Those "brick-and-mortal" retailers aren't going to go down without a DLC fight, whatever Farrell says. Just this year, GameStop started selling DLC in its stores for both Sony and Microsoft consoles. Far from admitting defeat at the hands of digital distribution, GameStop's efforts look to us like a smart move; the company can tap into a market of gamer that can't easily access DLC and cash in on non-gamer consumers that want to buy their loved ones DLC as a gift.

Dan Connors, CEO of Telltale Games -- a company that made its mark on the industry via episodic, downloadable games -- doesn't believe that retail is going away any time soon.

"The retail channel is still very powerful," says Connors, "and [through it] you can increase the initial size of your installed base. Of course, the challenge will be converting those initial purchasers into ongoing customers over time."

Connors agrees with Farrell's position on "hooking" gamers with a lower price point and then rolling out DLC over time for as long as it sells, but he cautions that the model may not wind up being the future of games and DLC.

"There is still a lot of testing the water to figure out how the business model should work and what level of investment should go towards DLC versus the initial product," Connors says. "There seems to be two camps: one where DLC drives ongoing sales of the initial product, and one where DLC generates revenue on new content. I think in the case of AAA titles the initial investment is very large, and the DLC investment is incremental. As long as that's the case, the focus will be on generating sales of the boxed product."