Back in the early days of Xbox 360, Microsoft had legitimate fears that Xbox Live Arcade would destroy the console industry and its retail-driven roots.
The concern was that lower price points and digital delivery of easy-to-play games would shake up the traditional retail model of high-priced games sold through traditional video game stores.
XBLA creator Greg Canessa said as much in a recent interview with IGN, when he said: "There was a legitimate fear that Xbox Live Arcade was going to cannibalize retail sales and completely destroy the console industry."
Luckily for all this wasn't the case, although it could be argued that retail has struggled as digital downloads have become increasingly popular. Might XBLA have been the beginning of the end? Time will tell on that one.