So you say the only source of revenue for video games is the sale of the game itself.

I would like to introduce you to some friends of mine. Their names, in order of how wrong they show you to be are;

Farmville (advertising)

World of Warcraft (subscriptions)

Almost any PC, PS3 or 360 game in existance (map packs etc)

Second Life (microtransactions)

no one here is arguing revenues for game companies.... or how anyone makes money.

And no not "almost any" PC or Console game makes money off DLC. That is completely BS. There are more games that do not have DLC of any kind that has made a profit versus games that have DLC and made profit.

And yes web games like farmville gain their profits from advertising, but all the money funds their games and company versus Apple or Google which get and use profits from advertising from things other things like Apps that change your background to a porn site someone pulled up on google's search engine to YouTube, developing their web browsers, to building servers, to hundreds of other things.

People that play single player games (or local multiplayer ones) is used to play them without needing an internet connection. Places without high speed connections available are still a lot, and also, almost nobody subscribes to them anyway in their holiday houses, where they stay a small part of the year, even where the connection would be available, and not flat fee subscriptions anyway. Playing through a pay per use connection can quickly become horribly expensive and totally inadmissible just to play. Unless every gamer become filthy reach... Eureka! This is the solution to piracy, the whole humanity must become rich, how could I not think about it before?

With the advent of highspeed smartphones this is quickly not becoming an issue anymore...

It's estimated that by 2013 close to 2 billion people in the world will have smart phones and use those more often than their PC to connect to the web.

So you won't need a wired connection anymore to connect to the net...

PS : and don't start arguing that you don't bring your phone to your vacations spot.....

PS2 : so you're arguing that people that can afford a holyday house can not afford an internet connection by the way ?

Good job there !!! Let me let you on a little secret, if you own a summer house, you are already rich...

I don't think I've ever seen a journalist post something so horrible in my life. I don't even know where to start.

Frist, let me get the disclaimer out of the way: I have, many years ago, pirated games before. I was a stupid kid, and didn't care. I don't do that anymore, but I was not the devil incarnate like Sterling and twesterm believe. I certainly wasn't trying to harm the industry in any way. I was just young and silly and broke, and couldn't afford many games any way. In my adulthood I legally bought all of the handful of games I pirated as a child, generally on Steam. I'm not defending piracy as a practice at all. It's a bad thing, you shouldn't do it. I'm saying pirates aren't little demon's trying to destroy the industry. Maybe Jim Sterling is, though. 

I'm going to havve to break this into parts, because this rant might be explosively long and I don't want to miss any of the stupid opinions in this article, much less the factually incorrect bits. 

First of all, in his opening paragraph he points out that both Crysis and Killzone 3 were leaked onto the internet recently. Does he ever bring up Killzone 3 again? Nope. Or the presence of piracy on consoles and handhelds? Nope. Well let's look at that. Sony claims the PSP's abysmal sales are almost entirely due to piracy. Do I believe this? No, but I do know certain games have been pirated more than even the biggest of PC games. For example, Dissidia was pirated more than 5 million times... in Japan alone. Even Starcraft 2 wasn't pirated that much. Did that stop Dissidia from being profitable? Absolutely not. Similarly, the R4 on the DS is the simplest piracy tool ever made. No system hacks, no firmware hacks or rewrites, people can literally drop a rom onto a microSD and pop it the device straight into their DS, and with it games have been pirated hundreds of millions of times over the gerenation. And now we have Killzone 3 leaked and PS3's being cracked everywhere for the purpose of piracy. Why are PC gamers being singled out in this ridiculous attack again?

Now he goes on to examine how "cutthroat" the game industry is, and how if you aren't selling multi-millions, you don't make money. Wait, what? We're blaming PC, by far the cheapest HD development option, for the high barriers of entry now? Do you people have any idea what's been going on this generation? EA has lost billions of dollars, fired 1,500 people (more than the entire staff of Eidos). Speaking of Eidos, they would have been completely bankrupt if it weren't for SE buying them out. 2K has only ever made money two years (GTAIV and RDR) the entire generation and even then it wasn't much. Activision even lost money last year, and they're practically printing money with Call of Duty. The last two years EA has lost more than $1 billion. Ubisoft is barely scraping by breaking even, and only because of Assassin's Creed and their casual games like Just Dance. 

Those are by far console focused Western developers. The Japanese tend to do better, because they aren't functionally retarded. Okay, a little harsh, but seriously, what the hell is wrong with this side of the world that we can't budget our games for reasonable sales expectations? It's become exactly like the movie industry. The only people who can afford to make games are those who can afford to lose millions of dollars on them! With this, dozens of publishers have closed, thousands of developers are out of work, and the industry has shrunk signifficantly in the number of people making games. All of this is completely due to console development. So how about this devlish PC, with these stupid PC gamers that these ever so brilliant dying publishers are ignoring?

