Fundamentally, the Steam on-demand gaming platform is so successful because the service disintermediates middlemen and allows the platform developers to engage directly with customers. This strengthens not only the social networks but also the core platform.
Newell says the future will be "providing ongoing value." Once you start thinking from a service perspective, he continues, "It starts to help you understand the phenomenon that's out there." The core of Newell's argument is that a service allows "content creators to have a better relationship with their customers."
This is quite similar to what we see in the open-source world, when we talk about "community," in which software companies are directly influenced by their users, and users have the ability to take matters into their own hands, to make changes and additions that they need.
Of course, once a change is made, the customer doesn't want to maintain that code, and the vendor needs to take responsibility in some way or another--either by integrating the code into the mainline or providing modularity that doesn't break everything.
The conclusions that Newell draws from all of this is that digital distribution of games is valuable to consumers, enables developers make more money, reduces risk, and helps businesses become more manageable. He also says it's important to remember that these sorts of changes have come before in the entertainment business, as one form is replaced by another.
The conclusion I draw is that the dynamics of the software market have changed for everyone--from enterprise to games, the customer should be the first thought, not the last.