Stores that sell video games may face a long-term threat as more consumers elect to download and play digital copies of video games over purchasing physical media.
Stores such as Wal-Mart, Target and GameStop rely heavily on video game sales, but may need to shift their tactics as the number of digital downloads increases in the years to come.
"Our solution is not to dive into a fight with Sony, Microsoft, Nintendo, as it wouldn't gain any 'new audience' for publishers," said Dave Perry, Gaikai owner said in an interview with Reuters. "Instead, our strategy is 100 percent focused on being an ally to publishers and first-party hardware makers, by delivering them audiences they don't reach today."
Gaikai is an online infrastructure allowing gamers to purchase, stream, and play video games directly through their Internet browser without physically downloading any content.
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Game betas such as Quake Live -- an online version of Quake designed specifically to be played inside a Web browser -- has been extremely popular among gamers, who are pleased to not have to download and install very much software.
Wedbush Morgan Securities analyst Michael Pachter said just two percent of overall video game sales are digital downloads right now, but that number is expected to double each year up to $1.6 billion in 2011. I originally would have thought it doubling would be unlikely, but seeing how much consumers enjoy streaming movies and other content through their game consoles consoles, perhaps a 50 percent increase next year isn't entirely impossible.
Streaming video games faces several major roadblocks that must be handled before the format sees substantial growth, although can continue on the current path. One such problem is that some game developers often are weary of having to deal with a middleman that will get a cut of overall video game sales. Also of extreme importance, consumers must continue to adopt faster Internet speeds with additional broadband so games can be downloaded and streamed better.
I'm especially interested to see if Target, Wal-Mart, GameStop, and other brick and mortar retailers begin to offer digital download stations inside their stores.
Are you interested in digitally downloading your video games?
