Steam (and other platforms for downloading and streaming videogame content) are a disruptive threat to Gamestop and the videogame sales of other retailers, such as Wal-Mart.
Given that online distribution has now disrupted music, newspapers, books, movies/video, and now tv/broadcast, I'm surprised that investors think Gamestop is worth $3b.
Where EA will release a game, and then sell you unlock codes for content already on the disc as "downloadable content", Valve has ceaselessly offered perks for new and existing customers: years worth of updates to Team Fortress 2, all for free. Left 4 Dead too. Hell, when they introduced Steam Achievements they went back and added support for it in most of their back catalog! That's dedication to the customer.
And no small surprise, people flock to Valve, even when it comes to buying 3rd party games.
They've built an enormous amount of customer trust and goodwill, and this has been paying off immensely as more and more people use steam as a go-to platform for game purchases.
Of course, over time I suspect console makers will move more and more towards digital distribution for all games, but that won't happen overnight or even any time soon.
This is why Gamestop should be finding support (ie, EFF, ACLU, legislators) to safeguard First Sale doctrine for digital purchases: http://en.wikipedia.org/wiki/First-sale_doctrine
I could see eBay trying to find that support, but Gamestop's just a dinosaur.
Yes but they will do that without Steam. Sony, Nintendo and Microsoft already have infrastructure in place for it and already digitally distribute small games. They just need to make it scale to full releases.
http://www.gamesetwatch.com/newzoo_2010spend.jpg
One reason is that AFAIK in Europe and most of the developing world, retail PC games are much cheaper than console games. (Here it's US $15 vs $55-60)
Also, Portal 2 is now up for preorder on Steam.
edit: of course, with digital distribution you also get a much larger cut [1] (so you don't need to sell as many copies as you do on a console to get the same amount of money).
For me, the biggest plus with digital distribution is that you get access to niche genres. I'd never imagine finding games like Reccetear or Super Meat Boy in a local store, but they're available on Steam. It's the same deal with music: outside of popular bands like Massive Attack and The Beatles, I've never been able to find any music I like in a local store. More generally, this is one of the reasons I fervently believe the Internet is the most important human invention since fire: if you take the time to explore your options, you need no longer be tied down to mainstream preferences.
[1] http://www.mcvuk.com/features/808/OPINION-Retail-vs-Steam