Digital distribution will be the ruling force in games within the next decade and the PS3 will be the centrepiece of that new online era – but we must not ignore the serious issues which faced the music industry, Sony’s David Reeves has warned.

The president of SCEE last week outlined Sony’s bold predictions for the network delivery of games at its DevStation developer conference in London, saying “the disc-based delivery system will fall as the power of the network base rises” ushering in a “golden era of games”.

And PS3 will have a keen part to play in this transformation. “The PS3 install base is growing faster than PS2’s was at this point in its lifecycle,” explained Reeves, adding that in time Sony hopes the PS3 can outstrip the PS2’s total lifetime sales.

“We see the future in the video games industry, certainly in terms of software sales, as continuing to grow – new markets, new demographics, and new games appealing to new sectors,” said Reeves. Sony’s predicted huge total marketplace for PSP, PS3, PS2 and PlayStation Network will help support this, he added.

“The key to the future is the PlayStation Network. Games put straight onto PSN are the big opportunity.”

Titles like Gran Turismo HD were just the start, Reeves added, saying Sony was “staggered” by recent internal figures which show over 40 per cent of PS3 owners download games direct to their machines.

“The next five years are going to be turbulent, but I think it is going to be the most exciting period that we have ever seen in the past ten years of video games,” he predicted.

“The current revenue streams we have are quite simple – hardware sales and packaged media. But that is the old model. The new model is such that our income streams will change – packaged goods sales and hardware sales are still there, but already we are getting into the era of network sales of full titles.”

He added: “We have not got our heads in the sand. To some extent the music industry did – we are trying desperately to not make the same mistakes.

“We do believe that the disc-based delivery system will fall as the power of the network base rises. At the same time the overall industry growth will continue to go upwards as we push out into emerging markets.

“What we don’t see is an overall decline in the market. This is a golden era of video games.”