EA CEO John Riccitiello, one of the biggest advocates for the rising dominance of digitally distributed games, told IndustryGamers that he expects digital sales to exceed sales made in the retail space this year -- he predicted digital distribution would account for half of all game sales in 2010 earlier last year. "Then, you know, I think that we'll find ways to even sell our packaged goods content in chunks and in pieces and subscriptions and micro-transactions," he added.
As Riccitiello points out the gaming industry is moving in the direction of digital distribution with many retailers reluctant to give in. This new way of approaching selling games is a huge benefit for publishers such as Electronic Arts, who view the digital marketplace as the future of the industry. Putting a game out via download cuts costs for the publisher significantly, however retailers would be cut entirely out of the equation if this were to happen. Texas based Gamestop is one such retailer that would be devastated if the digital marketplace were to become the new way to buy games. If publishers were to put out full retail titles on the digital marketplace they would cut costs in land, labor, capital, and entrepreneurship thus maximizing their profits. Retailers like Gamestop would not survive in the digital age of video games. Just as Netflix overpowered Blockbuster with its instant to watch online service and low monthly cost, digital distribution will spell disaster for Gamestop. So will digital distribution become the new "norm" of the gaming industry, or will Gamestop continue to retail games as always? Its up to the publishers to decide, and the decision seems clear.