| Rpruett said: I think you are under-estimating the problem that this causes. If retailers are getting pinched by digital downloads, they will do a whole host of things to react. For example, Floor space will almost definitely be drastically reduced if the margins. (Think Best Buy in USA) . As Squil mentioned, prices will more than likely grow or stay higher than need be because of the demand for larger margins.
Additionally, I'm still not so sure download speeds will match the desired quality of next-gen games. Given the linear progression of games in general, does anyone not think that they won't be using large storage discs (Similar to, or Blu-Ray like)? I don't know about you but the fastest connection I can get is 6 MBPS. Plenty of areas around the US still lack broadband access. There wasn't broadband access where I used to live until about 3 1/2 years ago . (And I lived within 10 minutes of Malls, Best Buys, Targets Wal-Marts, Car Dealers, Lowes, etc,etc. So it's not like I'm in the middle of nowhere.
In short, I think it will be supported further (and even better than currently, by all competitors from day one) but I don't think it will be fully supported for current games. There is just too much politics involved, IMO.
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What did retailers do to react to online distribution of music and movies? Not much as far as I've seen (not most retailers, just some that got into the DD bandwagon such as Amazon).
Regarding game sizes, I think they won't increase fast given that developers are spending too much money already. Most next-gen games will not be fantastically more detailed or bigger than current games unless more publishers want to go bankrupt (beyond the ones that will anyway during this gen). It's not "business as usual" any longer.
Regarding download speeds, note that I'm not saying everyone will have to download games. The games industry won't jump into DD-only distribution that soon. It's just an option for those who do have access to good broadband connections (a number which will surely be bigger in the next generation).
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