Microsoft: Digital Distribution Will Outstrip Physical Sales

Up yours, bricks & mortar - Plus, big Xbox Live spend coming to Europe

Posted by Staff
David Gosen
David Gosen
Microsoft's VP of strategic marketing and Live for the Xbox 360 in Europe, David Gosen, has said that there is “no question” that digital distribution will overtake traditional retail.

Speaking at Microsoft's Gamefest event in London, Gosen said, “There’s no question digital will overtake physical. It happened in music and will happen to our industry." He pointed to downloadable content for Guitar Hero and Rock Band, as well as the success of Xbox Live, saying they prove that “digital will be the dominant force in future”.

Earlier today SPOnG told you about the tidy $240 million Xbox Live Arcade has generated in revenue so far.

Gosen also said that Microsoft is readying itself for a big spend on Xbox Live in Europe to attract new customers. "We believe Xbox Live as the key differentiator in the business", he said. "But we haven't taken advantage of Live in Europe as much as we could have - it's been our best kept secret."

A bit more enticing was Gosen's statement that we should, "Expect to see some big announcements coming from us about Live, specifically for Europe, in the coming month."

There looks to be a bit of a clue in comments Gosen went on to make to Develop - "We’re going to focus on Live in Europe and we need to make sure that the content we offer is really strong. So in the US the deal they announced with Netflix is a big coup; it’s transformational in providing a significant amount of content on the video marketplace.”

A deal along the lines of the Netflix arrangement would go down nicely, thanks. Unless Microsoft's planning to scrap subscription fees as it did for Games for Windows Live. We can dream...

Oh – guess what? He ended his talk on a slide that said, ‘We WILL outsell the PlayStation 3’. Good for you!

Sources: MCV, Develop
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Comments

Daz 6 Aug 2008 18:50
1/14
He ended his talk on a slide that said, ‘We WILL outsell the PlayStation 3’


I wish I had a time machine.

I prefer physical formats for my games and films, and I'm sure tons of other people do as well.
ninjaraiden2003 6 Aug 2008 19:29
2/14
Absolutely, as much as I love the digital media of say, the Live Arcade and DLC, I'd hate to lose the hard retail! What the hell would my games collection be, some collection of files on a hard drive!?

What happens if theres some kind of error and it whipes my hard drive, the current 360 has shown the major flaw in its digital content with the problem of the 3 red lights, considering a new serial numbered 360 creates an inability to re-access your current content you've already paid for unless you transfer your content liscences to a new system, which is a process that can only be performed once every 12 months, 360's generally seem to break down with a 9 month period...

Physical media forever I say!
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deleted 6 Aug 2008 20:00
3/14
providing the purchase can be downloaded over and over no limits, then i can stand to lose pyshical media, but i would prefer not too, perhaps a way forward would be to download and get sent a pysical copy for storage purposes maybe even charge £5 / $10 less for a D/L Only version?
alexh2o 6 Aug 2008 21:13
4/14
They just want to stop friends buying different games and lending them to each other! Also, seeing how iPlayer supposedly killed all the bandwidth... what happens when say GTA5 gets launched and 5 million people across the country all try and download a 40GB game?? Full digital distribution will come... but not this generation of consoles... and most probably not even the next!
Joji 6 Aug 2008 23:34
5/14
I grow tired of hearing the digital distro jibe. Its a nice dream, from that perfect vision of game some have, but in practice isnt realistic.

When will these muppets understand, we like our physical stuff. And yes, after the horrors that can happen to a 360, let alone a hard drive, I think physical media for games will always be around and trump the digital.

DoctorDee 7 Aug 2008 07:11
6/14
Joji wrote:
When will these muppets understand, we like our physical stuff.

Face it Joji, it's coming. I was in a meeting in 2000 when someone said to me that the days of digital only music sales were coming. I poo-poo'ed the idea - saying that collectors like me would never make the move. But when faced with the convenience and ease of use of iTunes, I dumped my CD collection - and I was a pretty hardcore collector.

My DVDs are next to go. I see games as a logical conclusion - and the thing is, although I've been playing games longer than most people, I've never really considered games as collectible in the same way as CDs and DVDs. When a system dies, I get rid, and I get rid of the games that went with it... So I have no issues with digital downloads - as long as the prices reflect the reality of the situation. And they won't.

The free market works on competition (if it works at all). With just one distributor of product - who will they compete against? And as has been pointed out, sharing/swapping with mates and (more significantly) second hand sales will be out the window. That's why the platform holders want it, and that's why they'll keep pushing it.

And yes, after the horrors that can happen to a 360, let alone a hard drive, I think physical media for games will always be around and trump the digital.

True - they will have to allow re-download. eMusic does, but iTunes doesn't, and that hasn't hurt them overly.
mrAnthony 7 Aug 2008 10:40
7/14
thats probably because an mp3 is about what? 3mb? a game can be up to 40gbs

you can put about 10 albums on a cd, for back up. thats pretty easy, a little easier than backing up a games collection.
Daz 7 Aug 2008 15:48
8/14
DoctorDee wrote:
although I've been playing games longer than most people, I've never really considered games as collectible in the same way as CDs and DVDs. When a system dies, I get rid, and I get rid of the games that went with it


I still have my Mega Drive and games, hell I even have it hooked up, I never understood the need to get rid of something just because something new is out that some people have.
Twoozle 7 Aug 2008 16:24
9/14
Daz wrote:
I still have my Mega Drive and games, hell I even have it hooked up, I never understood the need to get rid of something just because something new is out that some people have.


Seriously I dont understand all this collecting games or music or films, anything you can digitize and that can save some paper then I say digitize it. Move on its just packaging.
Daz 7 Aug 2008 17:28
10/14
Twoozle wrote:
Seriously I dont understand all this collecting games or music or films, anything you can digitize and that can save some paper then I say digitize it. Move on its just packaging.


I spent hard earned cash on them why should I waste that cash by getting rid of the game or film? I may as well have just thrown the cash in the bin. I'm not gonna lie to ya, I do download films and TV programs, but I put them onto DVD once I check that, they work properly and the quality is fine.
deleted 7 Aug 2008 23:02
11/14
Twoozle wrote:
Daz wrote:
I still have my Mega Drive and games, hell I even have it hooked up, I never understood the need to get rid of something just because something new is out that some people have.


Seriously I dont understand all this collecting games or music or films, anything you can digitize and that can save some paper then I say digitize it. Move on its just packaging.


well i must admit i keep packaging for anything no matter how stupid, hoover boxes?? ya never know, but i agree its about time we shook off the shackles and stop becoming tools on the packing manufactoring companies!!!!

also one day we will run out of Oil and its By Products, D/L are the future just how far in it i dont know?
SuperSaiyan4 8 Aug 2008 12:05
12/14
Microsoft - Digital distribution is best and 360 will outsell PS3.

Sony - PS3 will lead and beat 360

Nintendo - We are too busy making money!!

LOL!!
mrAnthony 9 Aug 2008 14:05
13/14
seriously.

you are like. so funny.

like totally.
Was p 9 Aug 2008 15:46
14/14
Physical Media!? My flat is rammed with the stuff, and if I want find something, I need to go on an archaeological dig to find it.

However, I still reservations about DLC:

1) A total lack of competition, on consoles, for supplying content.

2) No free backup, if you’re HDD goes kaput.

3) Not for games, but for other media. No guarantee that music and film won’t be compromised by DRM and/or lossy compression. I’ve heard too many burnt CDs that people have sworn were at CD quality, only to find they absolutely suck, big style.

4) The finite storage space, on consoles.

On the other hand, I couldn’t lose the third Breeders album for four years.
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