Its a very valid issue, and a real problem with digital distribution in general. Mobiles have this exact problem - magnified by 100. Content decks are flooded with new content, much of which is pretty much the same as a game that has already been released.
Much of it is re-branding, along the idea of a specific brand.
I'm not sure what Sony is doing, but Ninty's approach seems better to me that the XBLA approach.
Firstly you separate VC + new titles - then you end up with a variety of search options, categories, etc. Much of this relates to easy browsing through the Wiimote (rather than a controller), which makes GUIs much easier to navigate.
In the end, it comes down to quality. All services could end up flooded with games (hence Nintys restriction of one-game-per-month-per dev). PopCap COULD release 20..30..100? games at launch if you allowed them. It would kill the service.
In retail, its the retailers that control what gets shown (on shelves), how much shelf space (etc). This doesn't happen in digital distro world. So its important to make sure there is a higher quality bar for the service, than there is for retail titles. Which is challenging, considering that budgets for digital games are a fraction of full titles.
Gesta Non Verba
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