Groucho said:
Do you guys even realize how much "bandwidth" a semi-trailer full of BDs, travelling 60 mph down the highway has? A heck of a lot. Bandwidth is indeed an issue, and will be for a loooong time coming. I can take a single CD to work and have "transmitted" 600 MB 10 miles, in just 20 mins. 30 MB/min == 500 KB/sec. That's more than the limit of the best available downstream household DSL connection (the limit is usually about 3 Gb/sec, or about 360 MB/sec after you factor in IP overhead), even in high-tech areas (which represent a minority of consumers, not a majority), and that's over an uncontested route (meaning there's not too many other folks trying to download CDs).
Now fill my pickup truck with CDs (probably several thousand).
Now fill the truck with single-layer BDs (~40 CDs each). Or fill 40 pickup trucks with CDs -- how many CDs do you suppose that is?
Now how about I drive a semi-trailer truck, instead of a pickup.
Digital distribution more efficient than physical? Lol. Physical production and distribution is much more efficient, in terms fo cost, for large amounts of data like AAA-games and movies. Internet trunk bandwidth isn't increasing at some magical rate (its the "leaves" that have been growing dramatically in size in the past few years) -- it will *never* be large enough to support serious digital distribution, unless all the distribution download centers are localized... and, go figure, that costs money... a LOT of money. Digital distribution, en masse, is not only impossible from a centralized location, its financially impractical with a distributed system.
The $4/month Microsoft charges for Live probably barely covers their expenses. If they had to support full digital distribution of full-size games... it would cost a fortune, and its not going to get cheaper. This begs the question, who would pay more money to download something over a long period, even on a fast internet connection, when they can drive to town and purchase physical media for cheaper? Does MS have some trick up its sleeve that will convince their consumers to spend more money on an item that is less tangible, while, at the same time, convince their shareholders that less profit per unit sold is a good idea?
Small games, on the other hand, are a completely different story. Small is perfect for digital distribution. If the games industry starts making little < 1 GB games exclusively, digital distribution *might* be feasible, although it would still cost a bunch more than it does now.
Digital distribution of small, or few, titles works great as is. It cannot grow to overshadow physical media at this time, or any time in the foreseeable future.
...that being said, when the world runs out of oil, and runs out of clever ideas of how to generate power for transportation or factories, and runs out of raw materials (like... oil) to build discs from... digital distribution will be where its at... except of course that no one will be playing video games. You'll be farming instead.
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I'm familiar with the old joke "Never underestimate the bandwidth of a station wagon full of [insert media] going 60 mph down the highway.", and it's very true. There is substantial bandwidth in the transfer of large quantities of physical media, but nobody is saying there is more bandwidth over the internet to the common household (although there is larger bandwidth for some setups).
I would love for you to provide some example of how physically making each disc and shipping it all over the world is more cost efficient than digital transfer to each home. You seem to think localized data centers are a thing of the future but in every region of the world there are already data centers that rent out space and enormous bandwidth for these purposes to companies with needs just like these, if these data centers weren't cost effective they wouldn't exist. This is of course not to mention that a torrent network could be established using the network of consoles to their advantage. My point being that their are numerous ways to tackle the issue whether it is with brute bandwidth from a centralized location, localized servers, or some other out of the box solution like torrents. Where there is a will there is a way, it just so happens that we already know of several ways to do this particular task.
In fact your claim that internet bandwidth will "*never*" be adequate for serious distribution is false on its face. Simply looking at Direct2Drive and services like Steam already offer digital distribution to millions of people, and they offer these services at the competitive industry prices or lower as is often the case with Steam. Hell steam is usually able to saturate my internet connection. That link is a shot I took a while back when AC came out, and keep in mind I live in an area surrounded by corn fields.
The fact that the $4/month MS makes barely recoups their costs is hardly important to the consumers when they are also charging for all manner of things from their store. The amount they make from XBLA and XBLM more than recoups the cost they spend on bandwidth, servers, and maintainence while simaltaneously generating a tidy profit for the creators of the content that is sold as well as themselves.
You asked why people would use digital distribution and as I've said repeatedly in this thread, because it's better. It is more money for developers, can never be stolen, lost, or broken, never requires you to change discs to play a different game, doesn't take up space in your living room, you can play the game 2 minutes after its launched rather than waiting in line at the mall, etc...etc...
Again I point out that while the technological factors are not 100% in place today this discussion is quite clearly not about today but the future of console media. It is extremely feasible that in 10 years time, as I said in my first post, this could be a reality for consoles. It already is for PCs after all.