The biggest names in the gaming industry explore where digital distribution, cloud computing and streaming multimedia have the potential to take video games, movies, music, TV and more. Plus, a look at how streaming multimedia and downloadable content (DLC) promise to change home entertainment forever. Features commentary from a litany of video game business experts and insiders including Atari founder Nolan Bushnell, Electronic Arts/Digital Chocolate founder Trip Hawkins, Gaikai CEO David Perry, Disney Interactive Studios head Graham Hopper and THQ CEO Brian Farrell, plus leading reporters from The Los Angeles Times, MSNBC, VentureBeat and others.

Despite the video game industry’s crushing sales losses last year, it’s a fundamental truth that analysts, experts and insiders alike are quickly having to wake up and accept: Nothing has changed in 2010. Color us shamed and embarrassed; despite the continued success of social, mobile and online games, and rise of alternative platforms such as Facebook and the iPhone/iPad, monolithic publishers like Electronic Arts, UbiSoft and Activision still continue to struggle to play catch-up.

Not that these outfits or popular franchises ranging from Call of Duty to Assassin’s Creed will go the way of the dodo anytime soon, just like retail boxed products as a whole. (People still love the feel of physical products, and the lure of familiar franchises when disposable cash is too tight to risk on unknown series can’t be understated.) But as today’s most savvy business leaders know, the hottest action in gaming and most innovative industry developments are actually happening outside the shelves of your local GameStop. Not to mention, of course, increasingly being dominated by a mixture of venture-funded start-ups, scrappy indies and resourceful garage developers, who are quickly flipping the traditional game publishing model on its head, and running circles around larger corporations as a result.

But we’re not telling you anything that you don’t already know, or can’t read elsewhere for that matter. Which is why, in episode two of Game Theory, we instead decided to ask the question: If it’s so darned obvious which way the wind is blowing, why is everyone still acting as if last year’s monumental sales drop-off was just a fluke, or worse – as if nothing whatsoever was wrong with the business? As a litany of gaming’s top names explain, the sky is indeed falling: Unfortunately, too many remain clueless or simply content to stick their head in the sand and pretend such historical changes aren’t happening, right up until the point that they get crushed.

Take it from Gaikai CEO David Perry, who sums things up quite succinctly. “Overall, the industry is on the same general path,” he says. “We are still today in a world of retail. That’s the way it will be for the short-term. Long-term, this industry is going digital, and it’s going digital very quickly. To some extent, as the retailers come up with policies like used games, they’re actually putting their foot on the gas pedal to oblivion. And that ultimately is going to make the game industry digital about as fast as it could possibly be.”

“We’re in the Cambrian explosion of games, where all these weird new life forms are popping out for the very first time and filling these niches that are appearing dramatically,” seconds The Sims creator Will Wright, who points to the rise of social games and free online games as a major turning point for the field. “Of course a lot of the old, established things are going to be dying off pretty rapidly,” he ominously portends. “Even the major life forms.”

However, game publishers continue to swear that they’re not only aware of the changes and taking steps to keep up, but also poised to come out better for having done so. Yet years continue to pass, and despite assurances to the contrary, revenues continue to flatline and studios disintegrate. As a result, game industry leaders are grudgingly being forced to accept  that nothing has changed.Besieged on all fronts by shifting player habits, growing economic issues and the rise of digital downloads, games for social networks and free-to-play online outings, insiders are becoming increasingly desperate to reinvent themselves. Forget the happy faces you see in the headlines. Here, the field’s biggest names let down their guard to reveal the magnitude of the changes rocking the business, and what it takes to survive. But the question remains: Can developers and publishers evolve in time? Tune in to episode two of Game Theory to find out.

Despite assurances to the contrary, as revenues continue to flatline and studios disintegrate, game industry leaders are grudgingly being forced to accept reality: Nothing has changed. Besieged on all fronts by shifting player habits, growing economic issues and the rise of digital downloads, games for social networks and free-to-play online outings, insiders are becoming increasingly desperate to reinvent themselves. Forget what you see in the headlines. In the second of our multi-part series on gaming’s reinvention, the field’s biggest names let down their guard to reveal the magnitude of the changes rocking the business, and what it takes to survive. But the question remains: Can developers and publishers evolve in time?

