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Microsoft feared XBLA would "completely destroy the console industry"

Internal concerns that cheaper digital sales would harm traditional stores.

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In the early days of Xbox Live Arcade, Microsoft had a real fear that it would "destroy the console industry."

The concern was that lower price points and digital delivery would shake up the traditional retail model of high-priced games sold through bricks-and-mortar stores.

"There was a legitimate fear that Xbox Live Arcade was going to cannibalize retail sales and completely destroy the console industry," XBLA creator Greg Canessa told IGN.

"That was actually a quote I got from one of the internal folks."

Xbox Live Arcade was one of the big success stories on Xbox 360, with well over 700 games released via the digital marketplace.

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