Computer games shouldn't come in boxes.

Last Friday, HMV launched a new games-selling service. The focus of news reports is that used games can be traded in for DVDs, CDs and other merchandise- so presumably, they will also be selling used games through HMV retail stores.

This is huge news for the computer games industry; second hand games have been around for ages, available through the likes of eBay and Amazon, and taking up more and more shelf space in specialist retail stores like Game, as well as specialist independent games stores. But this move takes them out of the specialists and puts them firmly in the mainstream; with about 380 stores, HMV has a presence not only on pretty much every high street (not including Waterstones, which they also own), but is also somewhere that shoppers who might be less likely to wander into a specialist computer game shop will buy games.

Some have commented that second hand games are worse than piracy; because they offer a legal outlet to purchase games that don't make any revenue for the publishers or developers, they have a parasitic relationship with the games industry. A game that publishers sell once can then be re-sold (maybe more than once), making additional revenue for the retailers but nothing for the developers.

In an interesting twist, the PC games market (which is having huge problems with piracy) probably won't suffer from this development as much; the ongoing issue of increasingly draconian copy protection on the PC means that it's likely that games installed and registered on one PC will have problems when being installed and activated on a second PC. (There is also the problem that games could be bought, copied and then returned for the PC- something that copy protection systems on consoles are much better at protecting against.)

The recent release of "Spore" brought the copy protection issue to the attention of the industry press; widely criticised for a level of protection that causes problems for those who have bought it legally which is removed for people downloading cracked pirated copies, and was seen as actually encouraging, rather than stopping piracy. (An article on Slyck.com goes into how it's topped the charts at the various torrent sites.)

Boxed games on the PC are also a hassle for the gamer; you can launch most games from the PC programs menu, but you usually have to have the disc in the drive to actually run it. With the price of hard drives constantly dropping, this is looking increasingly pointless from a gamers perspective- especially as the PC itself is moving away from a desktop box that's fixed to a desk and towards being a portable, wireless laptop device. We're used to carrying our music collection around in our pockets on our MP3 player- who wants to carry around a box of discs as well as their laptop (and power supply)?

Another legal way for gamers to avoiding paying full price for games is the rental market; Blockbuster has been offering console games for rental on the high street for a number of years now, and online DVD rental services like Lovefilm are now including games rentals in their catalogues (again, only for console games.) This is another alternative which is highly likely to cut into publishers profits as potential sales are lost.

Second hand and rented games are two issues that the games publishing industry will need to deal with if they want to stay profitable. One possible approach would be to increase the prices of games to ensure that they can still make a decent profit from games that could be resold a number of times without them making money. Obviously, this would be a risky approach, where games are already seen as being expensive, and could lead to a further drive away from buying boxed games.

Another approach would be to ensure that games have longer lifespans in the design and development process; so gamers will play games for longer before re-selling, for blockbuster AAA releases like Grand Theft Auto 4, for example, where gamers will be less likely to wait around before getting their hands on the games.

But the internet seems to me to offer the best solutions for both gamers and for publishers; an online component to games could serve two functions; firstly, a game that's downloaded rather than boxed and sold in a retail outlet is much more difficult to sell on as a second hand product. (It does raise some interesting legal questions about whether it should be allowed to sell a second hand product, and whether publishers would have the right to put technological barriers in place to stop this.)

But another more interesting approach would be to make the online component a fundamental part of the game; either via online play, or relying on regularly updated content over the internet. For example, a game could be free to install (either as a free download or coming on a free CD/DVD), with limited functionlity- essentially, a demo of the full experience. But the online component could be a paid-for experience; turning the cost of the game from a large, one-off fee into a subscription-based series of smaller payments.

The likes of Battlefield games, where the single player version is a pale shadow of the online, multiplayer battles could well provide a clue as to what this could look like, where the ongoing cost of playing is either micropayments or money coming from advertising (indeed, EA is apparently moving the game in this direction with "Battlefield Heroes".) Another alternative is the World of Warcraft type of massive multiplayer role playing games, where a monthly subscription is paid to continue playing the game.

Personally, I prefer the idea of making the storytelling a more integral part of the game. The internet is definitely a part of the mainstream now, and the explosion of broadband has made Internet TV a real possibility. The idea of adding an interactive element to TV shows through clickable videos really appeals to me- the kind of thing that could be done with a TV programme like Lost (where fans will go online or listen to podcasts to find out more about the backstory or clues as to where the overarching storyline is heading) is something that I think could lead to an entirely new genre of "video" to sit alongside film and TV.

The potential that computer games have to develop along these lines, with more involvement, more freedom and more social interaction, is something that could be really exciting. The big question is whether games publishers will be keen to explore these areas— no doubt making some potentially costly mistakes along the way— or will instead focus their efforts on protecting the business model of boxed computer games sold on the high street.

We've already seen what the music industry has done, and so far the results have on the whole been pretty ugly and uninspiring. The TV and Film industries seem to be at a crossroads, and it's not clear whether their future will be downloaded content or physical media like DVD and Blu-Ray but the actual content, from a creative/artistic perspective, seems to be staying essentially the same.

So can games publishers do any better? I hope so.