Both companies are pushing direct downloads as the premiere way to buy new games, and many are expecting the direct-downloading technology to be one of the main selling points in the next generation of gaming hardware. As a side effect, the new revenue model largely cuts out used game retailers, since there's less physical media to resell or swap with friends.
But let's get real for a moment, this is nothing new. In fact, game companies have been trying to get direct-download games working on consoles since the early 1980s. Let's take a brief look at previous efforts to sell console games without any physical media:
The service's downfall was a result of innovations to Mattel's Intellivision game system, which began using cartridges with ever-increasing amounts of memory. The PlayCable service could no longer keep up, since the special cartridge could hold only a fourth of the total space that newer games required.
Then GameLine came along. This third-party game download service from Control Video (which later became America Online) worked with multiple game consoles and would let users download new games through a telephone line connected directly to a special cartridge. It would then limit gameplay to a certain number of plays that users would have to prebuy.
Despite GameLine's innovative approach to game distribution, it had two big problems. The first is that it never got big game publishers on board, meaning that users were paying big money for smaller titles that weren't available at retail. It also came out the same year as the video game crash of 1983, when most of the hardware vendors and software-publishing houses were going bankrupt.
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