NPD released a report today saying that the PC gaming market is now 58% download sales, though only 43% of revenue — mostly because retail prices are higher. Both retail and download sales are dropping though — revenue is down 21% and unit sales down 14% over the last year.
“The overall decline of PC games when combining sales via both digital downloads and physical retail sales is impacted by the expansion of social-network gaming as well as the continued expansion of free game options.” NPD analyst Anita Frazier said…
Digital game downloads beat retail store sales | Gaming and Culture – CNET News
Interestingly, the top five digital retailers for AAA show the power of using connectivity in a strong fashion: Steam’s on top of the list, and they by default install a startup-launching login widget; two of the top five are Blizzard and worldofwarcraft.com; and the other top five entries are EA.com and Direct2Drive.com. (The list of casual downloadable leaders is quite different).
Retail has been pushing used game sales for quite a while in order to drive revenue, of course, which by and large game publishers have not liked much (supposedly last year John Riccitello of EA compared used game sales to piracy). It wasn’t very long ago that Best Buy announced they were moving over to that model.
The downside to this may be that used game sales may start running into legal issues, if the battle around shrinkwrap licenses and first-sale doctrine for software continues the path of the recent 9th Circuit Court decision — basically, it said that software publishers can indeed say that you don’t own software, but instead just license it; and therefore can block you from resale.
All in all, the shift to a fully digital future is well underway, and I would expect retail revenues to keep declining. Some are happy about it, such as this guy:
And why not? Digital music can be played on any device. Electronic books can go anywhere the user goes. And streaming movies on demand is far more convenient than mailing discs back and forth.
- “The end of software ownership–and why to smile”, CNet
Others will be less sanguine about the idea that their investments can be remotely deactivated, have curtailed legal (and illegal) uses, or simply obsolesce out of being usable when the licensing authority shuts down its servers.