In this article for Forbeshe not only discusses why Amazon’s opaque DRM standards are eventually going to be the device’s biggest hurdle, but also the subtle, but important differences that have made the iPhone work even though it’s a locked down device.

Amazon’s Kindle file format doesn’t provide support for tables or for so-called monospaced fonts, two formatting features that we use heavily in our line of technical books. And there is a viable alternative: Epub, the open format from the International Digital Publishing Forum, is based on the Web’s native format, HTML, and provides full table and font support. This is the first “strategy tax” paid by those who embrace proprietary platforms: They can’t support the needs of every niche and must prioritize their support for mainstream needs.

The single point of purchase was also a non-starter for us, since my fundamental understanding of information marketplaces is that they grow bigger and more lucrative for everyone when there is a rich ecosystem of cooperating players.

If you’re interested in understanding why open standards work for business and growth, it’s worth a read.

That’s clearly an issue for publishers and developers since games aren’t a tiered business like movies, so there is no point in the business that they can be guaranteed a sale, unlike movies.

That said, it’s hard to deny that some of this is the publishers fault. At $60 AAA retail games are probably overpriced compared to actual perceived value, so consumers are going to look for ways to bring down the cost to a level that’s more in line with their expectations.

It’s clear that first-user-free content, such as the extra maps that were provided with Gears of War, are a good way to get your fans to buy your product new. It also creates a sense of value for your content.

But I have to wonder if it wouldn’t make sense to simply decrease the cost of the product at retail and add some of the features a la carte as DLC. Sure, they’d still lose some sales to used copies, but more consumers might also pick up the product at retail. It also means that you might see games appearing in more places than just GameStop, Big Box, and online stores.

Microsoft did end up releasing those Gears of Wars maps as a separate purchasable download. I’m curious how that did for them.

Ultimately DLC helps turning your product from a single event to an ongoing platform that can has some legs beyond the initial sale. And as the flexibility of the type and pricing of downloadable content grows, you can also bundle together that content at a later date for a lower price.

And one day you might even have a tiered business…