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Pachter: All Digital Distribution Is A Long Ways Off Yet

As technology gets better and download speeds get faster, digital distribution has been growing with every passing year. And at some point, it is believed that it will eventually replace physical media.

However, as analyst Michael Pachter says, that's a long ways off yet. In speaking on the latest edition of the GameTrailers show Pach Attack, he believes the idea of retail video games going "download-only" in the near future is off the mark. Basically, he says there's just "no chance in hell" that this will happen any time soon and as long as so many game systems remain unconnected to the Internet, physical media will continue to the be norm. Said Pachter:

With PCs you probably have around 95 percent of them connected to the internet. But with the Xbox 360 it’s probably two thirds, the PS3 it might be as high as 85 percent and the Wii, my guess, is below 50 but probably closer to 35%. So it’s all the guys who are not connected, the 35 percent of Xbox 360 owners and the 65 percent of Wii owners, that are going to keep games from being made mandated downloadable. If you mandate that you are going to eliminate all the customers that aren’t connected to the internet."

In the end, Pachter says that 90% of households would need to have connectivity before the transition is financially feasible, and that won't happen until "at least 2020." Now, regardless of whether or not I agree, I will say I'm happy to hear the prediction...I like my physical game collection, damnit.

5/23/2010 9:02:22 PM John Shepard

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Comments (46 posts)

SmokeyPSD
Sunday, May 23, 2010 @ 9:55:33 PM
Reply

I bow in his eternal wisdom...

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eLLeJuss
Sunday, May 23, 2010 @ 10:01:29 PM
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When i buy something, I at least want something tangible. It makes me feel like im the man.oh yeah! lol Boo for digital dist.

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WorldEndsWithMe
Sunday, May 23, 2010 @ 10:07:07 PM
Reply

In other news: Water is wet.

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chedison
Sunday, May 23, 2010 @ 10:22:28 PM

this made me LOL so hard. I was thinking the exact same thing.

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Snaaaake
Sunday, May 23, 2010 @ 10:43:12 PM

And the world is round.

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godsman
Monday, May 24, 2010 @ 12:20:24 AM

This guy has data backing him up. That percentages he did not pull out of his @SS. Even though you guys know for fact that "water is wet" and "world is round" can you prove it? He is making a statement that we all know, but backed up with hard data. Give him a break guys.

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godsman
Monday, May 24, 2010 @ 12:30:21 AM

BTW, if you guys have seen this show, Pachattack at all, He is merely just answering a question that a fan asked. Some dude asked him if digital distribution will go replace physical medium, and Pachter answered it.

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WorldEndsWithMe
Monday, May 24, 2010 @ 12:49:18 AM

Actually, if you read his words, he says "probably" before the percentages. You hear politicians do this all the time, the numbers are most certainly pulled from his arse and not any kind of poll.

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jaybiv
Monday, May 24, 2010 @ 1:25:57 AM

Classic World.

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hellish_devil
Sunday, May 23, 2010 @ 10:15:02 PM
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Digital distribution = no bargain used copies of games you want but have no money = no good

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StangMan80
Sunday, May 23, 2010 @ 10:16:05 PM
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"I like my physical game collection, Dammit" Ammen to that.
I love my collection and will never Download a full game.

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Snaaaake
Sunday, May 23, 2010 @ 10:28:48 PM
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We're not ready to give up BluRay!!!

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NonProphet
Sunday, May 23, 2010 @ 10:40:02 PM
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Why do Pachter's musings seem so newsworthy to this site? It feels like every other day there's some article with his name in the headline (and that same picture) The fact that he works for an investment firm does not make his guesswork interesting or prescient.

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CharlesD
Sunday, May 23, 2010 @ 10:59:06 PM
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Digital game collections/downloads may not be possible for some time (of full, new gen games) and currently seems to not be favored by the older generations of gamers. However, as the younger group of gamers come into "play" the idea of a collection that can't be scratched, lost, or easily stolen is convenient and when this idea catches on the technology may be available. Netflix killed blockbuster, will an all digital form of gamefly kill chains such as gamestop? (when if the capability arises?)

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Hezzron
Sunday, May 23, 2010 @ 11:13:09 PM
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Good. Now I can sleep at night knowing I have at least another 10 years of disc based games.

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NoSmokingBandit
Sunday, May 23, 2010 @ 11:43:53 PM
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Good. I like to own my copies of games, not just the right to play it when Sony/the developer so chooses.

Also, any idiot can see that bandwidth in the US just cant handle it (for those in other countries, just know that our speeds suck), and the US is a large portion of the market.

Last edited by NoSmokingBandit on 5/23/2010 11:44:48 PM

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Highlander
Monday, May 24, 2010 @ 12:13:22 AM
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Pachter has spoken!

All hail Lord Pachter...

