It almost felt like I had entered an alternate reality when I read that certain retailers in the UK and Netherlands were actually refusing to sell Sony’s new PSP-Go handheld gaming system. It was like I had stepped into Bizzaro World, a world where Dane Cook was actually funny, Papa Roach actually wrote wholesome worthwhile music, and people got thin by eating potato chips. Alas, it was the same wailing tones of Papa Roach and the sickening feel of the chips I was eating that brought me back to reality.

Chances are, if you have a X-Box 360 or a PS3, you are likely to have encountered their respective online marketplaces, the X-Box Live Arcade and the PSN – where you can find smaller, more casual games and downloadable addons and expansions at cheaper prices than retail. Chances are if you’ve done PC gaming in the last few years you’ve also encountered Steam, the downloadable PC game marketplace and content manager by Valve – with games, guess again, at cheaper prices than you would find at retail (or find at retail at all, given some outlets’ decisions to not stock many PC games). And if you’ve bought a game from one of these platforms, then congratulations! You’ve joined the thousands that are discovering the DLC (Downloadable Content).

Already, even full-scale game are making it onto online marketplaces. EA re-released their racer, Burnout Paradise onto the PSN and X-box Live Arcade and saw great sales. Console games in a more casual or indie niche have also found succor in these marketplaces – it can be seen by some downloadable games that are now popular on the consoles, such as Fat Princess, Castle Crashers, flOw, Mega Man 8, and Braid. For many in the PC gaming world, Steam has been touted as the savior of the PC as a gaming platform, revitalizing interest in PC gaming and letting smaller developers have access to the marketplace without having to worry about marginalized retail sales.

Is this method becoming prevalent? Not quite. For most console games retail is still where most of the sales are being made.  But it’s earned itself a niche, and gamers who know what these marketplaces can offer are flocking to them to find new products. If you can plug your console into the internet – even on wireless – you can find what these places have to offer. Larger game developers aren’t as keen, but those who develop for multiple platforms are still oft to sell their PC versions on Steam, recognizing the power it has.

So let’s get back to the PSP-Go and see the other impact of this disputed and tenuous march towards a possible DLC age. The PSP-Go is a new take on the Playstation Portable handheld device – it does not use the UMD format (mini-discs for games and movies) that other PSP models use. Instead, it is Sony’s experiment to create a handheld platform that downloads material exclusively from PSN, allowing you to play your purchased titles anywhere. Among gamers, the main argument is that many already have numerous games on UMD. Others point to the ridiculous price tag – $250 US – as a reason not to invest in it.

However, if you followed my links earlier, you’ll find that the retailers have a very different reason why they are refusing to stock the PSP-Go – and it’s not to give “Power to the Players” (maybe need to find a trademark symbol or link for this – this is Gamestop’s new ad phrase). The retailers refusing to stock the PSP-Go don’t want to sell it because it doesn’t encourage consumers to come back to their store to buy UMDs – why would they if everything is online?

This is perhaps the more insidious and dangerous implication of a move towards a disc-free gaming universe – retailer backlash. Why sell a console that when you can’t sell the games that come with it?

Of course, retailers only have themselves to blame if this is a key reason why some manufacturers try to move away from retail and into DLC – after all, it’s the new, disturbing trend among retailers of trading in games and marking them up for retail again and cutting publishers out of the used product profit (a practice popularized by EB Games/Gamestop that has to date cheated developers, producers, and publishers out of millions of dollars in potential sales) that is causing the people who actually make the video games to question why they need to go to them when there are different market choices now available to the consumers. For god sake, even Toys-R-Us is doing trade-ins and used sales now.

Thankfully, the trend with the PSP-Go is not universal, and even a pawn shop like Gamestop is still stocking the product.  But imagine if Sony or Microsoft or Nintendo tried to sell a full-sized console with DLC only for their “next-gen” product. Would the same thing happen? (Fun fact: there is a company developing a console just like that, with a 3G-based DLC management system, but it is being focused in non-North American markets. If you have some free time look up the Zeebo)

Perhaps it’s a case of “too good too soon.” The market is definitely moving towards DLC, but when we as consumers will be ready to accept it is a very different story. And when the consumer accepts the format, the retailers will have to.