The Xbox Live Marketplace, PlayStation Network, and Wii Shop Channel may all be doing big business, but they have much to learn about selling their wares digitally. Dave Rudden details a few ground rules that all online distribution services would be wise to follow.

EDITOR’S NOTE: GamePro EVP of Content and Friday editorial-creator John Davison is taking a much-deserved vacation, so the other GamePro editors will be pinch-hitting this week and next. The timing was serendipitous, as News Editor Dave Rudden’s starting to tire of yelling his complaints about DLC to his HDTV and any nearby cats.

The console online marketplace manifesto

I’ve been a proponent of downloadable content ever since I downloaded Geometry Wars: Retro Evolved for $5 on my Xbox 360, and recently, I’ve invested even further into the virtual aisles of the Xbox Live Marketplace, PlayStation Network, and Wii Shop Channel. My video game collection had grown extremely unwieldy by the time I started at GamePro in December of 2006 thanks to a five-year long stint as a GameStop employee. Moving into my then-new apartment, I filled an entire walk-in closet with video games and DVDs. Inspired by a story I read by Kotaku’s Stephen Totilo on keeping a lean gaming collection, I spent an entire Sunday recently cutting my own library down to size, something I would have never had considered had it not been for the increased viability of the DLC market.

But as convenient and easy online purchases are, the process isn’t perfect; there are plenty of things providers can do right now to improve the experience for gamers. As we watch the midway point of the current console generation pass, here are some policies I hope each of the console giants will enact in the near future.

1- Put more power in the developer’s hands

Don’t even get me started on Nintendo. Have they lowered the price on any piece of downloadable content, ever?

Even as a die-hard Left 4 Dead fan, I felt slighted by the all-too-brief $7 Crash Course campaign, and slightly less so with the similarly-priced pack in Left 4 Dead 2, The Crossing. If I wasn’t such a rampant achievement whore, I could have saved $14 bucks and scored both for free via Steam. Valve has stated that their hands were tied when it came to pricing the content on the Xbox Live Marketplace, and while I wouldn’t place complete faith in those sentiments–Valve is the company behind the free-dealing Steam service, and they could have dished out both DLC packs to Xbox users for $5–the message still stands. If a company wants to change the price for their content, at any time, the big three should let them. Sony seemingly is, if the weekly price drops on the PlayStation Blog’s content updates are any indication. Microsoft seemingly isn’t, since the company makes a big to-do about the Xbox Live Arcade “Deals of the Week” and the meager output of Xbox Live Arcade Platinum hits. Don’t even get me started on Nintendo. Have they lowered the price on any piece of downloadable content, ever?

If all three of the console manufacturers ceded price choices to the developers, I’m confident that any worry of price-jacking seen when iPhone apps hit it big would be offset by checks and balances in the form of other developers stealing sales by dropping prices. Unfortunately, the current system is locking older downloadable content in at prices that people may just not be willing to pay anymore, and no garish new navigation system will fix that.

2- Don’t punish players for buying new hardware

Another habit from my GameStop days that I’ve been able to curtail has been the tendency to trade in and repurchase a current console when a cooler paint job has come in. I left my retail career with a clear green Halo Xbox, a Sega Sports black Dreamcast, the PSOne with the screen attached, and the retro styled Nintendo hand-held NES Game Boy Advance and Famicom Game Boy Micro. Thankfully, I hadn’t had a single piece of downloadable content on any of the aforementioned systems when I swapped them out, as performing the same feat on today’s hardware comes with a fair amount of headaches.

On the Xbox 360 and PlayStation 3, upgrading your systems to their slimmer counterparts won’t mean sacrificing any DLC, though you are due for a lengthy re-download process. Nintendo is once again the chief offender, as customers considering getting a larger DSi or flipping the Wii system’s color to the opposite side of the spectrum have been stymied, as the company has tied download purchases to systems instead of accounts. Even I have been bitten by this snake—my Club Nintendo prize of Doc Louis’ Punch-Out has been banished to limbo—as I foolishly assumed that bringing in the flash memory card that housed the my home console’s Virtual Console and WiiWare titles to download the game on one of the office’s systems would let me transfer it over without a hitch. While some upgrading customers have reported that Nintendo has been forthcoming in reimbursing Wii owners that needed to purchase a new console, the uncertainty of buying new systems is something that needs to be addressed by Nintendo sooner rather than later–”later” being when the 3DS releases and the hardcore early adopters have to consider repurchasing their DSiWare downloads.

