When I first heard about paying for downloads on the PS3 before I got mine on launch day I never thought I would do it. I prefer actually owning my games, which means having a durable, physical copy that is not on a rewritable media. I have had my PS3 for over 2 years now, and guess what? I have paid for 5 downloadable games and 11 SingStar videos!

Why did I do it? First of all they were all reasonably priced for downloads. $1.50 for SingStar videos and all of the games I downloaded except for WipeOut HD were all $4.99 or less. WipeOut HD was $19.99 for a game I would have gladly spent $60 on if it was on Blu-Ray.

Secondly, all of these games are only available as downloads. PSN has some really great downloadable games, but you can only get them as downloads.

The bottom line is if you can release enjoyable downloadable games for a reasonable price, people will buy them. There is no way I would buy a 100% digital distribution console unless the majority of their good games were for $1.99-$19.99.

They also predicted in the XIX century , that Paris must stop growing, or it will be incapable of feeding all the horses that people require for transportation, and the whole city will be in trouble. 

What you did, is called ignoring the future's changes. There will be more and faster internet connections. The internet speed is one of the fastest growing segment of the IT industry.  In 2-3 years, everyone who cares about technology enough to buy the next-gen consoles, can also subscribe for 8GB internet for a relatively low price. 

BTW your numbers only represent people who had an option to connect their console, and decided against it. It doesn't mean that they don't have an inernet connection at all, I guess 90-95% of the GAMERS are already using Internet even now.

Step 1: Let the retailers sell the console at a decent profit margin.

Step 2: Invent a distribution system that is similar to what Nintendo does with its Wii points cards. 90% of the consumers won't own credit cards and will have to buy said "points" (or whatever) in the store. Or: Make games download only but still release them in stores as packages with a code and a manual in them.

And suddenly no retailer will complain.

When saying "digital distribution won't work" you can't just assume that Sony for instance (with the rumoured PSP) won't put any effort into it. Digital distribution can definitely work, you just have to involve the retailers a bit.

Oh and I bet you most people don't actually think having no physical media is bad: They just think buying "nothing" is rather strange and I agree with them. But if you got a plain normal box with your game that contained a manual and a code for instance nobody would complain. It would actually be great for portable consoles: You could have all your games with you, without wasting any space for UMD's or cards. The definition of "portable"

Edit: And for those people without internet you could use download stations just like what Nintendo did with the DS. You just need to go to an internet cafee, a McDonalds or whatever and you can download your game.

The world may be very far, but the countries we need include those of industialized nations. The big three are the main consumers of games. The other countries are coming up quickly, like China and India. Be ready.

i understand you guys are saying that yeah, the countries that matter have decent connections all around. the future will bring faster connections as well.

let's see..

how long does it take you to download a 500mb movie off a torrent site? short time right?

now imagine, even with your t1 or t2 connections, even with a t7 or t8 connection of the future, how long will it take to download a game that is at least 100 times the size of that?

50gb is blu ray.. example you were downloading metal gear solid 4.. actually kojima wanted it to be bigger.. maybe with your future connection speed it'll be done in a few hours.. but that's just now..

in the future, the games are gonna be much larger than that. you really wanna spend three days downloading a 500gb game? games get bigger faster than internet speeds increase. aside from that, do you really expect every person in america to be equipped with top of the line internet?

also, you really wanna have a whopping 10 terabyte hard drive for your console? imagine the extra cost that would be.. sure by then, hard drives will be cheaper. but still, having no physical media would mean you are entirely dependent on your hard drive.. the bigger, the more expensive. always.

what if your hard drive gets corrupted? you've just lost all your games man! with physical media, you don't have to worry about that as much. if one disc gets scratched, no sweat. it's just one game gone. if your hard drive full of downloaded games gets corrupted?

sure microsoft or sony will probably refund you and let you download it AGAIN. but hey, you wanna spend another three days downloading metal gear solid 5? you wanna deal with the hassles of customer service people who keep referring you to the next guy over and over?

no.

unless internet speeds reach astronomical speeds (at a price that is reachable by the masses) and alternative storage media are invented (aside from hard drives), there will be no digital distribution only consoles.

Retailers are not that powerful. It's not like a DD-only console will appear out of nowhere, there will be a gradual transition which is already happening (as you may have noticed).

@bugrimmar:

50gb is blu ray.. example you were downloading metal gear solid 4.. actually kojima wanted it to be bigger.. maybe with your future connection speed it'll be done in a few hours.. but that's just now..

in the future, the games are gonna be much larger than that

Games don't need to get much bigger. A lot of the space is occupied by either FMVs, or loads of content which most developers can't afford to make. Therefore the increase in size won't be as big or as fast as you say. Also, FMVs are decreasing in popularity as hardware gets more powerful, with more and more games using in-engine scenes which look great too.

Then you re-download your games, just like with Steam, Xbox Originals, Wiiware and I'm guessing PSN already does too.

Actually I don't need a future connection to do that... With my connection I can easily download at 2 MB per second. At this speed it takes just 7 hours to download a 50 GB game. Of course not everyone has such a connection, but such big games are the exception rather than the norm.

Regarding broadband availability, mobile broadband (which is improving fast both in speed and distance reached) can take fast connections even to remote places. LTE networks to be launched in the next few years will be 10-20 times faster than the current connections.

Hmm "Retailers wont like it" eh

Given the retailers are being blamed by many Devs for chronic sales due to the practice of second hand resale. I should think that most Devs and publishers would be only to pleased to cut the retailers out of the picture.

I actually think the next gen consoles will require games to authenticate and bind to a console.

For example a title is sold in a store for 20 USD.

The user gets the media and can take it home but cannot play until a further 40 USD is paid online to unlock the content for the console. The consoles Unique ID is stored by the publisher as registered and that console will always be able to play the game.

Everybody wins. The user is free to resell the media but the next user will have to pay to authenticate again.

I realise there are flaws in this approach ie (Broken consoles, Cant lend to friends, multi console ownership) but it will give the games industry DEVS a much needed shot in the arm.

@Cypher1980: That could piss off gamers more than retailers, I'm not sure they'd go that route. Isn't it better to just get retailers out of the picture (for gamers who want DD) and offer games at a lower price for download? With retailer margins out of the way, games can be cheaper and/or publishers can profit more.

For those gamers who don't want DD, there's always the possibility of offering an optical media add-on for playing games from DVD/Blu-Ray/HD-DVD whatever...

Another reason why digital distribution is more valuable than retailers is because the sales are unlimited within a day. Distribution to retailers takes weeks, months and possibly years to distribute properly on a hot item based on parts and labor.

I agree with Infinity. If we download all our games, we will need a gigantic storage device. I am a person who like to hold on to all my games. If I don't physically have the game, I feel if something happens to my console I will have to re download all my games. That actually happened to me recently. My PS3 broke in December 2008. After I got a replacement PS3 in 2009, I had to re download all my PSN games, which is a pain. Even if they have all the games on their server, we will have to connect to the web to play. I enjoy having physical copies of the game, and I love looking at cover arts and inserts. To sum it up, 100% digital distribution is unrealistic.