Consoles are heading for extinction unless changes to their sales model are made.
Sony and Microsoft must fully embrace digital distribution with the PS4 and Xbox 720 or face extinction, Codemasters co-founder David Darling has claimed.
"Consoles have become like dinosaurs heading for extinction as their natural retail habitat begins to change," Darling told MCV. "These ancient beasts must now adapt to a new environment where platforms like Steam, Facebook and Apple's App Store are pushing innovation."
He added: "The industry is transitioning from boxed to digital games. Physical media like DVD is dying out and gaming is rapidly moving to digital distribution.
"If hardware manufacturers such as Sony and Microsoft do not manage this transition soon, they will be overtaken and left behind by companies who are embracing digital distribution wholly and completely."
Of the next generation of consoles, Darling believes supporting physical media would be a mistake.
"If the next generation consoles have media drives like DVD to keep distributors and retailers happy so they can sell physical product this will make the machines uncompetitive," said Darling. "They will not be able to compete on price. The retailers will say to Sony and Microsoft 'you can't sell game X at retail for $60 and then sell it in your App Store for $2.' However, console-makers will need to sell games for $2 or else they will not be competitive with Apple."
Darling sold his interests in Codemasters in 2007 and is now CEO of digital games outfit Kwalee in Leamington Spa.
We can't see Sony or Microsoft putting out a digital only console, but the platform holders will surely continue to shift their business towards a digital only future.
Would you buy a digital only console, or do you still want games delivered on physical media?