I had a go on here at Michael Pachter, analyst at Wedbush Morgan, when he said that downloads would become 20% of the market within 5 years and peak at 50% in 10 years. To me that is incredibly conservative and I expect there to be no physical media at all in 10 years time, online distribution will be 100% of the market by then.
Online distribution confers huge advantages over plastic and cardboard distribution. Instant global distribution, ensuring that the customer has the latest version of the game and massively reduced product costs for starters. Physical distribution is cumbersome, slow, inefficient and expensive. In fact it is amazing that we haven’t switched over sooner, another example of the platform holders stunting progress.
So it was nice to see Wonderhill CEO, James Currier supporting my position. “My money is on the Web people to take the lion’s share of the gaming world by 2013″ is a sentiment I can understand. And it comes in an interesting interview.
But the console platform holders will not be left behind. Microsoft are offering their older 360 titles as downloads on Xbox Live starting with about 30 titles. And now Michael Pachter thinks this will be extended to new games, with hard drive size being the limitation.
Personally I think that once publishers and customers have experienced good downloadable game distribution they won’t want to go back to archaic plastic and cardboard. So we will very soon reach a tipping point. After which plastic and cardboard will very rapidly be consigned to history.
And to see exactly what I am talking about you have to look no further than the iPhone App Store.