On the matter, Molyneux was only able to say, “I think it would be a great thing for this studio to work on.”

“I can’t say anything else on it – I would be killed to death.”

Microsoft has not revealed official plans to begin distributing full games digitally, but the company could easily be preparing for it.  Xbox Live Arcade games and Netflix movies, the company has been pushing digital distribution.  With the failure of HD-DVD, which Microsoft had been backing over Blu-ray, it may be that digital distribution is the way for them to go.

Some analysts even speculated that Microsoft only backed HD-DVD in order to keep the market confused until it could introduce digital distribution as a superior option.  Fable II may be the first game to test the waters, although it’s already experienced high sales on physical media.