For once (it does happen on occasion, rare occasion) I agree with Pachter on this one. I've heard Microsoft banging on about digital distribution for years now (ever since BluRay showed that HD-DVD was not going to survive and Microsoft decided to back another horse...), but in truth we are no closer now than we were 5 years ago.

Broadband penetration in the US isn't high enough, nor is the data rte available to those consumers that do have it. DSL is horribly slow compared to what is required for efficient digital distribution. This is true in all of western Europe, North America, Australia and actually a decent chunk of Asia too. Sure there are metropolitan areas that have great connectivity, and most areas have options for truly high speed 'Net access, but these are prohibitively expensive options. That of course doesn't even begin to address the problems of bandwidth caps and traffic shaping (aka throttling).

I can see digital distribution working for devices that are intrinsically linked to over the air networks - such as cell phones and other multi-function devices (aka smartphones). But, the quantities of data required for real HD streaming or the distribution of actual 1080p downloadable movies of HD games is just an order of magnitude greater than our infrastructure can currently cope with.

Trying to go completely downloadale at this point is like trying to graft a new business model onto an experimental architecture. Which as everyone has to see is risky.

The PSP is an interesting device. It could easily go completely digital - especially if the PSP2 includes a model with 3G/4G/GSM capability. However, even with the PSP I think a better approach is to stick with physical media, but at last break away from the old optical media and go solid state.

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godsman
Monday, May 24, 2010 @ 12:27:02 AM

I don't think digital distribution will be mainstream until like another 10-15 years. Highlander is right about DSL being slow. We probably can't get decent streaming and downloading, unless we all have FIOS. THAT is impossible. Eventually all HD devices in your house, like HDTV streaming, PC, and game Consoles will be all connected wirelessly. FIOS probably wont be able to handle all three together. I say until at least 10-20 million gamers have twice the speed of FIOS, digital distribution won't be a hit.

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WorldEndsWithMe
Monday, May 24, 2010 @ 12:53:33 AM

Which is also why OnLive isn't going to be taking over for consoles any time soon.

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tes37
Monday, May 24, 2010 @ 1:00:34 AM

Everyone would probably need fiber optic connections for all digital to be a feasible option. Did you hear about the new light sources for your home being able to transmit data from one device to another? The cool stuff is never cheap enough for the average customers.



Last edited by tes37 on 5/24/2010 1:01:22 AM

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Highlander
Monday, May 24, 2010 @ 1:11:47 AM

@Worlds

Thank You! I'm so glad that there is at least one other person in this world who can see that. OnLive whether a good or bad idea, just hasn't got the infrastructure on the ground to work right. Hell, if my wife's laptop is streaming from you tube our vonage calls begin to skip and jump and we've got 'decent' DSL bandwidth. I doubt we'd be able to make a '911' call with something like OnLive chewing up the bandwidth.

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WorldEndsWithMe
Monday, May 24, 2010 @ 1:28:41 AM

Certainly, OnLive fits your example of a business model grafted onto experimental architecture to a "T".

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jaybiv
Monday, May 24, 2010 @ 1:33:46 AM

The killer roadblock is storage. Most of the U.S. can download a 50gb game in a matter of hours. The problem is how many games, songs, pics, and videos can some storage medium hold before the buyer has to get a new one? Then, how does the buyer catalog all this data across multiple storage devices and transfer it to their gaming system with the least amount of effort. When storage capacity greatly increases then all digital will be a viable option, but physical media will never go away.

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Qubex
Monday, May 24, 2010 @ 3:54:14 AM

Highlander, the world ends with World, so you are bound to find a few who agree, until the world ends that is :)

...Pratchett, please move aside, we need to let the carnival parade through, far more interesting then hearing what you gotta say...

Q!

"play.experience.enjoy"

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Cesar_ser_4
Monday, May 24, 2010 @ 5:47:05 AM

wait how come ms didnt at least support hd dvd as their storage...whatever the word is that i forgot... ok used the dam hd dvd to put their game thingies in them instead of stil using regular dvds... i mean come on they could at least have recycled all their wasted drives and discs

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Highlander
Monday, May 24, 2010 @ 10:07:33 AM

@Qubex,

LOL! I find that anyone without a Cable ISP tends to agree with me...on this topic at least.

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Snaaaake
Monday, May 24, 2010 @ 3:17:48 AM
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If we as gamers keep on buying the disc, maybe digital distribution won't take over.

I for one will keep on buying disc game no matter what.

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Kangasfwa
Monday, May 24, 2010 @ 3:19:05 AM
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Another barrier to digital distribution will be service providers like comcast who will throttle the downloads themselves.

