EA is embracing digital distribution; is Nintendo shunning it?

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Here's a couple of gaming news stories that are pulling in completely opposite directions, and I'm finding the contrast interesting.

First, in an Electronic Arts earnings call, CEO John Riccitiello affirmed the company's commitment to digital distribution, saying "Over the coming years, we will transform EA from a packaged goods company to a fully integrated digital entertainment company. We're transforming EA to a games-as-a-service model." EA's revenue from digital distribution was up 46% to over $800 million in its last fiscal year, and it expects that number to exceed $1 billion this year. Three years ago, investments were split 90-10 in favor of physical products, but this year the balance is nearing 50-50.

Those are the highlights of the call, but you can read the full transcripts or Cnet's summary of everything that was said.

So this sounds like good news to me, but hey, I'm a FiOS customer. I find at this point it feels really strange to have to go to a store and get a piece of paper or plastic that has the content I want. The only time I have to do that, really, is for some of the console games I buy. PC games, movies, music, books...I get all that digitally. I'm ready to download my AAA console games, too, thanks. (EA & Sony – y'know, when Sony has a working network – have been dabbling in this space. When Mass Effect 2 came out for the Playstation 3 it was available day 1 as a downloadable, $60 title. Microsoft also offers full titles digitally, but not until they have 'aged' a bit, in order to give brick and mortar retailers their chance to sell first.)

Now in contrast, let's talk Nintendo. There's a new rumor going around about the new Nintendo console. I believe Kotaku's Stephen Totilo broke it first, and in my experience Totilo has had a pretty good record with these rumors. Anyway, the rumor is that the new Nintendo console will have 8 GB of storage and no hard drive and the rest of this post is based on the assumption that the rumor is true.

Now 8 GB on your phone is fine, but if the new console is going to have HD graphics and all the bells and whistles that we expect on the Xbox 360 or PS3, it's a pretty safe bet you won't be downloading Call of Duty and storing it on the console (well, unless you're only going to store one game at a time). So what does this mean?

Well, it could mean that Nintendo is just going to expect you to provide your own storage, and if so that's OK with me but it sounds kind of complicated for a Nintendo plan; they always like to make things dead simple for their customers.

And it could mean the rumored name "Stream" refers to the fact that Nintendo's new console is going to be all about streaming gaming, a la Onlive. But I don't think that's very likely, either.

More likely it means Nintendo is still holding itself back from embracing online connectivity and digital distribution beyond the 'retro' and indie kinds of things they sell as WiiWare and Virtual Console titles these days. For the 'big' titles you're going to have to keep going to the brick and mortar stores.

This isn't a deal-breaker or anything, but it just doesn't seem very future-proof to me. Assuming the new machine comes out in 2012 and is going to have a 5-year life span, come 2017 I really think having to buy a piece of plastic is going to feel pretty old-fashioned.

And it seems like EA might think so, too. So what will this mean for EA games on the new Nintendo console? Over time EA might just start skipping Nintendo in favor of platforms it can sell to digitally, but I guess we'll see. I'm just a little disappointed in Nintendo's (apparent) short-sightedness when it comes to digital distribution. Anyone with me? Or is Nintendo setting themselves up to be the preferred console for people who live in rural areas with no broadband?

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