Complete digital transition 'some way off'

Total online distribution of games still years away, agree industry execs - but inevitable

In the latest video feature from Scott Steinberg - The Future of Digital Distribution - industry executives have addressed the topic of digital distribution, with solid consensus that while a complete transition away from boxed product is some way off, the total transformation is inevitable in time.

"I think the [videogame] business was always moving towards a services business, and so I think that getting rid of the physical media was just a natural step," said Atari founder Nolan Bushnell, as the rate of change in the games environment gathers pace.

And Chris Petrovic, GM of digital ventures at US-based retail chain GameStop admitted: "What you're doing is avoiding the necessity of going to the store to buy something, but still having to experience the pain point of waiting however many hours or minutes or days that it takes to download that piece of content.

"I think the convenience is outweighed by some user experience hurdles that we still have to get through, but we're pretty convinced that with technology continuing to advance that this will only get better."

In terms of timescale, only Wedbush Morgan senior analyst Michael Pachter was willing to put a solid number on the deadline for a complete transition.

"Digital distribution will become the norm and completely replace package products in about 20 years, maybe 25," he said. "22 per cent of all households in the US don't have cable or satellite, so if they don't have cable or satellite they probably don't have high-speed internet - and they're probably not about to download all their games."

And Graham Hopper, executive VP and GM at Disney Interactive Studios, broadly agreed: "Digital distribution is very much in the early days right now.

"I think we're at a point where all the threads are in place, and we will soon get to the point where there will be a tipping point where a lot more people will be comfortable with it, you'll see more types of content being made available digitally, and it'll become a bigger and more important part of the business."

The full video of The Future of Digital Distribution is available on now.

Latest comments (6)

Craig Burkey Software Engineer 8 years ago
You do have to wonder how committed Microsoft are to Digital Distribution if the 360 slim for the masses only has a 4GB HDD in fact the 250GB HDD for the more enthusiastic is tiny if you want to install games to HDD as well.
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Geraint Bungay Online Publishing Director, Supermassive Games8 years ago
There is no doubt at all it will come eventually. The three issues are bandwidth, price and quality of the games made available. There is still much left to be done with the publishers and developers making the quality products, and not just library titles, available. There will be a point that the balance will shift from the high street to digital distribution but it will be a gradual shift.
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Martyn Brown Managing Director, Insight For Hire8 years ago
It's also a question of scale. The value chain of traditional retail means that an indie publisher/developer such as ourselves only needs to sell 20-25% of the number of units digitally to match retail revenues - and that's without any of the associated pain of retail such as shelf space, stock, returns, rentals, trade-ins - so actually that number is probably closer to 10-15% all told. Granted it's not 1:1 (retail to digital sales) right now, but it no way needs to be. It's only increasing in terms of digital so that's pretty promising really. We have no complaints.
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Dusty Roberson Video Production Team, E-mpire Ltd. Co.8 years ago
the biggest roadblock in infrastructure. there is no way online only will be ready anytime soon. I know Sony makes generous profits from selling their platform and games in areas where internet is scarce. Until we reach a point where anyone in the world can get broadband speeds, you will see a physical medium. it may become less used in metropolitan(physical discs) areas....which will kill physical game store that rely on used products to stay afloat, but there will still be a physical solution for a good long time. 60% of PS3 owners using PSN is GREAT, but Sony will not abandon the other 40%! Especially since they are also a big player in the optical disc industry.(blu-ray is helping them). Its gonna take several decades before when can honestly start to talk about when to make the switch.
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Jason Sartor Copy editor/Videographer, Florida Today8 years ago
I am not sure the time it takes to download games will ever improve.

Connections speeds will improve, but as games continue to push technology and get larger they seem to scale in proportion with internet speeds.
Example: I can download 1 gig an hour so it takes four hours to download a 4 gig game. Five years from now, I can download 2 gigs and hour but games are 8 gigs in size so it still takes four hours to download a game.
The fact remains laying down new cable, fiber optics, building broadband towers like cell towers (Note how in the U.S. AT&T and Verizon no longer offer unlimited web plans, too much network congestion) each time you want to increase speed and capacity is a huge time and money investment. And it is one I think will always be behind the ability to create new and larger digital content.
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I think 20 years seems quite optimistic or pessemistic depending on your point of view. Obviously, the speed of adoption will vary greatly depending on the available infrastructure. But I guess, it's safe to assume that PC retail - especially in the independent sector - will be there much quicker. My bet would be more like 4-5 years. If you've recently visited a game store and looked at the PC section - you'll know what I mean.
Also, with Google, major TV stations and newcomers like Onlive or Gaika pushing the the streaming technology bandwith will grow even quicker.
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