THQ: Future consoles will drop discs for cloud gaming

For his keynote presentation at Cloud Gaming USA in San Jose, THQ CEO Brian Farrell spoke of the various opportunities that come with gaming in the cloud and what that could mean for THQ.

He predicts that future consoles won't have disc drives, hypothesising that this "will result in a lower cost for the hardware manufacturer, which will result in a lower cost to consumers and therefore a lower entry point, thus driving more mass market adoption."

Furthermore, this would save money for game developers and publishers since there'd be "no physical goods cost for game makers. No inventory, no markdowns, and all the money spent by the consumer would go to the developer or publisher."

Farrell also thinks cloud gaming will help build a stronger relationship with the community by delivering more custom tailored content. "Our games are always on and our players are always connected....We have the opportunity to interact with players in new ways that can be reactive to their desires, play habits, and buying habits."

"The box, ship and done model is transitioning to: observe, measure, and modify," he added, explaining this as "a games as a service model where direct consumer feedback allows the ability to operate in this always on, always connected environment."

This will put lots of emphasis on post-launch content. "We intend to create an online digital ecosystem with the consumer that keeps them interested for almost a year, perhaps even longer. And we expect most of our large console games going forward will extend the base experience with DLC packs. Things like online in-game storage, and consumables and other online items that will go on for at least a year post-release."

THQ's upcoming Saints Row: The Third will have more than 40 weeks of DLC, Farrell revealed, "which will grow and change the experience as the consumer engages with the game."

This focus on adaptation will open up lots of potential new business models. Farrell expressed lots of interest in the "freemium model" as well as subscriptions and episodic content. "Frankly we think the business model will vary based on the type of content being offered," though admitted it was too early to tell what these dominant models will be.

"We're starting to see a world where players can pay different amounts based on preferences with casual players paying a small amount, and more hardcore or passionate players investing more into their experience."

Farrell expressed THQ's willingness to experiment with new pricing models, citing MX vs ATV Alive as an example. Rather than selling a $59.99 game, THQ opted to sell the game for $39.99 with lots of optional content. "But what we found was unlike free to play, $39.99 just wasn't low enough to drive a big enough install base to push the level of DLC we had initially hoped for."

Not being tied to specific console opens up new possibilities for consumers as well. Farrell discussed the idea of playing variations of a game on multiple platforms. "You might primarily play a game on your PC, yet play subgames on your phone then share stats and improve your progress in the main game."

"Technology alone will not give a clear benefit to the consumer," Farrell cautions. "Cloud computing and data storage could potentially do a lot, but it's what we do with it as game designers and publishers that really matters most."