Console retail sales are about to be wiped out.
Not by some impendingly huge crash, at least that's any worse than the industry wide downturn anyway, but by competition. Digital sales are coming, and they're going to win out entirely in the end.
Physical media itself is a dying trend. It's not going to be surprising if this is the year digital music sales finally eclipse CDs as the largest music selling category. Digital sales of video continue to grow faster than physical sales of the same media year after year, and is no doubt held back by a staunch, almost luddite industry distrustful of any and all new business models and even new methods of distribution.
But some of the first files ever shared online, as soon as it was even physically possible, were software files. The software industry as a whole, including the video game industry, has been far more willing to quickly take up the banner of new distribution methods and business models.
Already the PC retail software section of your local store is all but non existent. Cellphones, and the now more mobile pc's such as tablets, are set to outsell traditional PCs altogether this year, and have never had any physical media to begin with. Games, it turns out, are a huge portion of sales for all these platforms, the largest selling section of the App store for both Android and Apple.
So it's not so surprising to foresee a world in which conumers, equipped with the upcoming next generation of consoles finally built hardware and software wise towards digital distribution of games, choosing digital distribution as their primary means of aquiring software. That these consoles can even consider a requirement for being always online realistically shows just how prevalent a connection to the web has become. And any consumer without a reliable connection is just as likely to have trouble getting a physical copy of a game anyway, perhaps even more likely as the web spreads to ever further corners of the world.
And really, there's very little that's going to stop this from happening. How software is distributed is ultimately a middle man, and no matter how powerful a middle man may seem today, they're ultimately dependent on the producers on one end and and consumers on the other to keep themselves alive. As soon as there's even a marginally better alternative they're liable to wither away in the blink of an eye. And with more convenience for most consumers, and higher profit margins for publishers and developers, digital distribution is more than marginally better.
In short, online DRM requirements for blocking piracy and used games in the new consoles isn't going to be necessary. Not when the majority of consumers will quickly and happily accomplish much the same thing for Microsoft and Sony voluntarily. A vociferous and vocal minority demanding physical media hasn't slowed the dissolution of physical media in every other software platform in existence, it's doubtful it will slow the trend on the new consoles either. What this will do for analysts, suddenly needing new sources for sales numbers, will be interesting. What this will do for companies like Gamestop is not nearly so hard to foresee.