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___________
Monday, May 24, 2010 @ 4:01:38 AM
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no sh** Sherlock!
ive been downloading burnout paradise the ultimate box ever since i got back friday night.
3 freaking days of non stop straight downloading and guess how far ive got.
20%!
yup 20 measly percent in 60+ hours!!!!!!!!!
im sorry, but im not going to sit there waiting for a new release to come out.
i would much rather go for a 5 minute drive grab the disk and come home.
people are becoming so fu*king lazy these days its pathetic!

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RebelJD
Monday, May 24, 2010 @ 4:51:35 AM
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Remember when Analog TV got the boot and it ALL went Digital? It forced people to subscribe to cable or satellite to watch their TV programming. Remember when dial-up got the boot and it transcended to high-speed Internet? It forced everyone to purchase a modem and an extended service to use it. Remember when PC's became more affordable? It introduced people to routers and multi-connectivity. Remember when a "house phone" got the boot and it all went Cellular? Now we refer to it as a "LAN" line and we all carry around smartphones.

I'm not sure how many of us Americans cover the pie here at psxextreme.com but we're behind the rest of the world. We're barely getting announcements of 4G products while Europe and Asia have had 4G products well over 3 years now.

They've been on the digital tip for quite some time now and support it quite feverishly I might add. Digital distribution will be here sooner than we know it. Just look at the advancement in other fields. eBooks, movies, music, television, video games etc.

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Cesar_ser_4
Monday, May 24, 2010 @ 5:43:51 AM
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wow i didnt know it was ok to write damnit in an article... hehehe dont take it seriously im just surprised...

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Danny007
Monday, May 24, 2010 @ 6:22:35 AM
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Long live physical media.

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FullmetalX10
Monday, May 24, 2010 @ 6:58:50 AM
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I agree, this time, since I very much like my physical media, NO Uncharted 2 as digitalized game for me thank you very much.

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JackC8
Monday, May 24, 2010 @ 7:20:26 AM
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After spending a half hour waiting for a 444mb DLC to download last night, I certainly wouldn't buy any games that were in the tens of gigabytes over the internet. Of course my hard drive would be full after downloading just one of them.

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Highlander
Monday, May 24, 2010 @ 11:21:04 AM

That's two of three problems identified. Lack of bandwidth, lack of storage and finally, how do you backup multi-TB drives so that when the drive fails (which it will) you don't have to spend a week waiting for everything to download again.

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maxpontiac
Monday, May 24, 2010 @ 11:34:17 AM
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Even it Digital distribution wasn't a long way off, it would be for me.

I like physical media.

Last edited by maxpontiac on 5/24/2010 11:35:07 AM

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DeathOfChaos
Monday, May 24, 2010 @ 11:57:47 AM
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I would rather have a disc based game than a download based game. What if my PSN account got hacked or something? I could buy $300 worth of games and then once my account is compromised, I've lost a good $300 worth of software that I'll probably have to pay a good $300 to get back, where as if I have physical media, if my account gets compromised, oh well. I can make a new one. And since I didn't get $300 worth of a game library downloaded but on physical media, I've got $300 worth of games still. I'll just have lost a few dollars I've spent on home or a few PSN games I've downloaded in the past that I may not even play anymore. If I am to ever be forced to have to download all the games I buy and not have a physical copy of it, then I'll feel that I'm wasting money and buying large, $50 games just so someone can hack into my account and simply change my password into whatever they wanted. Yeah, I'll stick with my High-Def Bluray discs that save my games from being compromised AND save my hard drive from quickly becoming drowned.

Last edited by DeathOfChaos on 5/24/2010 12:00:30 PM

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Highlander
Monday, May 24, 2010 @ 4:37:36 PM

You've just described why Sony is so paranoid about the security of the PS3 and PSN platforms.

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Oyashiro
Monday, May 24, 2010 @ 12:30:59 PM
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Can we rename these Pachter articles "Captain Obvious Says:" ?

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Highlander
Monday, May 24, 2010 @ 1:46:03 PM

Pachter Has Spoken!

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Snaaaake
Monday, May 24, 2010 @ 1:43:52 PM
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Developers risk ruining the industry if they go all-digital.

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WorldEndsWithMe
Monday, May 24, 2010 @ 3:33:12 PM

And my collection.

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AcHiLLiA
Monday, May 24, 2010 @ 4:28:28 PM
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Small tech gadgets yes, HD gaming NO!!!

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Robochic
Tuesday, May 25, 2010 @ 3:37:38 AM
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This guy again, does he ever shut up

I to like my physical copies, not ready for digital only.

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manofchao5
Thursday, May 27, 2010 @ 5:23:23 PM
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love how us ps3 users have the most online percentage because only the good online that goes for free is used most often

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PaiNT_kinG
Friday, May 28, 2010 @ 12:40:03 AM
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boooooooooooooooo000000000000000000000000000000000000000000000000000000000!!!!!!!!!...............................................for digital only :)

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