Former Sony Worldwide Studios president Phil Harrison has noted that as the industry transitions to a digital future, market leaders that fail to adapt could lose their dominance. In certain segments of the business, some say that this shake-up has already begun.

“This is a fantastic time to start a company. This is a market going through exponential growth, it’s predicted to double in size over the next five years,” said Harrison at Games Invest 2010. He added, “It’s also a market going through some challenges, going through reinvention as it changes from packaged goods to an online digital market. And that transition is going to be painful, it’s going to destroy value in some companies and create value in others.”

Harrison is spot on. Already, we are witnessing the rapid growth of digital distribution venues such as Valve’s Steam, which took top reign in the PC sector for first half of 2010. During the same timeframe, the PC digital market as a whole overtook sales on the retail front.

While retail transactions still dominate the console landscape, there’s been a huge push towards digital goods this generation and that will no doubt continue into the next.

Harrison: Transition to digital could dethrone market leaders [GI.biz]

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