In an interview on gametrailers today about the 360 version of Unreal Tournament 3 with Mark Rein, the interviewer asked him what he thought about piracy issues on PC.

He said he was going to do whatever he could to fight it, and mentioned that the PC Gaming Alliance is trying to do just that. He also brought up Steam, pointing out that Valve has done a great job with it, and although it won't end piracy, it's helping.  He said Epic's games have been very successful on Steam, and since they have only been on Steam for a little over a month, I'd say this is very encouraging.

As a side note, Call of Duty 4 is still the #2 selling game on Steam today.  It's only behind Team Fortress 2 which just dropped $10 in price to $20.  I'd say Steam is definitely not only successful for Valve.  

Interesting. This kind of service is what microsoft will gun for on their next system for sure. They better give me more than 20 gigs to work with if they do :)

No, Microsoft won't.  No console will.  It's unfortunately not even an option for consoles.  Retailers make no money on console hardware, and the only reason they stock them is that they know people will buy games as well.  If a console ever tried to go pure digital distribution, it would lose retail support.  Especially from Gamestop, who thrives off used game sales.  Something they wouldn't get from a digital distribution console.  

This is what separates consoles from PCs in the future.  The method of sales.  PC gaming is an internet community at its heart, and that's why something like Steam works.  It doesn't hurt the PC industry for things to go mostly digital.  Even the most internet connected console (the 360) has a miniscule online player-base compared to the PC. 

While consoles may advance to full games on digital distribution, they will never be digital focused or have all games on such a service.  Hard copies of games are a necessity for consoles.

Steam is brilliant I will agree, however I'm very surprised to hear how well COD4 is selling considering how outrageously priced it is on Steam.

Activision went and fixed the price to $70 for European users, not including tax or debit card charges either, the price comes to at least £40 afterwards which is absurd for a PC game in the UK.

No idea how the pricing for it is in the US though, but other than that publishers usually have it spot on with Steam prices.

True, I never thought about that.

I'm thinking that possibly another company may try this however as it eliminates a lot of the cost in the shipping, raw materials, storage and store profit margins. Maybe a Dell like approach where they ship you the console directly from their website and provide you with access to their network for games... Could be a cheaper way to get in to the console industry. Maybe Sega could... :)

It's $49.95 on Steam in the US, and in the US you don't pay taxes on Steam games.  This is standard retail price for a PC game.  Average sales tax in the US is about 6%.  So it saves you a few bucks, but not much.  

In otherwords you described a solution a long with the problem.

Game Stop either turns into a hardware retailer or fades away.

Retailers don't make sales happen consumers do, unless they buy their own merchandise.

DD is the way it's leading, prehaps a happy medium?

I picture Sony being the biggest fighter of this, Nintendo and Microsoft being the first to make the move. That's as far as consoles go, if I remember correctly it was either Phillips or Maxwell that were working on a new Disk type, I'd figure this would become the new HDD rather than a medium.

That's just from what I've seen though, so it could be wrong.

Are you kidding? Retailers absolutely make sales happen. Walmart can single-handedly destroy any product they want. They easily killed HD DVD. Gamestop certainly can kill a game console. You are grossly underestimating their importance and the percentage of video game sales they represent. 

Not to mention, Gamestop isn't the only retailer that would refuse to stock a console that sold no games.  Best Buy was threatening to drop the PSP just last year and it even has retail games.  You don't think the other major retailers would do the same?  Of course they would.

 Yeah...there's no problem in the US...games are always cheaper on Steam...if only by the few dollars saved on tax.

Some other price benefits of Steam:

 -Package deals, such as the entire Unreal collection for $60, great deals on Source packages, etc.
 -When the price drops on a game, Steam is almost always the first to get the drop...I believe Company of Heroes is $20 on Steam but still $30 or $40 in most retail locations.

Yeah. Bioshock PC version also dropped down to $30 on Steam almost a full week before it did at retailers. Steam offers tons of advantages, and great temporary deals like Prey for $5.