Games used to come on shiny, silver discs...

It is well known that a couple of things really scare the games industry these days. One is pre-owned games, which undercut publishers and provide zero profits for anyone but the retailer. The other is the internet and all the high-speed piracy it has introduced - pretty much crippling the PC games market all together (with the exception of The Sims and Football Manager), whilst consoles like the DS have also seen their software sales take a hit thanks to illegal downloading.

But as Valve have proven with the success of Steam on the PC (pictured), internet downloading can be a friend to Games publishers (and developers themselves), who are looking seriously at cutting out the middle man on the high street and selling directly to the consumer. By doing this, publishers can better dictate the price of games, can cut out pre-owned and can provide a legal alternative for those who prefer to download their media. This sounds like a good solution for everyone (but the high street retailer).

Although we maybe a few years off a total download-only games industry, the first signs of this change can be seen happening within this console generation. The PS3 already has full retail games like Burnout: Paradise available in digital form on its PSN store. Similarly the 360 has launched its own Games on Demand service, allowing gamers to buy a whole range of older titles using their Microsoft points. None of the titles offered by these services have, as of yet, been new releases, with Sony and Microsoft seemingly content to dip their toes in the water, but it is a sign of things to come.

Another good indicator of this trend is the online-exclusive download games available on all three major consoles, via XBLA, PSN (pictured) and WiiWare. Whilst a few years ago the output in this domain was limited to retro arcade titles or HD renditions of simplistic mobile-phone quality games, they now in some cases rival full-retail products, having become increasingly sophisticated. Games like Epic’s Shadow Complex on the XBLA are now pushing at the boundaries between download-only and retail product, whilst a number of PSN titles have since become retail products (Pain, WipeOut HD, Quest for Booty, Siren: Blood Curse). Fable 2, a full 360 retail game, has also been converted into an episodic XBLA game, available in small instalments, another move which could indicate future changes to the way we receive this medium.

So far, these titles have subtly served to introduce gamers to the idea of downloading games directly to their consoles, as well as to the idea of paying for something without receiving a hard copy. Now all that remains is for the majority of people to have high-speed internet access and then we can expect to see this form of games distribution become the mainstream.

Of course, there are already download-only platforms on the market, in the form of the PSP Go and the iPhone (and now the iPad). There is also the OnLive platform, which was announced last year and plans to cut out retail through live streaming of games over the internet (think of it as being like YouTube, but for games). Digital Foundry’s Richard Leadbetter has already written an interesting piece questioning its viability, which I won’t go into here. But whether or not OnLive works, it is yet another example of a burgeoning trend in video game distribution.

Here are some download-only games I highly recommend:

Oh, the hours I've spent on this! A brilliant re-vamp of an arcade classic, Pac Man Championship Edition on XBLA (also available at retail in the Namco Museum compilation):



The highly-rated World of Goo, available on WiiWare (and through Steam on PC):



And of course, as mentioned before on this blog, the amazing Flower on PSN: