Gamesindustry.biz is reporting that the Scottish Digital Media Industry Advisory Group has set forth a plan to increase revenues from digital media (including video games) to 6.3 billion GBP by 2011.

Chairman Stuart Cosgrove stated,

“Many of the simple things we do every day are being transformed by digital technologies – from online news and digital photography, to music downloads, multiplatform television and social networking,” said Cosgrove. “These markets offer huge potential for Scotland and we want to ensure that our companies are able to act on these opportunities. To achieve a step-change in Scotland’s global reputation in digital media, we need to increase the number of companies, encourage them to leverage, own and exploit the platforms on which they operate, and extract more value from intellectual property rights.”

More – http://www.gamesindustry.biz/articles/advisory-body-recommends-digital-focus-for-scotland

DGSpy’s Take

You know the digital media revolution is in full swing when governments want a piece of the action.  Game development companies and publishers may be in a better position than ever to negotiate with government bodies on favorable tax breaks to locate their businesses in those areas.  We may even see government subsidies start to kick in at some point.

Microsoft announced that Games for Windows LIVE will be evolving into a portal site that will feature buy & download capability for all Games for Windows LIVE titles.

Microsoft GM for LIVE stated:

“We challenged ourselves to deliver an integrated platform that takes full advantage of the unique capabilities offered by the LIVE service. Our goal has always been to create a seamless online gaming experience for the Windows community, and Games on Demand is a great step toward that end.”

Red Faction: Geurilla, Resident Evil 5, and Battlestations: Pacific will make up part of the list of titles at launch.

http://www.microsoft.com/games/en-US/community/newsarticles/pages/gamesondemandcomingsoon.aspx

DGSpy’s Take

This sounds like a run at Steam’s integrated features. Microsoft’s ability to connect gamers through Windows and the XBOX 360 with friends lists, achievements, chat, and skill matchmaking puts them in a nice position to reach a lot of gamers quickly and offer cross platform gaming connections no one else can.

2010 is shaping up for some serious head to head battles in the digital distribution space.

According to Gamesindustry.biz, Riccitiello “added that if the publisher’s digital business was a stand alone company, it would be seen as the “darling of Wall Street”,”

He also stated that digital distribution will overtake console and packaged goods sales next year and all online services combined (i.e. social networks, game downloads, subscriptions, microtransactions) now make up 40-45 percent of the entire industry.

Other interesting bits in the article:

• Playfish, EA’s recent $300 million social gaming acquisition, reaches 60 million people a month

• Any new EA acquisitions will likely be in the digital market

DGSpy’s Take

We are particularly interested in EA’s acquisition statement focusing entirely on digital businesses.  Coming from the industry’s top dog, this is just more proof that publishers and established players in the industry see online as the number one growth & investment domain.

While acknowledging 2009 NPD numbers are sketchy at reflecting growth compared to 2008, Riccitiello points out that NPD does not take into account the flourishing game sales from non-traditional distribution like game downloads, social networks, MMOs and microtransactions.

Riccitiello states that the industry is in a state of transformation and while it may look messy during the process, he is confident EA will emerge as the dominant packaged goods producer in the industry.  EA is also positioned well for the digital distribution and social gaming with recent acquisition of social game developer Playfish.

More -

GamaSutra Interviews EA CEO

DGSpy’s Take

We don’t see any spin here.  NPD numbers are misleading given their inability at this point to track online digital sales.  Until they or another research group can begin tracking digital distribution in all its forms, no one outside of publishers themselves will have a clear picture on the status and growth potential of the industry as the shift to online delivery speeds up.

In a recent interview with Kotaku, GamersGate CEO Theodore Bergquist said,  “We have daily direct contact with all major publishers out there, we can benchmark most of our numbers with both Steam and Direct2Drive, and we know for sure that Impulse is never up for discussion as being one of the biggest”

DGSpy’s Take

Due to GamersGate, Steam, and Stardock probably not allowed to talk about specific figures, this finger pointing gets a bit tough to solve.  Even if publishers are reporting sales figures (actual or relative) back to the distribution platforms, it is hard to come up with valid comparisons due to different promotions and visibility for publisher titles on each digital distribution platform.

So what is the truth?  We’ll go with the official NPD count that debunks Stardocks’ claim.  Hopefully in the near future we will have more accurate benchmarks to go by.

When asked about their current market share, Holtman declined to reveal those numbers but mentioned they believe they are the market leader, which no one really doubts.

Part of that success has been extraordinary deals every weekend. Weekend sales have been a major hit for Steam as more publishers and developers are willing to take chances on extreme discounts to generate massive sales that continue to generate growth even when the price goes back up.

As far as other companies being threatened by the size of Steam, Holtman feels that is a mistake:

“In terms of whether we get too big or maybe our content shouldn’t be on the platform, it’s just doesn’t make much sense. Because the content helps the platform grow.”

Steam is now 5 years old and was originally created as a technology backend for games like Counter-Strike to keep the community of players together and has evolved into an industry leading digital distribution platform.

http://www.gamesindustry.biz/articles/valves-jason-holtman-interview

In the same article, Gamasutra mentioned that according to IGN (parent of digital distribution portal Direct2Drive) that Valve experienced a 97 percent year over year growth compared to a 56 percent increase for Direct 2 Drive, both leaders in the industry.

Digital Game Spy’s Take

Until research methodology and sources are revealed, we will take these numbers as general guidelines.  There is no doubt that the future of PC gaming is digital distribution.

Digital distribution is less expensive, more games can be merchandised for a longer period of time in light of declining shelf space at retail outlets, and – what we believe most importantly – digital distribution effectively kills the used game market.  Used games eat into potential profits for publishers.  Digital games can’t be resold unless specific permission is given by the publisher or digital store owner.  You get the drift.

Gamasutra interview

Although there isn’t much there yet, the site promises more titles in the coming weeks.  Initial prices on Serious Sam reflect British pricing in pounds and probable strategy to only focus on the UK or Europe.  The founders of the site quoted Steam’s vast success that digital distribution is, of course, where game purchasing is headed.

Almost certainly the service will hook into Eurogamer.net and their 6 million user reach of the European gaming audience that includes a network of websites in 10 European languages.

Not a bad jump start for a new service.

http://www.getgamesgo.com/

“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.” says Frank Azor, Senior Manager of Product Planning for Dell’s Gaming Group. “It’s for these reasons; we selected Steam to compliment the Alienware experience.”

We’ll see how this affects Dell’s partnership with IGN’s Direct2Drive service which offers a game portal on Alienware’s site http://downloads.alienware.com/

News release – http://store.steampowered.com/news/3154/

After closer inspection it looks like Atari has bypassed the major digital distribution platforms and has opted for Digital River to handle its digital products.  We wonder if Digital River will make more of an in with the core digital distribution market online having enjoyed a long history of online software sales and numerous acquisition of competing digital delivery providers such as RegNow, eSellerate, and Element 5.

Additionally, you can now play some classic arcade games for free through your web browser on Atari.com.  Asteroids, Battlezone, Lunar Lander, and Yar’s Revenge are among the few titles offered.

The launch coincides with Atari’s plans to focus more intently on its online business.