In the last couple of days, EA and Sega have both announced PC game digital distribution (DD) services. Content available for download appears to be extremely limited initially, but that should change.
When Valve took the DD plunge with Steam, many people called it suicide. Retail still accounts for the vast majority of games sold in the US (Walmart alone claims 25% of the market), and some predicted that retailers would punish Valve by permanently shunning its games.
Valve did take some lumps from its publisher, Vivendi, and lost some retail placement in the process, but the apocalypse never came. Now DD services are springing up everywhere, such as Turner’s GameTap and Verizon’s Game Network. The question is no longer “will retailers accept DD” but “what DD models will work best?” All-you-can-eat subscriptions to a library of games? One-time, one-game lump sum fees (as in the current retail model)? Episodic content?
Ultimately, game retail isn’t going away, just as Barnes and Noble didn’t go away. A huge percetage of games are purchased by parents who wander around stores like Walmart wanting to buy a gift for their kids. Those parents aren’t switching to digital distribution anytime soon. And people who want control over the content on their hard-drive may be turned off by anti-piracy systems in DD.