Electronic Arts (Nasdaq: ERTS) is finally looking like it has figured out this digital distribution thing.

The video game giant's third quarter saw a 47% increase in GAAP digital sales, while packaged goods declined by 9% and EA nearly eradicated its distribution deals for other people's games.

Distribution titles in fiscal year 2011 consist of two Rock Band titles from Viacom (NYSE: VIA), another Viacom title in the upcoming movie tie-in Rango, and All Points Bulletin from the now-defunct indie studio Realtime Worlds. The Rock Band development team is now privately operated and Realtime Worlds entirely liquidated, giving EA all the less obligation to keep distributing third-party games.

The future is clearly digital, and based almost entirely on projects controlled by the studio from mop-top to snakeskin boots.

Since a lot of the digital sales are structured as subscriptions and accounted for on a six-month schedule, GAAP results look weak. Add those deferred revenues back in, and discount one-time restructuring charges, and EA made a tidy $0.59 net profit per share in the holiday quarter.

Most of the deferred sales come from the Microsoft (Nasdaq: MSFT) Xbox 360 and Sony (NYSE: SNE) PlayStation 3 consoles, both of which pack hard drives and generally encourage downloading games, rather than hauling disks home from your local game store. The Nintendo (OTCBB: NTDOY.PK) Wii, on the other hand, doesn't have the same storage advantages, and thus represents a much smaller piece of EA's digital pie.

It's about time that somebody hit EA with a digital cluebat. Widespread broadband access combined with the attractive distribution costs (read: nearly none) in a digital distribution model make this the obvious -- and maybe only -- way forward.

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Fool contributor Anders Bylund holds no position in any of the companies discussed here. Microsoft is a Motley Fool Inside Value pick. Nintendo is a Motley Fool Stock Advisor choice. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.