And what of cross-platform downloadable games? I purchased dozens of Rock Band tracks on the PlayStation 3 years before Rock Band Network cemented the Xbox 360 as the destination for music DLC. Now that I’m strongly considering jumping ship, I’ll essentially be double-dipping on track purchases that I can’t recoup. What about the Xbox 360 owner who purchased Mega Man 9, Castlevania: Symphony of the Night, and Tecmo Bowl but sold his system for a PS3 because he wanted to start watching Blu-rays? Or the customer who make the opposite jump because most of his friends were on Xbox Live? I’m not sure if it’s ethical or possible for Sony or Microsoft to make the move easier, but if the developers had more control of their DLC and were able to verify a ship-jumper, why not make the continued support of their products as easy as possible?

3- Encourage repeat business

Here’s one that behooves both the console manufacturers and downloadable game developers. Microsoft is smartly encouraging Xbox Live Arcade-goers to make multiple purchases this summer, as purchasing a majority of the “Summer of Arcade” games will put $5 in Microsoft Points back into players’ accounts. Buying all five of the $15 dollar games will put $15 back in the customer’s Xbox-tethered pocket. This is a brilliant idea, which begs the question–why is this sort of repeat business only commended once a year? While the game still stands in my top five favorites of this console generation (download and retail), I remember being dismayed at the triple-dip committed by Namco Bandai when they released Pac-Man Championship Edition. Shouldn’t die-hard Pac-fans who bought the original arcade game and Ms. Pac-Man via Xbox Live Arcade be rewarded in some fashion by Namco Bandai or Microsoft for continuing to buy their wares? Purchasing sequels is much easier in the retail realm when trade-ins can eliminate buyer’s remorse, but the owners of the non-transferable precursors should be recognized in some way, shape or form when it comes time to pony up the dough for the sequel.

4- Stop making your full-game prices to appease retailers

Much like how major publishers will play ball with GameStop despite being cut out of used game profits, retailers should reciprocate by allowing fair pricing on online console marketplaces.

The red-headed stepchild in the world of console downloads, in the eyes of many, are the fully-featured retail-released games re-purposed as downloads. With hard drive sizes growing exponentially on the PlayStation 3 and Xbox 360, customers should be buying more games digitally, but we’re not hearing many gamers extol the virtues of skipping the discs. This is being done, in large part, to appease retailers by not undercutting their prices, but there should be a middle ground. Much like how major publishers will play ball with GameStop despite being cut out of used game profits, retailers should reciprocate by allowing fair pricing on online console marketplaces.

How’s this for a hastily-thought-up compromise: A player pulls up Gears of War 2 on his Xbox Marketplace Dashboard and sees a $25 price tag. Upon expressing an intent to purchase it, he’s given a reverse-upsell–if he’s willing to wait, Wal-Mart will ship him a $30 physical copy of the game that comes with a collector’s case and instruction manual, also saving him 8 gigs of hard drive space, and he can make the purchase through his console with Microsoft auto-filling the information. On the flip side, the customer can make the same decision at the store, allowing the retailer to serve as a middleman for the digital purchase and earning commission on inventory that they never had to stock.

Conclusion:

Granted, most of these resolutions would require major philosophical changes from some large and carefully-structured companies, but with the seismic shift from physical to digital media growing, the publishers must adapt too. The music industry failed to embrace Napster and Bittorent, and is now limping along in a much weaker state, grabbing onto the shoulder of iTunes for support. The oft-declining NPD numbers may just be a byproduct of a still-struggling economy, but publishers shouldn’t gamble with the gaming industry by ignoring its most dedicated customers–the ones whipping out a credit card from the couch to give them money immediately.

Dave Rudden is a News Editor for GamePro and is not regretting his recent decision to drastically cut his video game collection. He is, however, not fond of his recent haircut.