Digital! I can't wait for next gen -- day 1 digital downloads is going to be AMAZING!
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What games are going be available for download? Will some of them be free?
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This too. Day One downloads will be the shit.
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You think for some games there will be heavy traffic though that slows it down tremendously? GTA V and Pokemon X and Y are too good examples that were and probably will be heavily congested if you get them digitally. Grand Theft Auto 5 had some significant issues with the Digital version as well. http://www.videogamer.com/ps3/gta5/news/gta_5_psn_download_performs_worse_than_blu-ray_release.html
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I think that the Day 1 traffic will be reduced in a couple of ways. First, the new Xbox LIVE cloud with a few hundred thousand additional servers should help to reduce the load. I can't speak to PSN as they have avoided discussing upgrades to their cloud. But second, pre-downloading will make things much more convenient -- you preorder a few days ahead of time and the game simply doesn't become "unlocked" and available to play until midnight Day 1. That way even people with slow download speeds will be able to play immediately at midnight :-)
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I had forgotten about the X1 additional servers, but then again I got a PS3 as my new "next-gen" console so I'm out of the loop on the X1 and PS4 for some time now ha. Wow you can pre-download? That's a pretty nice feature, if you're really set on a game you can do that a month early and exactly at midnight you can make the immediate transfer to your system, I hadn't known about that.