. While
the physical media conformed to standards, the
content was typically protected by digital rights
management tools to prevent unauthorized redis-
tribution. Some consoles used proprietary optical
media, which not only made it more difficult to
copy or redistribute the content but also helped
with the physical design and form-factor of the
consoles. For example, the Nintendo GameCube
used Nintendo optical disc and the Sony PlaySta-
tion Portable (PSP) used Universal Media Disc
(UMD); a UMD can be seen in Figure 4. Traditional
optical media was far too large for either of these
consoles.
As Internet bandwidth and availability became
more prevalent in the world, digital distribution—
means by which users would download digital
copies of the game directly to internal or external
storage media connected to the console—gave
rise. Rather than travel to a physical store, con-
sumers were now able to press a few buttons and
the game(s) of their choice would begin to down-
load instantly. Inventory issues in physical stores
were no longer as much of a concern. One of the
earliest digital game distribution services was
GameLine built for the Atari 2600. Consumers
were able to install a proprietary modem and
local storage cartridge into the console and use a
IEEE Consumer Electronics Magazine
Figure 4. UMD developed by Sony for use in the
PSP5.
telephone line to download games. Another nota-
ble early digital game distribution service was
PlayCable built for the Intellivision.6 Consumers
were able to use a proprietary adapter to down-
load games using existing cable television (CATV)
signals. Modern consoles, such as the Nintendo
Switch, can download games from the Nintendo
eShop, Nintendo’s online game marketplace, and
save the game data either to the device’s internal
storage or to external storage (in the case of the
Nintendo Switch, using microSD cards).
Today, modern consoles use the Internet to
download not only digital games but also system
updates (for the consoles themselves) and game
patches (to fix bugs or add content). As more
and more content was distributed and con-
sumed digitally, the need for large-capacity local
nonvolatile storage grew significantly. Consoles,
such as the Microsoft Xbox One and Sony Play-
Station 4, were designed and sold with internal
nonvolatile storage capacity as large as 1 TB. As
the data required for modern games grew even
further (to support higher resolutions, spatial
audio, etc.), loading times, the time during which
the console would read the contents of the game
data from the local storage device, increased.
Longer loading times decreased the overall user
experience because, quite simply, consumers
had to wait longer periods of time to continue
playing. At the time, electromechanical storage
devices, such as hard disk drives (HDDs),
were shipped with consoles because they
were relatively inexpensive. However, they were
drastically slower in comparison to solid-state
storage devices (SSDs). Now, SSDs are much
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Figure 5. Seagate Expandable Storage Card used
to increase the capacity of local storage on the Xbox
Series X9.
more mainstream and far less expensive than in
years past; upcoming consoles such as Micro-
soft’s Xbox Series S and X as well as Sony’s Play-
Station 5 will ship solid-state storage, which uses
NVM Express (NVMe).7 The Xbox Series X is capa-
ble of reading data from its internal storage at 2.4
GB/s and the PlayStation 5 is capable of reading
data from its internal storage at 5.5 GB/s. Micro-
soft has gone one step further and partnered
with Seagate to design external storage media,8
shown in Figure 5, which can be inserted into the
console to expand its local storage by an addi-
tional 1TB and maintain its advertised data read
speeds.
For comparison, the previous generations of
consoles, which used SATA III and shipped with
HDDs, had an average read speed of 100 MB/s;
some consumers replaced the internal HDDs of
their consoles with SSDs but were still limited by
the SATA III bus, which had a theoretical maxi-
mum read speed of 600 MB/s.
Games played on personal computers (PCs)
followed a similar path. Distribution began with
media such as audio cassettes or floppy disks
and then transitioned to optical media. The
Apple II, shown in Figure 6, and TRS-80 are exam-
ples of early PCs, which used audio cassettes as
physical media.
Today, PC games are distributed largely through
online game marketplaces, such as Valve’s Steam
and Electronics Arts’ Origin. As with consoles, these
games are downloaded and stored using local inter-
nal or external storage devices.
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 Industry Trends
Figure 6. Apple II PC system with game paddles
and a RQ-309DS cassette deck10.
As adoption of digital distribution continues
to grow, distribution through optical media
begins to fade. While optical drives are still man-
ufactured, PCs available for purchase today,
whether they be desktops or notebooks, rarely
feature optical drives. Some of the newer gaming
consoles, such as the Microsoft Xbox Series S
and the “digital” version of the Sony PlayStation
5 have omitted the optical drive entirely.
Cloud gaming has also changed the landscape
of game distribution. Rather than download and
install games to local storage media and render
and process them on the console, the games are
stored, rendered, and processed entirely in the
cloud.11 The main processing functions of the
console are effectively moved to the cloud. Ren-
dered frames are simply streamed to the consum-
er’s device and presented on the display (e.g.,
television). All controller input, along with haptic
feedback, is also sent and received by the local
device to and from the cloud where the game is
rendered and processed. This method of distri-
bution simplifies the process of accessing a
game, which can improve a consumer’s overall
experience with cloud gaming platforms. How-
ever, modern cloud gaming architectures suffer
from high input latency due to the controller
input being sent over the internet to the cloud for
processing (as opposed to being sent directly to
the local console for processing). While this
higher input latency can lead to a diminished
user experience,12 various solutions are being
developed to decrease input latency.13
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The 2020 COVID-19 pandemic has accelerated
the adoption of digital video game distribution.
During the pandemic, all businesses deemed
“nonessential” by local governments were forced
to close their physical stores; many of these
included retailers that sold physical copies of
games. Consumers had the choice of either order-
ing a physical game and waiting for it to be
shipped and delivered or download the game and
wait a comparatively shorter time to play. In
August 2020, Sony reported that it had sold a
total of 91 million games from April 2020 through
June 2020.14 Of those 91 million games, 67.3 mil-
lion (74%) were sold digitally. Sony also reported
that digital games sales had increased 154% year
over year.
Interestingly, some of the earlier consoles,
such as Pong, while remarkably simple were also
extremely fast. Pong did not require loading
screens, downloads, or rendering; you simply
turned it on and were able to play immediately. As
the complexity and capability of gaming consoles
improved dramatically over time, only now are we
able to return to near-instant play time. All it took
was bleeding-edge storage architectures and
leveraging cloud computing to get there.
& REFERENCES
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IEEE Consumer Electronics Magazine
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ea-activision-2k-games
Michael Mattioli leads the Hardware Engineering
team within Goldman Sachs. He is responsible for
the design and engineering of the firm’s digital expe-
riences and technologies. He is also responsible for
the overall strategy and execution of hardware inno-
vation both within the firm and within the broader
technology industry. Contact him at michael.mattio-
li@gs.com.
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