Digital Distribution Growing But Still a Small Slice of the Pie

[Andy Chalk]

Digital Distribution Growing But Still a Small Slice of the Pie

New numbers from the NPD Group show that despite the popularity of PlayStation Network [http://www.xbox.com/live/] and digital distribution services for the PC, only a small number of users regularly download digital content.

NPD Group [http://www.microsoft.com] says only 18 percent of Xbox Live Gold users regularly download content. The PlayStation Network fares even worse; despite being free to PlayStation 3 owners, only ten percent of its users are regular downloaders.

Somewhat surprisingly, digital distribution on the PC, which some observers feel is key to the platform's future success, is doing no better. Despite the advent of digital sources like RealArcade [http://store.steampowered.com/].

While the NPD didn't nail down specifically what it meant by "regular" downloading, it certainly sounds as though digital distribution isn't yet the game-breaker it's sometimes portrayed as. Aaron Greenberg described digital distribution as the "fastest-growing portion [http://www.escapistmagazine.com/news/view/88637-Digital-Distribution-Is-Microsofts-Fastest-Growing-Game-Business]" of Microsoft's game business in January but it would appear that some habits, including the habit of walking into a store with shelves, staff and products you can hold in your hands, do indeed die hard.

Source: Gamasutra [http://www.gamasutra.com/php-bin/news_index.php?story=23879]


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[KDR_11k]

Yeah, this is well known, it's why Iwata said he can't imagine a digital-only game market within the next few years.

 

[Anachronism]

Honestly, I think it's only a matter of time before the entire market goes digital. Look at what happened to the music industry: it's basically controlled by iTunes and Nappster now. Ok, there are people who still buy CDs (me among them) but they're definitely a minority. And, while I prefer to have a hard copy of the game, digital is more convenient and more cost effective for developers. Give it a few years.

 

[BrotherRool]

The PSN being free would lower the percentage, not raise it because it means even people who don't want it or aren't comfortable with the internet have it. I'd've expected it to be a lot lower than 10%. On the other hand if you're going to pay for Live you're 1. used to paying and 2. choosing to bloomin' well use it.

 

[Andy Chalk]

Honestly, I think it's only a matter of time before the entire market goes digital. Look at what happened to the music industry: it's basically controlled by iTunes and Nappster now. Ok, there are people who still buy CDs (me among them) but they're definitely a minority. And, while I prefer to have a hard copy of the game, digital is more convenient and more cost effective for developers. Give it a few years.

A few years, sure. I don't think anyone is questioning the potential of digital. It's the speed of adoption, or lack thereof, that seems to be catching people by surprise. One of the big reasons I won't have anything to do with it stems from something you mentioned: It's much more cost effective for developers than the traditional retail route. So why aren't consumers seeing any of that savings reflecting in digital pricing?

 

[destroyer2k]

Well maybe digital distribution would be more popular if they would make more pleasent for EU (more cards supported I think that valve wouldn't die if they would support debite card (maestro)).

The fact is if I go by age 15-18 can't buy games digital becouse they don't have credit card.

 

[thenumberthirteen]

The PSN being free would lower the percentage, not raise it because it means even people who don't want it or aren't comfortable with the internet have it. I'd've expected it to be a lot lower than 10%. On the other hand if you're going to pay for Live you're 1. used to paying and 2. choosing to bloomin' well use it.

Exactly it's a self selected group. How many people here use PSN or XBL to buy things? I mainly use PSN to download demos and trailers, but I have bought games like flOw, and Flower.

 

[jamesworkshop]

NPD is north America only so I don't pay much attention to them

 

[Andy_Panthro]

Well I'm a big fan of Good Old Games [http://www.gog.com/] and I'd love it if their "no drm" stance would carry over to the rest of the digital download services (and regular boxed games too).

I expect the other problem is price, often digital downloaded games will cost more than the price you would pay in a shop. Digital downloads should surely be cheap and easy to obtain (which is why I like GOG), considering they remove several cost factors.

 

[PhoenixFlame]

Cost and convenience are probably the two barriers to a larger and more persistent proliferation of digital distribution. As an analog, you could possibly point to iTunes, MP3s, and CDs. While the whole Napster thing and piracy did factor into this stuff, it wasn't until you could buy tunes for less than a dollar and take them with you whereever you went in a reasonable amount of download time that it got popular.

As long as games stay the same price digitally distributed and it takes ages to download them (not to mention not being able to take them with you), digital distribution won't really take hold.

 

[Jumplion]

Honestly, I think it's only a matter of time before the entire market goes digital. Look at what happened to the music industry: it's basically controlled by iTunes and Nappster now. Ok, there are people who still buy CDs (me among them) but they're definitely a minority. And, while I prefer to have a hard copy of the game, digital is more convenient and more cost effective for developers. Give it a few years.

The thing is though, things like iTunes and such offer practically 10 full libraries of songs while digital distribution for games tend to only have those downloadable indie games and a few full games that you could download somewhere.

Personally, in my HUMBLE opinion, Digital Distribution will never fully take over the industry, especially not the gaming industry. All Digital Distribution can do is compliment Physical Disks with video games.

The thing is, DD is only limited to how great people's connections are. There are still hundreds of places around the world that have poor internet connection, and the thought of needing an internet connection to play a single-player game is quite stupid.

With physical media, like DVDs, Blu-Rays, and the beyond, it grows as much as the hardware grows. There's a certain disk of which it's name escapes me, but it's supposed to hold over 500GB of data on a single layer of it. That's quite phenomenal, and developers could exploit it in any way imaginable.

So, in short, Digital distribution will never overshadow physical media, but it will damn help it and they can certainly exist together at the same time.