Will digital distribution eventually end retail sales?

MS man he say no

Microsoft has today moved to allay the fears of retailers openly concerned with the proliferation of digital distribution and the effect it will have on genuine 'walk through the door' high street business.

Kim Pallister, head of Microsoft's Casual Games division has stated that he does not think the widening growth in digital distribution (Xbox Live Marketplace, the upcoming Video Marketplace, and Zune Marketplace) will have an adverse effect on retailers, at least not in the near future-though that's hardly likely to pep up those concerned really.

During an interview given to at last week's Montreal International Games Summit, Pallister commented that, "In terms of the short term, I don't think they're going to suffer a great deal for a number of reasons." Oddly, Pallister opted not to expand on those reasons to the consternation of all the closely listening parties. We jest, of course...

Pallister outlined that most digital distribution is performed in areas such as the "casual games space where the download size is not so formidable as to limit that." He also pointed out that in terms of sizable transfers, "we're still a ways away from a six gigabyte image being something you can easily transfer in some ways it doesn't overlap [with the retail market]."

To further ease any retailer worries, Pallister offered that digital distribution "grows the industry in different ways," and therefore, while also attracting customers that wouldn't ordinarily visit a high street retailer, it "allows for titles that maybe couldn't do the volume for an individual retailer to justify" in terms of physical shelf space.

Yet, one must ask, considering the monumental leaps forward taken by the videogame industry over the past decade, surely it's not going to be too long before retailers are justifiably worried about the digital distribution of complete game titles compromising their turnover? Pallister offered the following in reply. "Will we eventually get there one day? Possibly, but it's quite possible that the games grow in size and outsize the bandwidth growth or whatever... I think it's really a matter of giving consumers choice and different paths to getting to their content."

Hmm, we're not convinced as long as Microsoft is the one reaping the reward from digital distribution - excuse our cynicism - and no, we are in no way affiliated with GAME.

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