Microsoft's foray into PC digital games distribution has begun in earnest today with the launch of Games for Windows Live Games on Demand, offering a small selection of titles at prices roughly comparable to competing digital distributors.

Requiring an update to version 3.2 of the Games for Windows Live client, Games on Demand sells digital downloads of GFW titles by credit card or with Microsoft Points. Read more »

Games for Windows Live will become a full-fledged distribution platform for full games from December 15 with the addition of 'Games on Demand', Microsoft has announced.

The Games for Windows Live store will accept either Microsoft Points or credit card as payment for its Games on Demand, which can be downloaded and installed "whenever you want, wherever you want." Currently the store sells only downloadable content. Read more »

Alienware gaming PCs will now come pre-loaded with the digital game distribution service Steam, as well as a copy of the critically acclaimed game Portal, according to the official Steam news site. Dell announced that all 'Area-51' and 'Aurora' desktops, along with the 'M17x' and 'M15x' laptops will include Valve's digital distribution service.

Frank Azor, Senior Manager of Product Planning for Dell's Gaming Group, explained the decision. "With its automatic game updates, easy friend finding and the ability to play your Steam purchased games on any PC, Valve has helped simplify PC Gaming to make it more enjoyable." Read more »

While retailer GameStop has stated that it has nothing to fear from digital distribution for the foreseeable future, the company today took another big step toward addressing the unforeseeable future, appointing Chris Petrovic as the new "general manager of digital media."

Petrovic most recently served as vice president of digital media at Playboy, of all places. In his role as GameStop's digital distribution manager, Petrvoic will oversee "the development and execution of a digital acquisition strategy" by leveraging GameStop's existing stores to drive digital sales. Read more »

Though sales of digitally distributed games are quickly increasing, and the impending launch of Microsoft's Games on Demand store, Microsoft says that it will likely be some time before new games are released digitally and in retail stores on the same day.

"There are a lot of complex issues to deal with here, especially if you start talking about day-and-date release with retail availability--which is not something that we're talking about at all, today," said Microsoft VP Shane Kim to Fastcompany. Read more »

While the economic malaise continues to soften corporate earnings results and retail sales charts, digital distribution outlets are reporting comparative gains in online sales.

Valve now says that year-over-year Steam sales have risen a significant 97%, while competitor Direct2Drive has logged a 56% boost, according to IGN.

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During a quarterly earnings call, Electronic Arts executives expressed their optimism for the digital download market on reports of strong financial progress in the sector.

EA CEO John Riccitiello reported that the company had seen its digital direct revenue grow to $400 million in the last fiscal year, while CFO Eric Brown noted that digital game distribution alone nearly doubled in revenue year-over-year to $80 million. Read more »

Capcom vice president of strategic planning Christian Svensson has said that PC digital distribution is now more important to the company than retail sales.

"No question in my mind. Digital distribution on PC ties directly into our strategy," said Svensson in response to Rock Paper Shotgun's question of whether digital channels were now taking precedence over retail at the company. Read more »

Nintendo of America president Reggie Fils-Aime has said that while the digital distribution market is increasing, there will always be a need for the extra memory storage that retail games offer.

"[Digital distribution is] a nice added business model, but it's not something that's going to take over retail game sales," said Fils-Aime to VentureBeat. Read more »

Bungie audio director Marty O'Donnell has served up three multi-million-selling games with the company, but that hasn't stopped him from noting the effects of used game sales on developers such as his studio.

"It's hard to gauge the effect of used game sales on Halo, but I'm sure it's big," O'Donnell told GamesIndustry. "Complaining about sales when you have a multi-million seller is somewhat difficult to justify, but it seems to me that the folks who create and publish a game shouldn't stop receiving income from further sales." Read more »

Yesterday, we covered an interview with GameStop CEO Dan DeMatteo in which he predicted continued shortages for the Nintendo Wii this holiday season. In the same interview, DeMatteo had a few things to say about digital distribution, many of which could be expected of the leader of the gaming world's biggest brick-and-mortar retailer.

"The first digital distribution was Napster and it was illegal. Let's just start there," he commented, starting a lengthy diatribe in which he credited GameStop's famed used game trade for making "the average value of a current generation game ... about $20" after accounting for GameStop's buy and sell prices for used games. Read more »

Though many celebrate consoles for bringing video games into the mainstream, developer Lorne Lanning believes that consoles are holding the industry back due to rising development costs.

"I think the consoles are a problem," he told GameDaily BIZ. "Years ago I was excited about consoles, but anything that makes development more expensive, rather than better, faster, cheaper, I think is a step backwards." Read more »

Five years is virtually an eternity in gaming years, but that hasn't stopped analyst Michael Cai at Parks Associates from looking that far into the future and predicting that online-enabled consoles like the Xbox 360, PlayStation 3 and Wii will generate $8 billion in revenue in 2013, as relayed by Gamasutra.

Cai sees growth in digital distribution services for games and videos as well as "avatar-based microtransactions" for services like Xbox Live avatars, PlayStation Home, and subscription fees for Xbox Live and console MMO games. Read more »

As some predict that digital sales and downloads of video games will soon render traditional retailers obsolete, Electronic Arts European publishing manager Jes Uwe Intat doesn't think that retailers will disappear across the next twenty years.

"I think there will still be a need for a physical distribution starter, and then services and additional content can be distributed online," he told GamesIndustry.biz. Read more »

Amid increasing revenues for digitally distributed games and downloadable content, a Microsoft executive affirmed his belief that digital sales will eventually overtake those of games sold in traditional retail channels in the near future.

"There's no question digital will overtake physical," said Xbox Europe marketing vice president David Gosen, as reported by MCV. "It happened in music and will happen to our industry." Read more »