With a Supreme Court case that threatens government regulation of violent video games coalescing shortly and the token accompanying witch hunt that’s sure to precede its arrival, we thought it might be a good time to reiterate: Even the most seemingly ‘irredeemable’ and ‘horrifying’ games (e.g. Rockstar’s Grand Theft Auto series) may simply appear that way because they’re viewed out of context.

Mind you, we’d be the last to say that Manhunt 2 was appropriate for minors, or spoke to anything besides audiences’ baser impulses (although it does emphasize strategic thinking and tactical approaches more than torture porn, which is the admittedly needlessly hyper-visceral visual payoff for your patience). And, of course, being fans of the Saw franchise, which topped domestic box office takes with nary a peep of protest from parents and educators throughout the U.S., realize that the whole argument seems a bit hypocritical at this point. Still, it’s important to note – just because a game is designed with mature adult audiences in mind doesn’t mean that it’s evil, intended to foster moral decay or, in fact, has anything to do with promoting crime or violence.

The above video, while shot for CBS News a couple years back on the eve of GTA IV‘s launch, sums up the point nicely, even today. People don’t necessarily play titles like Dead to Rights, True Crime or The Godfather for the bloodshed; rather, their mature approach to gameplay, storytelling and dialogue. Then again, we’re only human too: The occasional freedom to run amok with a chainsaw doesn’t hurt – if it helps, keep in mind that it’s a constructive outlet for negative impulses, and much more effective stress relief than doing so in real-life. And that’s word to our big homie, Saint’s Row.

Michael Pachter is many things to many people: Gaming analyst, constant source of industry chatter and omnipresent font of wisdom for today’s media. (Not to mention erstwhile Game Theory contributor, but that’s another story…) However, as you may be saddened to learn, not everything about this outspoken business critic is as it seems. In an exclusive Game Theory original, we go behind the scenes of video show Pach Attack to expose the truth behind this shadowy figure and the sick, sad little double life that he leads.

Battered and bruised by plummeting sales, the video game industry staggers on, steadily losing ground at retail. When will we finally wake up and realize that things have irrevocably changed? From social network games to motion controls, iPhone apps, 3D games and cloud computing, the modern gaming business isn’t just virtually unrecognizable. It’s also being completely reinvented courtesy of new concepts like digital distribution and free-to-play titles with each passing day. In the first of a multi-part series, the field’s biggest names reveal just how long and hard the road to redemption remains, and why things will never again be the same.

Welcome to episode one of new PC and video game industry show Game Theory: It only gets better from here.

What the critics are saying:

“An intelligent and entertaining look at the games industry through some of the brightest minds in the business.”  -Sid Meier, Director of Creative Development, Firaxis Games

“The smartest take on the video game industry.” – Trip Hawkins, Founder, Electronic Arts and Digital Chocolate

“An absolute must-see!” – David Perry, CEO, Gaikai Inc.

“Asks all the right questions.” – Todd Howard, Executive Producer, Bethesda Softworks

“Finally a game industry web show that is well worth my time – features relevant topics, a smart host and all the right industry voices.” – Randy Pitchford,  CEO, Gearbox Software

The irony of discussing and debating issues of relevance to gaming these days is that there is no one single “video game industry” to speak of; you’re actually talking about dozens of individual and equally diverse businesses. Likewise, endlessly opining about when retail software revenues will cease slumping is all but irrelevant, as outside of specific tentpole AAA releases, the field’s mot promising growth areas (social, mobile, free-to-play, etc.) are all digital. But don’t take it from us: Just ask today’s most accomplished business leaders and game designers, who feel it’s high time that we finally woke up and realized that both the field, and fundamental playing habits, have permanently changed.

