Just to clarify. I agree with the post that said that the DLC threat will be limited to add on content. Our current Internet download bandwidth just cannot handle the amount of information that needs to be transferred in order to download full games. Also, I think the publishers would be wrong to try to circumvent GME in it's distribution. GME does so much to help advertise the games being sold today, that without GME to help promote the games, publishers would suffer greatly. Just my opinions.
Yeah, and that only applies to PC games, there's no Steam for the PS3, Wii or XBox 360--the real drivers of the video game market. As a side point, let's also keep in mind that Steam has had to gouge prices on their games in order to make any real sales.
As it applies to the console market, we're not seeing those price breaks, and it still comes down to whether people are willing to pay equal prices for a non-transferable digital copy, or a hard copy that can be exchanged and reexchanged, allowing the buyer to recoup residual value from the purchase. The only party that benefits from digital streaming is the software studio, it's a total lose for the consumer, and I don't see what compels Gamestop's core market to migrate elsewhere.
Everyone is getting super excited because of the hype over Netflix and streaming, but it's not an apt analogy, because digital streaming of games ($60 for a non-transferable copy of a game) doesn't add nearly as much value as digital streaming of movies (7.99/unlimited streaming delivered instantly). They also talk about the surge in of game downloads for handhelds and phones--like it is somehow a substitute for a full-fledged console title--talk to any kid, and you'll know this isn't the case.
Not to pick on you but you are assuming things don't change from their current state of capabilities. Might be so in the short run, but as technology improves at exponential rates, it might be possible in a shorter time than you think.