Digital Distribution: Will Games Face The Music?

Will games follow a similar path?

The chart above, reproduced from Silicon Alley Insider, shows the progression of the music industry through time with different formats, and how digital distribution has taken over. But the sales overall have dropped, which may be a reflection of how piracy affected sales, or perhaps it just says something about the quality of popular music in recent years. Perhaps it reflects the difference between being forced to buy an entire album to get one or two tracks you like, and the ability to just buy those tracks.

Digital distribution of products is in the process of transforming the book publishing industry, as ebook sales continue their meteoric rise and authors discover they may not really need a publisher after all. Digital distribution now accounts for about 25% of EA's revenue, and it's growing rapidly.

The missing factor is just how much this may change game development in the future. THQ has already said they will try releasing a new title for a lower price, seeking to make up the lost profit by selling DLC. I expect this model to catch on for several reasons; it can lower the cost and time for developing titles, and lower the risk, too.

The trend is clear for all sorts of media: Digital distribution is the future. Companies that fail to make the shift fast enough risk being left behind.