Sony Computer Entertainment Asia's Tetsuhiko Yasuda--the very same one who said not only was Microsoft not a competitor but a potential development partner--discussed a planned download service for the PS3. In an interview with the Japanese gaming site GameWatch during the Taipei Games Show, Yasuda said the download service will "combat the widespread pirating of Playstation games in certain regions of Asia."
We anticipate a similar service from Microsoft. The distribution would be cheaper, the games possibly cheaper, and the profits higher; however, Sony will have to counter the same shortcomings as the Xbox 360. The PS3 will need a large hard drive, and the cost of repeated downloads could erode a slim profit margin to nothing.