The major games stories of 2007 and 2008 won’t be about the so-called triple-A titles with mondo development and marketing budgets. The real change that’s brewing as next-generation consoles prepare to invade homes around the world is being introduced much more insidiously. Xbox Live (and as-yet unannounced offerings from Sony and Nintendo) are going to destroy video games retailing as we know it today.

Take a look at the list (below) of publishers that have announced support for the Xbox Live Arcade service: Electronic Arts, Midway Home Entertainment, Capcom, Vivendi Universal Games, Konami, SEGA, Hudson Soft and others. Take a look at the list of games that are being offered. Microsoft plans to make 35 titles available via Xbox Live Arcade by summer 2006. By summer 2007 there could be hundreds of titles. Microsoft is creating demand for broadband delivery of games.

Sure, the games on offer right now are non-threatening casual games, but it’s only a matter of time until gamers are downloading entire triple-A titles and not just demos of them. With more and more retailers moving towards the sale of used games, first- and third-party publishers are going to push the direct-to-consumer channel even harder. Here’s the game plan:

Get the technology into living rooms. Sell the console as a regular console, not as a delivery device for Xbox Live Arcade
Generate demand and drive habitual use by providing a simple, easy-to-navigate interface, frequent demos for highly anticipated new releases, multimedia content, and low, low prices
Offer larger (200+ GB) hard drive options as consumers begin to fill their drives with content
Establish consumer trust for your commerce engine through micropayments and other small (low-risk) transactions
Flip a switch and offer top-tier games via direct download
We’ve included the official Xbox press release below. Read on for details about which publishers will be offering games for the Xbox Live Arcade.

There will be some missteps. Valve’s launch of Half-Life 2 via download service Steam ran into numerous issues that for the most part have been resolved. However, the writing is on the wall: the retail distribution model is about to lose its stranglehold on gamer wallets. It’s not if, it’s when.

=========== PRESS RELEASE BELOW ===========

Microsoft Unveils New Market for Bite-Sized Game Titles as Industry Heavyweights Pledge Support for Xbox Live Arcade on Xbox 360

Microsoft Corporate Vice President Peter Moore to Reveal Highly-Anticipated Holiday Titles and Supporting Publishers to Digital Life Consumer Technology Audience

At the Digital Life consumer technology showcase in New York, Microsoft will reveal the launch window portfolio for Xbox Live ® Arcade for Xbox 360.

Peter Moore, corporate vice president of worldwide marketing and publishing for Xbox at Microsoft, will announce in his Digital Life keynote speech the highly-anticipated Xbox Live Arcade launch titles, as well as Xbox Live Arcade support by the world’s leading publishers including Midway Home Entertainment, Capcom, Electronic Arts, Vivendi Universal Games, Konami, SEGA, Namco and Hudson Soft.

”The next generation of Xbox Live Arcade for Xbox 360 will enhance the gaming experience for casual and competitive gamers alike, across the globe, providing something for everyone with world-class games and captivating content,” said Moore.

Xbox Live Arcade for Xbox 360 will launch in the U.S. and Canada on November 22, 2005, simultaneous with the North American launch of the Xbox 360 console. Similarly, the European and Japanese versions of Xbox Live Arcade for Xbox 360 will launch alongside the European and Japanese console launches on December 2 and December 10, respectively. The next-generation Xbox Live Arcade online service will be fully integrated into the Xbox 360 Dashboard providing a central destination for Xbox 360 gamers to download new games, access their game collections, check out new releases and experience around-the-game features.

