Digital distribution to rule 'in the next year or two'

Digital distribution is set for a huge rise in popularity in the next couple of years, and will force bricks-and-mortar retailers to change their business models or face extinction.

That's according to GamersGate CEO Theodore Bergquist, who told GamesIndustry.biz that the well-respected PC download platform saw 100 per cent growth last year, and expected up to 200 per cent growth this year.

"When I talk to all the publishers - both small, and really, really, big - digital distribution is on everyone's lips," he said. "Obviously some publishers are really ready to take these steps, while others aren't. Some still see digital distribution as something awkward, and they don't really know what to do with it, while some are really professional and they have it as a main strategy."

But, he says, once all of the publishers are on board, the industry is set for a "key change," and one that's possibly not so far away: "Whether it'll happen this year or next, I'm not sure - but I think it's that kind of time frame we're talking about."

In terms of the threat that the growth of digital distribution poses to bricks-and-mortar retails, Bergquist was clear: "I think digital distribution is absolutely the biggest threat they can ever have," he said.

"Look at the music industry, look at 2006 when iTunes went from not being in the top six of sellers - in the same year in December it was top three, and the following year number one."

However, it won't necessarily spell the end for those stores, unless they refuse to change their existing games-only business model.

"I think they'll get better on the hardware side, selling hardware together with games," he said. "But if it's games only, then no way - I can't see [them surviving]. I've been in e-commerce since 1996 and I haven't seen a goods business model better than this. It's so pure online in its nature - I can't really see how a traditional retailer can survive, unless they decide to go online themselves."

GamersGate, which began life as part of Paradox Interactive, now has over 1000 titles in its catalogue, specialising in independent developer products, but also now featuring key partners such as EA, with titles including Spore and Lord of the Rings: Online, and Microsoft Game Studio with Braid.

The full interview with Theodore Bergquist is available now.