>> "That's a great outlook for PC gaming, because free demos are going away, kids. If the companies won't pony up bandwidth, which they haven't seemed willing to do, the download sites are going pay or are disappering." <<
No, FREE demos will never disapear, because it's essentially REALLY CHEAP ADVERTISING, but they'll probably end up on p2p filesharing services where the cost is hidden by a swarm of individual ISP bills. (and the binaries can be digitally signed--so don't crow about "viri".)
Do you know how much a 100MB "marketing" demo actually costs to serve in terms of bandwidth? About 10 cents per download (at a tier1 ISPs volume wholesale rate). That roughly equates to ~$100 CPM (cost per thousand) for an average game demo. A traditional banner ad costs ~$20 CPM. The difference is that bluesnews gets paid the $20 by advertisers, but spends the $100 on hosting a "free ad" for the game publisher as a service to its fans. I know it's not THAT simple, but a game demo is _certainly_ more than 5 times as effective as a banner ad, and so its a steal for the publisher, but bluesnews doesn't get a cut of that... because how often does someone who downloaded a demo from blues later click a banner ON bluesnews to buy the full version? Almost never.
Anyway, blues manages to cover its bandwidth bill because the cost is spread out. And even if blues couldn't afford it, users paying ~$0.10 for a demo is still cheaper than a $5 demo CD! But, (assuming the infrastructure was inplace for micropayment) if people were open to actually paying for a demo to the extent of covering its transfer cost, you can be sure that the publishers would want gamers PAYING THEM! They would want distribution exclusivity so they could gouge a profit out of a test drive. At that point P2P would take over completely... just like how mp3s are free publicity and the bandwidth costs supported by its members (but different in that games aren't nearly as overpriced as music CDs are)