Valve just announced that they make more money per employee than Google or Apple. Judgingn by Forbes estimates of their profits, it's a lot more. Forbes estimates Steam made $1-$2 BILLION for Valve last year. That's just Valve's profits on the service alone. They take a 30% cut on every game sold, and people pay them for advertising on the front page. Just those factors, and the games they themselves have sold, have caused them to make $1-$2 billion, while EA lost $750 million. EA, the publisher who is actively avoiding Steam. Who refused to put Dragon Age II on it in time for the Signature Edition sale. The Sims bombed on consoles, but sold 4.6 million copies on PC. It was one of EA's only profitable pieces of software in 2009, a year in which they only lost $350 million. How about Blizzard? They sold over 4.5 million copies of Starcraft 2. World of Warcraft is the most profitable piece of entertainment in the history of mankind. 

But that's just big guys. Let's talk about the kind of environment, and potential profits available for the little ones. Jim Sterling, in his infinite wisdom, decided to use World of Goo as an example of the doom of PC. World of Goo made more than 50% of its money, by 2009, on the 2D Boy Website, and Steam (thanks to a Steam sale). About 30% of their total money was WiiWare, which is a pretty solid cut. Then they did the Humble Indie Bundle, which alone made $1.3 million. about 1/4 of which went to 2D Boy. In the end they made the vast majority of their profits on PC, and PC is where it's still selling. 2D Boy themselves are staunch defenders of PC, and Steam, and very vocal against the effectiveness of DRM and the silliness of blaming piracy for the inability to make profit. Or how about Outerlight, a small indie developer who made a clever game, only to have their company destroyed by Ubisoft and their ideas stolen for AC:B source. Outerlight wished they had just ignored publishers, and worked with Steam alone, which brings me to my real point:

You want to know what's destroying this industry? It's publishers. It's EA, Activision, 2K, and Ubisoft. It is the companies who strived so hard to set up gaming into an oligarchy, where only the rich and powerful survive and the indie developer has no chance. You want to know why they hate PC? Because it's where the indie games thrive. It's where Magicka can sell 30,000 copies in one day on Steam and makes a profit, and sells 200,000 copies in 2 weeks and already funds the little guys' next 3 games. It's where Super Meat Boy can double its sales on all consoles combined. It's where Minecraft, made by one man, can make more money than Mass Effect 2 and its tens of millions of dollars in budget. It's where those huge publishers, those massive companies who want gaming to be like the movie industry, have no control. It is the great equalizer. The place where they have to compete with the little guys. Where they have to sell on a platform (Steam) which is supportive of those little guys. It's the place where they can't turn the gaming industry into the movie industry, ruled by the strong and impossible for the weak to enter.   

You want to blame piracy for the lack of publisher support on PC? Ridiculous. Blame fear. Fear that the horrible business models that those giant publishers created under the assumption that they could shut out the little guys forever, are now causing their impending doom. PC is an open platform. It's a platform that supports creativity, and quality, and small budget games better than anywhere else in the industry. Where people can make money without getting a publisher at all. So don't give me this crap. Don't tell me PC is inconsequential. Steam is the largest digitial distribution software service in the world. PC is stronger than ever, and far more profitable than consoles now. Piracy is bad. But this article is a crime in itself. 

Unless life become even more expensive, small holiday houses in not luxury places are at middle classes reach. And people that had to save money to buy them and/or renovate them are just the kind of people that won't pay flat fees for phone where they stay a month per year when they are lucky. But yes, cellphones will eventually solve also data connection problems, IF telcos become less greedy. Another problem is that that 2013 estimate is about people connected, but you can bet telcos will keep on investing very little to connect least densely populated areas, so we'll still have slower connections there, if any. And a further problem is Occam's razor, for single player and local multiplayer it will still be a solution more complex than others. Then there is the other problem: people won't pay subscriptions for single player, so, even if the cost for servers will drop, it will still be a huge cost in the long term that will have to be fully funded by the first and only payment for the licence, unless the business model switches to subscription also for single player, but it remains to be seen whether gaamers would accept it, particularly if other competing companies will stick to models more advantageous and less costly on the long run for the buyer (and also on the short term if fees will be too high). And another problem: leaner companies, outsiders, indies, or even big but still nimble companies that don't just follow the herd but try to emerge from it or even guide it, that manage to profit even accepting a piracy rate higher than on consoles, don't stop to wait for bigger companies to catch up, and each time the latter overlook the PC market and leave some room available, they quickly fill it. The OP's linked article rant is actually giving voice to bigger and less nimble companies' fear, rage and hatred, as they are mad to discover that the PC market isn't dead as they believed and every share of it they gave up is lost forever.

67% of americans own their house.

6% own a second house.

That's not middle class, sorry......

I'd like to know where those numbers come from...I don't believe 67% of Americans no longer make mortgage payments on their house.