Digital Distribution Early Success for Xbox 360

Anyone still wondering what impact the digital distribution of content will have on next generation consoles needs only to look at Microsoft's Xbox 360. Although the hardware has been in short supply since launch, Microsoft has seen 85 percent of those consumers who were able to get a 360 download content from its Xbox Live Marketplace. There have been 10 million transactions on this Marketplace since November 21, 2005.

That's not bad for the first console to whole-heartedly support digital distribution. With Microsoft committed to filling the retail supply channel with hardware beginning in April, and its projections of reaching a global installed base of 4.5 million to 5.5 million by June, the future of digitally distributed content looks bright.

Sony's PlayStation 3 and PSP will also supporting digitally distributed content. Even Nintendo is on board with digitally distributed classic games through its new Revolution. And Nintendo DS supports Wi-Fi distributed content today, although to a much smaller scale than any of these other examples.

The PC gaming industry and massively multiplayer online games like "EverQuest"have thrived on digitally distributed content and transactions within the game universes. Now that business model can finally be taken to consoles. Bethesda Softworks' "Elder Scrolls: Oblivion," the first role-playing game for Xbox 360, will have a Horse Armor Pack download available for purchase this spring.

Mirosoft will provide new content for "Project Gotham Racing 3" in the form of new cars, "Perfect Dark Zero" will get new multiplayer maps and "Kameo: Elements of Power" will get an online cooperative mode. All of these add-ons can be downloaded straight to the Xbox 360 hard drive.

Sony's confirmation that PlayStation 3 will ship with a 60 GB hard drive opens up digitally distributed gaming content, as well as music, movies and TV shows. Microsoft already announced a deal with Sony-owned Epic Records to offer free music video downloads. Expect more deals to come in that format and expect Sony to use its synergy to offer similar content distribution for PS3 after launch.