The idea, which is nothing new, seems to be a popular topic these days as more online distributors rise up and vie for your gaming and entertainment dollar. While companies like Netflix and Gamefly have been around since the late 90’s and the early turn of the century (Netflix was founded in ‘97 while the latter in ‘02) many more companies and even publishers have begun to toss their hat into the digital distribution arena. This means that, while we lose physical media, we have a faster and more readily available resource for our gaming purchases. But what does that mean for us, the consumers, as physical, real life competition begins to drop and soon all we’re left with is a computer screen and a “buy it now!” button?  But to what extent will it affect us? Will the industry be buffeted by it or will it collapse in on itself?

Let’s look at a few major concerns that have cropped up around the industry:

1) Pricing/Competition: With fewer competitors who are selling you that shiny new copy of  “Modern Warfare 2″ or “Final Fantasy XIII” it would be a wise choice to be worried about the future of pricing. With lack of competition comes a lack of price cuts, of specials, and of waiting for a used copy to hit the shelf because there really is no reason to cut prices when no other companies are around to do it as well. But digital distribution companies like Steam, Impulse, and a slew of developers on the iPhone have shown that the idea of the “sale” will not go away.  Almost every weekend and usually right before a new game comes out both Steam and Impulse will either throw in free games with purchase/reservation or drastically drop prices in an attempt to keep you interested in their services. Impulse even goes the extra mile and with some games allows you to purchase (for an additional fee) an actual hard copy and box of the game. Even when physical video game stores do crumble there will always be competition for your entertainment dollars. One good thing about publishers getting involved with allowing you to directly purchase your games from them would be that with no middle man to pay off to sell their games it is possible that companies, in an attempt to sell more copies, could easily drop the prices much lower than your local Game Stop or Best Buy can since they lack the overhead that physical stores would have. Competition and pricing is something that you certainly should not worry about as they’re both always going to be around.

2) Actual downloads/ connection speeds: This is one that could cause some problems in the future unless things are changed by the time digital distribution does become a mainstream thing. One of the benefits of being able to get in your car, drive to a store, and buy a game is that you don’t have to rely on much (except your income and a car) in order to get it. In many rural country areas internet speeds are still struggling with dialup connections so even if you did want to download that shiny new copy of Gears of War 2 it would take a few seconds short of forever. Even those with cable or DSL connections could be facing some bad times as, in an attempt to stop pirating, many ISPs have started to enact download caps, which means once you’ve downloaded this amount (usually anywhere from 3 – 10 GB’s) your company will actually start to throttle and slow your speed down. If we become a nation reliant on downloading our entertainment, and most games run anywhere from 2 – 12 gigs, it would seem that unless something changes and the throttling stops becoming a popular prevention method, and if the expansion of DSL and Cable connections don’t begin to spread out into more country areas that many people will be limited in their purchases or may not be able to purchase games at all. This problem could be the achilles heel of digital distribution and may end up being the reason why stores like Game Stop will remain open indefinitely in order to service those who have been neglected by service providers.

3) Rentals: This is one of the major things happening right now. Companies like Hollywood video and Blockbuster are bleeding money as they attempt to find a way to compete with companies like Netflix and Gamefly. The truth is that their demise, unless they find some way to adapt, is almost a certainty. Blockbuster has tried with having its own Netflix-like service that allows you to return them through the mail or in the store but the stores seem to have been neglected by the corporation these days. I know personally that when I try and rent something from Blockbuster, be it a game or a movie, I can almost never find what I am looking for or very little of anything else: this makes returning it in the store in order to rent a new game essentially useless. Keeping one or two copies, while saving them money, means there are less people who are renting the games at one time. They seem to have a rein on this with the movies, especially since they give a guarantee that if its not in stock you get to rent something for free if its a new release, but it still means that you have to wait for someone to actually bring the movie back before you can check it out, free or not. While this does happen with Netflix its not near as often as with blockbuster and turn around time (depending on where you are) is usually a day or two. Unless these companies begin to evolve into a more modern and affordable business plan they’ve really got no chance at competing with online distributors or even the “RedBox” business plan that allows for one dollar a night rentals at kiosks in front of popular locations such as Target, Walmart, and many grocery stores where you’ll be anyway which means that if you get there and there’s nothing to rent, it isn’t as big of a deal as making a special trip to Blockbuster only to find nothing and have wasted your time.

4) Collectibles: Collector’s editions that have been coming out, with a few exceptions, have been horrible. Spending an extra 10 – 30 dollars to get a tin case instead of a plastic one to me just isn’t worth the money. A few games have put additional things that could be worth it or have made the case extremely nice and packed in enough goodies to warrant the cost (Fallout 3’s collector’s edition, which came in a cool lunch box, also came with a bobblehead and an art book for only $10 more). These collector’s editions will most likely never go away and will hopefully become better deals than just the aesthetics that they usually are. Steam, when a sequel comes out or a new game by an older developer is about to be released, will actually give you the first in a series or will give you another game by that same developer if you order the game early. Keep in mind that you aren’t even paying extra but getting it completely free which, in my opinion, is better than a tin clamshell any day. As far as those who do love that you can keep a physical collection, hopefully Microsoft and Sony with their new ideas (the PSP Go which is an all digital system and Microsoft’s new Downloadable games service which is coming soon) will still allow you the option, either in store or like impulse does online, of getting a physical copy. This could also allow gaming stores to keep their doors open as it is another crowd it could cater to. There will always be those people who buy two copies of a game: one to play and one to keep and if they take the ability for them to do that away you may just lose a lifelong customer who used to spend double the amount most people do on the same games.

5) Hard Drives / Data Backup: With Microsoft charging an arm and a leg for its hard-drives and the possible chance of corruption and loss of data, digitally downloading those hard earned $60 worth of game becomes kind of a crap shot but one that can be easily fixed. We already see it with the major consoles, if you purchase something and end up deleting it later on you can re-download it at no extra charge. The problem with this is who wants to sit there and re-download for an hour or so to play a game again? While Sony allows you a massive hard drive in comparison to Nintendo and Microsoft you can also switch it out with any 3.5″ hard drive without any type of repercussions, with the other two companies it takes modifying the systems which is something that casual gamers really don’t know how to do and also voids your warranty as well as having the ability (on the 360) to allow you not to play online. This presents a problem for the casual gaming crowd as it becomes a chore to play older games that you have a craving to play again if you’ve already deleted them off of your 360 or your Wii.

The bottom line is that, while Game stop and other places will be hurting, they will most likely never go out of business and even if they do it won’t be for a long time. Until we can get fast, uninhibited internet access for everyone the idea of gaming going completely digital won’t ever happen and even then, you’ll still have droves of people who would rather a physical copy over a downloaded one.