It’s a topic we explore in-depth here in the debut episode of Game Theory, which takes a deeper, more informed look at the topics and trends which shape today’s interactive entertainment sector. Offered alongside our eponymous new online magazine, which you currently have the pleasure of reading, the pair provide industry leaders with a more enlightened public forum through which to address today’s top concerns, including the magnitude of the changes currently rocking the interactive entertainment market. Their biggest immediate worry: Surviving the complete and utter transformation of a business that once was dominated by packaged goods to a new paradigm ruled by downloadable, online, social, community-driven and service-based offerings.

To put things in perspective, we turn to Electronic Arts founder Trip Hawkins, who sums matters up succinctly: “I’ve never seen a period like this – there’s so much disruption. The industry is really being turned inside out.” Maybe so, but as you’ll see in the above video, it’s also one poised to elevate new captains of industry, and potentially leave even the field’s most iconic firms capsized in its wake. Consider it a simple reminder – rather than focus on random fancies such as motion controls and 3D special effects, perhaps we’d all do well to remember that behind the scenes in 2010, there’s a much larger game at stake.

Motion controls such as Sony’s PlayStation Move and Microsoft’s Kinect for Xbox 360 are obviously one of the hottest (and potentially most overhyped) new video game trends in 2010, as many hope that they’ll expand the gaming audience even further than the Wii has already done. We recently connected with our friends at Fox Business for a live broadcast – from Nintendo’s 3DS press conference, ironically enough… hey, we don’t book ‘em -  to break down what these new motion-sensing systems potentially mean to gaming and the games industry as a whole. But as reporter Robert Gray astutely points out, also equally noteworthy is the role Apple’s devices such as the iPhone, iPod touch and iPad have played in helping open up the market to a wider fan base. The proverbial elephant in the room, the house Steve Jobs built may well be torchbearer for casual players and gaming neophytes into 2011 and beyond, given the fact that these portable devices are much more affordable and (unlike rivals) tend to travel everywhere enthusiasts do. For more of our opinions, just see the video link above.

Professional video game players (pro gamers) such as Fatal1ty and members of the PMS Clan can make a comfortable living doing what they love most: Playing video games. But professional gaming hasn’t been all wine and roses, with many leagues folding in recent years and the hobby struggling to be recognized both as a viable living and respectable sport. Not that we disapprove: It’s just that, given the current economic and cultural climate, North America has been slower to embrace the concept than Asian territories such as Korea, where playing StarCraft and StarCraft II is a national pastime that can lead to fame and fortune.

As many pro gaming fans will tell you, getting paid to play games isn’t all it’s cracked up to be, and an extremely tough (and often short-lived) way to make a living, so don’t quit your day job yet. Determined to dig deeper into the lives of those who ply their trade traveling the world, landing sponsorship deals and generally making a career out of competing for cash and prizes in gaming tournaments, we got the opportunity a couple years back to film the documentary Professional Gaming. Have a look at it and see if you’re ready to compete on the next level, and whether you think professional video game playing will eventually get the respect accorded to other athletics, let alone deserves to become recognized as an Olympic sport.

Determined to break into video game development or publishing and follow in the footsteps of giants like Activision, Electronic Arts and UbiSoft (OK, Zynga or Playdom) with your own take on Modern Warfare 2, Grand Theft Auto IV or Madden NFL? Then check out this step-by-step video walkthrough and tutorial, which takes you behind the scenes of the life of a game developer, and explains how hit games are signed, made and brought to retail. Warren Spector, Sid Meier and BioWare’s Greg Zeschuk and Ray Muzyka all weigh in with their thoughts on software publishing and start-ups, with expert-level hints and tips also provided by the likes of Infinity Ward, Sony Online Entertainment and others. Even better news for aspiring entrepreneurs: Since the video was published, new breakthroughs such as Apple’s iPhone/iPod touch/iPad App Store; social gaming networks like Facebook and MySpace; and free games that can be played in your Web browser have lowered barriers to entry even further. So what are you waiting for? Give Video Game Business 101 a whirl, then get out there and make your mark.