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The video game industry is being turned inside out as users migrate online and embrace new platforms from the iPhone to Facebook. Business models are evolving from $60 console games to free-to-play games where gamers play for free and pay as they go for virtual goods such as better weapons.

Scott Steinberg, who heads the new game site Game Theory, has put together a slick video with some of the luminaries of the industry, from Will Wright to Lorne Lanning. The game industry leaders say that all parts of the industry are changing at the same time. Is the core game industry headed for doom?

Here’s Steinberg’s own commentary from the Game Theory site, and see the video below:

The irony of discussing and debating issues of relevance to gaming these days is that there is no one single “video game industry” to speak of; you’re actually talking about dozens of individual and equally diverse businesses. Likewise, endlessly opining about when retail software revenues will cease slumping is all but irrelevant, as outside of specific tentpole AAA releases, the field’s mot promising growth areas (social, mobile, free-to-play, etc.) are all digital. But don’t take it from us: Just ask today’s most accomplished business leaders and game designers, who feel it’s high time that we finally woke up and realized that both the field, and fundamental playing habits, have permanently changed.

It’s a topic we explore in-depth here in the debut episode of Game Theory, which takes a deeper, more informed look at the topics and trends which shape today’s interactive entertainment sector. Offered alongside our eponymous new online magazine, which you currently have the pleasure of reading, the pair provide industry leaders with a more enlightened public forum through which to address today’s top concerns, including the magnitude of the changes currently rocking the interactive entertainment market. Their biggest immediate worry: Surviving the complete and utter transformation of a business that once was dominated by packaged goods to a new paradigm ruled by downloadable, online, social, community-driven and service-based offerings.

To put things in perspective, we turn to Electronic Arts founder Trip Hawkins, who sums matters up succinctly: “I’ve never seen a period like this – there’s so much disruption. The industry is really being turned inside out.” Maybe so, but as you’ll see in the above video, it’s also one poised to elevate new captains of industry, and potentially leave even the field’s most iconic firms capsized in its wake. Consider it a simple reminder – rather than focus on random fancies such as motion controls and 3D special effects, perhaps we’d all do well to remember that behind the scenes in 2010, there’s a much larger game at stake.

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