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Take-Two CEO Says Physical Media Will Remain Triumphant Over Digital Distribution

October 19, 2010 Written by Kishen Patel

Before this console generation even began, there was always a buzz around digital distribution and how it’s “demolishing the physical media form of entertainment”. This was especially prevalent in the high-definition format war between Blu-ray and HD-DVD with the argument that high capacity was unnecessary since digital distribution was going to save the day thanks to support by cloud solutions. However, Take-Two Interactive firmly believes that tangible media is not going anywhere.

According to the CEO of Take-Two, Strauss Zelnick, while their digital distribution profits are minimal but expanding, packaged media revenue will always reign supreme. In the words of the executive:

“Right now, digital distribution of our interactive entertainment represents something less than 15 percent of our revenue, and that’s clearly growing. Packaged goods isn’t going away for our business… because we have huge file sizes.”

Clearly, digital distribution can’t be considered a viable method for delivering content due to the fact that most nations are behind the times when it comes to broadband and even storage. This is where cloud computing comes into play to “serve up” the gaming goodness. However, the chairman is skeptical about its packaged media as well:

“It’s pretty hard to interact with huge file sizes where latency issues are meaningful, if you’re entirely in the cloud.”

Those of us who have tried OnLive can admit that there is great potential in the service with the sacrifice of the cutting-edge graphics and a little reliability, but it’s hard to disagree with Mr. Zelnick. Unfortunately, broadband penetration and even the broadband cost need to catch up with other developed nations, such as Japan, where technologies like fiber are readily available in some areas.