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Tuesday March 9, 2010
Selling the Game

Microsoft (Xbox)

Selling the Game

Selling physical, boxed product via bricks and mortar stores such as Gamestop (GME) and Virgin Megastore has been the historical backbone of the games industry. Online retail (Amazon [AMZN], EBGames.com, etc.) is a fast-growing area as well. But the long-term future of the games industry is all about digital distribution, as shown by Microsoft (MSFT), Nintendo (NTDOY), and Sony (SNE), all in on the action with their online game stores. This model includes PC direct-to-consumer services such as SteamPowered.com from Valve Software and Direct2Drive from IGN. Digital distribution also means "unlocking" access to a game already on a service. The new App Store from Apple (AAPL) is a good example of how to do this and make money (BusinessWeek.com, 8/11/08).