Digital distribution will outstrip traditional retail sales within three years and 40 per cent of companies within the games sector are unprepared for the rate at which this shift will take place, according to speakers at the upcoming London Games Conference.

Focusing on digital distribution and the new challenge for publishers and developers to create closer links with their customers, the event will be staged on October 27 at BAFTA’s headquarters in London.

According to Nick Parker of Parker Consulting, Sony and Microsoft will likely launch next generation gaming systems in 2013 and 2014. Because of this, from 2010 traditional box product sales will begin to fade, but he predicts that digital distribution and online gaming will potentially make up the shortfall during this period.

“For the first time ever, the games industry has a way of alleviating the pain that traditionally befalls it during generational decline, through online gaming in its many guises – it’s a genuinely exciting time for the industry and the London Games Conference is perfectly timed to discuss these opportunities,” said Parker.

Other sessions will include a discussion chaired by Edge editor-in-chief Tony Mott with representatives from Sony, Microsoft and Nintendo on the present and future of their online gaming services, and Sony’s former head of worldwide studios Phil Harrison on the demise of physical media and the businesses that will replace it.