"When Apple decided to make their 3.5-inch floppies blue, every floppy went to blue. Then when IBM decided to go with shell gray on the 3.5-inch HD floppy, everyone else went to shell gray," recalls a sales manager for a CD/DVD manufacturer whose involvement with video games and computer software dates back to the 1990s. "One year our biggest client bought over 100 million floppy disks. The next year I would have been surprised if they bought 25,000 when they moved to compact disc."Today he sees the trend repeating, but this time publishers are leaving behind physical media completely: "There used to be an industry need for both DVD and CD and our biggest worry was our competition. Now the biggest worry is technology changing."
He's talking about the rise of digital distribution, and he's right to be worried. With downloadable games on the rise and retail revenues on the decline, the shift toward digital delivery that hit the music industry hard a decade ago is becoming a threat to packaged video games. For now, retail games are still generating more revenue than downloads, but DFC Intelligence recently predicted that this could change by 2013.
As far as former EA executive Bing Gordon is concerned, the move away from packaged games is inevitable. "Physical media's just going away," he said to 1UP earlier this year. "I think we are moving from paper and plastic to digital, and there's a generation that's going to come up and go, 'That paper and plastic just feels wrong. This excess packaging -- it just feels wrong. Having to have used stuff around just feels wrong.'"
It's easy to list the pros of digital distribution: it saves money, it's convenient, and it doesn't leave behind an environmental footprint. If video games follow the music industry's lead and physical media fades into obscurity, is that so bad?
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