The Xbox Live Arcade for Xbox 360 launch portfolio will include the following titles through Holiday 2005:

· Astropop - Popcap Games
· Bankshot Billiards 2 - pixelStorm, Inc
· Bejeweled 2 - Popcap Games
· Crystal Quest - Stainless Games
· Feeding Frenzy - Popcap Games
· Gauntlet - Midway Home Entertainment
· Geometry Wars 2 - Bizarre Creations
· Hardwood Backgammon - Silver Creek Entertainment
· Hardwood Hearts - Silver Creek Entertainment
· Hardwood Spades - Silver Creek Entertainment
· Hexic ® HD - Microsoft Game Studios
· Hoopworld - Streamline Studios
· Jewel Quest - iWin.com
· Joust - Midway Home Entertainment
· Marble Blast Ultra - GarageGames
· Mutant Storm Reloaded - PomPom Games
· Outpost Kaloki - Wahoo Studios
· Robotron 2084 - Midway Home Entertainment
· SmashTV - Midway Home Entertainment
· Wik: Fable of Souls - Reflexive Entertainment
· Zuma - Popcap Games

As an added bonus, the full version of “Hexic HD,” the Xbox Live Arcade puzzle game, will be included free of charge with every Xbox 360 System at launch. Designed by world famous Tetris® creator Alexey Pajitnov, “Hexic HD” will be preloaded on the Xbox 360 hard drive.

Additionally, Peter Moore will announce that more than 40 publishers and developers have signed on to support Xbox Live Arcade for Xbox 360 with game titles. These partners include:

· Atari
· Bizarre Creations
· Capcom
· Codemasters
· CTXM
· Digital Eclipse
· Electronic Arts
· Empire Interactive
· Gaia Studios
· GameHouse Studios
· Garage Games
· Gastronaut Studios
· Hamster
· Harmonix
· HipSoft
· Hudson Soft
· iWin
· Konami
· Llamasoft
· Load, Inc
· Mad Doc Software
· Majesco
· Microsoft Game Studios
· Midway Home Entertainment
· Mumbo Jumbo (United Developers)
· Naked Sky Entertainment
· Namco
· Oberon Media
· Pick Up And Play
· pixelStorm, Inc
· PlayFirst
· PomPom Games
· Popcap Games
· Q Entertainment
· RealNetworks, Inc
· Reflexive Entertainment
· Secret Lair Studios
· SEGA
· Silver Creek Entertainment
· SNK Playmore
· Stainless Games
· Streamline Studios
· Tik Games
· Ubisoft
· uWink
· Vivendi Universal Games
· Wahoo Studios
· Wanako Games
· Wild Tangent

Xbox Live Arcade for Xbox 360 will consistently release new games to the service for gamers to download, with 35 titles planned by summer 2006. Gamers can choose from a variety of genres including action arcade titles, coin-op and retro classics, puzzle games, casual sports games, light strategy titles and card & board games. Games will come from the world’s leading publishers as well as console developers, downloadable game shops and smaller developers alike, creating a great mix of classic favorites and truly innovative titles for the gamer to choose from.

”We’re proud to be part of Xbox Live Arcade on Xbox 360, the world’s first and only destination where gamers can find, download and buy smaller games directly to their console,” said Scott A. Steinberg, Vice President of Marketing, SEGA of America, Inc. “Retro, casual and hardcore gamers will be pleased to have access to the selection of quality SEGA titles we plan to offer via the new Xbox Live Arcade.”

Xbox Live Arcade is powered by Xbox Live Marketplace, enabling gamers to quickly and easily download and unlock Xbox Live Arcade games. Every game in the Xbox Live Arcade will have a free, fully playable trial version that any Xbox Live Gold or Silver member can download onto their hard drive or memory unit.

NOTE: Earlier this week (10/11/05), Microsoft and RealNetworks, Inc announced plans to collaborate in the casual games arena. In this games partnership, RealNetworks will develop a series of new casual games for Xbox Live Arcade for Xbox 360.

About Xbox Live

Xbox Live continues to transform and unite Xbox communities worldwide, with a presence in 24 countries, and a global community of more than 2 million members. As the first global, unified online console games service, Xbox Live offers world class games, intelligent matchmaking, tournaments, unique programming and integration with Xbox.com.