Delivery systems like GameTap, Direct2Drive and most notably Steam, have been digitally distributing PC games for years and have been met with success. It seems as though PC players are more willing to buy digital distribution than their console counterparts -- maybe because it's been available longer and they feel more comfortable with it or maybe it's because they don't care about having a physical copy since they can not trade it in anyhow.

Many people seem to prefer digital distribution (DD) if it offers them a better value. Why buy a game on DVD at $49.99 if it's available on Steam or Direct2Drive for $29.99? Savings are big in the eyes of the consumer, and DD is low cost to both the seller and the buyer. The world is going more and more automated with computers and what not, and less and less people will visit brick and mortar stores like GameStop to pay for a $39.99 game if it becomes available for less as DD.

While I understand that many people here prefer an actual box and a real disc (me being one of them), times change, I used to prefer a VHS to a DVD and a CD to an MP3. Time will always change things and as much as I love physical copies, I see DD taking over at some point. Change is always tough but one thing remains the same, whether you download it or buy it, the game's content is constant. Gamers have been more than willing to do DD when it's the only option available. LucasArts classics and other older games not sold in stores have sold well over Steam and there are a ton of games that have sold well as DLC only. Castle Crashers, GTAIV Lost and Damned, Shadow Complex, Fat Princess, and Ratchet and Clank Future: Quest for Booty are just a few of those games that would be on the list.

When DD is the only thing available, games have proven to sell well. iPhone users haven't had the luxury of buying games in a store and yet sales are very strong within the App Store. The PSPGo hasn't been met with the same success, however I think it's necessary to point out that most people in the market that the PSPGo is targeting already have a PSP. The issue with the PSPGo's less than hot sales is not based on the lack of physical games, however I don't think it's smart to say that the PSPGo will be a complete failure (see Nokia's Ngage for that).  I think it'll just take some time for people to warm up to the idea of having a gaming system that supports only DLC.

While DLC is on the rise, physical copies haven't shown anything that makes me think they are going away anytime within the next five years, but with the PSPGo being DLC only, I think the DLC era is really starting to begin. WiiWare, PSN games (which will soon include PS2 games), Live Arcade Games, and DSiShop all set the stage for the future of DD.