Digital distribution will rule this year or next

GamersGate CEO Theodore Bergquist had a few bombs to drop in his interview with GamesIndustry.biz today. Turns out the respected PC game download service saw 100 pecent growth last year, and expects up to 200 pecent this year (having just signed EA to their catalogue, that should help out). And they're not even the most popular!

"When I talk to all the publishers - both small, and really, really, big - digital distribution is on everyone's lips," he said. "Obviously some publishers are really ready to take these steps, while others aren't. Some still see digital distribution as something awkward, and they don't really know what to do with it, while some are really professional and they have it as a main strategy."

Capcom's Christian Svensson, vice president of strategic planning used almost those exact words in an interview today, in fact:

"Digital distribution on PC ties directly into our strategy. Capcom is trying to lead in digital distribution, and I would go as far as to say that in the console space we are already the leading software publisher. We’ve had the highest revenue-generating Xbox Live title, we’ve had the highest revenue-generating Wii title, we’re definitely in the top three or four on the PlayStation network. To that end, on the PC side, I’ve spent the past year building up a digital distribution channel that has about twenty different partners. We’re ready on the console side, and we were the first Japanese publisher to do anything on Steam."

"We will probably do as much digital selling as retail in the current climate," he added.

Sounds like Capcom and GamersGate would make a great fit. They're listed on the service as a publisher, actually, though none of their titles are available. Perhaps this is a recent addition, and Capcom is planning on making the jump soon.

Moving on, digital distribution is a perpetual shift; many executives are still old-fashioned and so are wary of digital distribution, but executives being executives, they can't say no to more money; once they're convinced (or know they have no choice really), pretty well all publishers will be on board, at which point the industry is set for a "key change". More, it's going down soon: "Whether it'll happen this year or next, I'm not sure," says Bergquist, "but I think it's that kind of time frame we're talking about."

More on that "can't say no" thing: he thinks "digital distribution is absolutely the biggest threat [retailers] can ever have."

"Look at the music industry, look at 2006 when iTunes went from not being in the top six of sellers - in the same year in December it was top three, and the following year number one."

This is not to say retail will die, although it seems that way if they sell only games (if you haven't noticed, many game, music and movie stores have started selling each other's stuff these past few years):

"I think they'll get better on the hardware side, selling hardware together with games," he said. "But if it's games only, then no way - I can't see [them surviving]. I've been in e-commerce since 1996 and I haven't seen a goods business model better than this. It's so pure online in its nature - I can't really see how a traditional retailer can survive, unless they decide to go online themselves."

Interesting to note is big retailers like EB Games/GameStop don't seem to be putting up much of a fight; are some retailers giving in to a console-only model?