SAN FRANCISCO — Shoppers are buying an increasing amount of their music and movies via Web downloads. But video game sales remain firmly rooted in old-fashioned retail stores because many games come in enormous files that can take hours to download.

That's now poised to change.One company, OnLive Inc., showcased one such effort at the Game Developer Conference last Tuesday. The service promises to let players buy or rent the latest games on their televisions and computers and start playing within seconds.

The Palo Alto company says it will do for fast games, of the type playable only on discs, what others have done for relatively slow-paced titles such as "Tetris" or solitaire: store the games on its computer servers so they can be played over a high-speed Web connection.

OnLive, whose investors include Warner Bros., says it can do so by rapidly compressing and decompressing the files so the game acts as if it's on a computer or console.

The service, scheduled to launch this winter, has signed up 10 game publishers, including heavy hitters such as Ubisoft Entertainment, Electronic Arts Inc., Take-Two Interactive Software Inc. and THQ Inc.

Though the majority of games are sold as shrink-wrapped discs, analysts say a big chunk of the $40 billion game software industry will eventually shift online, changing the way players buy games. OnLive, for example, hopes to entice consumers with convenient, instant access to games and the ability to try them before buying.

"Companies that make disc-only games will be the dinosaurs of the future," said Billy Pidgeon, analyst with IDC.

Publishers are particularly keen on finding ways to improve their profit margins because the high cost of developing games hurts their bottom lines. Digital sales offer a potential reprieve by eliminating the cost of making and distributing discs. It also solves the problem of used game sales cutting into purchases of new games, since there would be no discs to resell.

Console manufacturers also know that the days of disc-based games are numbered. Microsoft has spent billions of dollars building its Xbox Live marketplace, which sells games and TV shows and rents movies to the 17 million players who log in at least once a month. Sony's PlayStation Network, which boasts 20 million user accounts, sells 180 games for download to its PlayStation 3 consoles.

"We've transformed from a disc-based company to a digital media company," said Susan Panico, senior director of PlayStation Network.

Sony, Microsoft and Nintendo make money by charging game publishers a royalty fee of about $7 for every disc sold for their consoles. For digital sales, console companies take a cut of the sale amount, typically 30 percent.

OnLive takes a different approach. It threatens to obliterate the traditional console business by giving players access to games without having to spend hundreds of dollars on new devices every five or so years. Instead, it would provide a small "MicroConsole," a device the size of a small paperback book that would hook into any Internet-connected digital television, and charge players a subscription fee.