The Road to DL

   The NPD Group issued a press release earlier today that basically reiterated what everyone in the industry already knew. More people are purchasing their PC games and downloading them rather than buying physical product from a shop. Salient quotation from the press release:

http://www.npd.com/corpServlet?nextpage=press-releases_s.html
"During the first six months of 2010 (Jan.-June), 11.2 million PC Game full-game digital downloads were purchased online compared to 8.2 million physical units purchased at retail during the same period."

   This trend will only continue. I wrote a opinion titled, "The Future of Gamestop is Blockbuster" a few months ago which outlined how Gamestop was doomed to the same fate as Blockbuster Video. It is inevitable that any bricks 'n mortar software supplier is doomed because the business model favors direct downloads. Why shlep to a shopping mall to buy a PC game when you can buy it and download it within the span of an hour or thereabouts? It's a very convenient and fast proposition for the consumer. When you shlep to a shop, there's no guarantee that the game you're looking for is in stock. A download is always available online and a vendor can sell a million copies and never worry about keeping inventory on hand.

   Console games are still at least a two or three years away from following in the same footsteps as the PC software market but the domination of console software downloads is inevitable. Of course, there'll always be consumers who prefer the physical product and there will always be a market for physical product but the primary revenue driver for publishers in the next few years will be in direct downloads.