Digital Distribution Pulls Even With Retail

[Andy Chalk]

Digital Distribution Pulls Even With Retail

Digital distribution is continuing to grow in leaps and bounds, with NPD numbers showing that "full game digital downloads" in 2009 were almost on par with regular retail purchases.

That the future is digital has never really been in doubt. What has been debated is how long it would take for digital distribution to achieve something close to equal footing with retail as a distribution channel. Services like Steam and Direct2Drive have huge followings but the general feeling seemed to be that, in the foreseeable future at least, retail would remain king.

But the NPD Group's [http://www.npd.com/] "PC Games Digital Downloads: Analyst Report" for 2009 suggests that things may be happening more quickly than anyone expected. Over the course of the past calendar year, the number of games purchased via digital download almost matched those purchased at retail, 21.3 million "full game digital downloads" versus 23.5 million physical units purchased at retail.

The report divided digital game sellers into two groups: "Frontline digital retailers," which focus on mainstream titles that are also sold at retail, and "Casual digital retailers," which lean more toward "smaller, easily accessible games" that often make use of trial periods or advertiser-based models. Based on unit percentage share, the top five digital sellers in each category are as follows:

Top 5 Frontline Digital Retailers


Steampowered.com
Direct2drive.com
Blizzard.com
EA.com
Worldofwarcraft.com


Top 5 Casual Digital Retailers


Bigfishgames.com
Pogo.com
Gamehouse.com
iWin.com
Realarcade.com


The natural assumption is that the continued growth of the casual market would drive the increase in digital sales, but the NPD said that frontline retailers actually increased their share of the market "at the expense of the Casual Digital Retailers." Casual retailers are being hit by the increasing number of free casual games available through social networks like Mafia Wars [http://www.facebook.com] than core gamers.

"The popularity of social network gaming increased from Q3'09 to Q4'09 as 4.8 million more people played games on a social network in the U.S.," said NPD analyst Anita Frazier. "This demonstrates how consumers can now experience casual types of games through myriad vehicles, broadening the competitive landscape."

It's no great secret that I prefer physical copies of games to digital. I like boxes and manuals and discs and something I can put on a shelf and gaze at lovingly in the months and years to come. A lot of other people apparently 2017 [http://www.escapistmagazine.com/news/view/100921-Sony-Consumers-Prefer-Discs-Over-Digital] may very well get here a lot quicker than anyone expected.


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[crotalidian]

OK Thay have pulled level in volume. but how much of that is downloads of World of Goo, or the Original XCOM. these cannot be purchased from Gamestop (unless you know an AWESOME Gamestop!) so I cant see it being all that indicative. I think you may see with SC2 (next HUUUGE AAA Title) that despite a large volume of digital downloads. Most will be sold as physical copies. until aAAA title is selling equally on both platforms I dont see these as on a level footing

 

[UnravThreads]

Are Blizzard and WoW not the same effective site now? In the EU, at least, all purchases for WoW are done through the Blizzard EU site, and I can't imagine it being too different in the US.

EA.com surprises me, although I do wonder if that's mainly down to The Sims.

 

[Wolfram23]

Yeah not surprising. More convenient, more offers, and often better discounts. The only gripe I have with digital is that you don't get a physical manual... I like those.

 

[microhive]

So once they surpass the retailers they can potentially simply stop selling physical copies and kill off the retailers in order to get some more money for each copy. That's what I'd do to be honest.

 

[AndyFromMonday]

The moment they start selling games at the correct price(fuck 1 dollar = 1 euro) I will start buying from steam again. Up until then they can go fuck themselves.

 

[ZombieGenesis]

Until digital distribution realises that the point is 1.5x more valuable than the dollar I will not be buying anything digitally for £60 that I can get for £20 in the supermarket.

 

[Jared]

I can see it growing, as, of course it would. But, despite everyything, I will always go Retail above and beyond if I can help it!

 

[Nalgas D. Lemur]

It's no great secret that I prefer physical copies of games to digital. I like boxes and manuals and discs and something I can put on a shelf and gaze at lovingly in the months and years to come. A lot of other people apparently feel the same way [http://www.escapistmagazine.com/news/view/100921-Sony-Consumers-Prefer-Discs-Over-Digital].

I do prefer them, too, and I have more than one shelf full of games. If it were up to me, I'd continue adding to it. I don't prefer physical copies enough to pay twice as much for them, though. Occasionally a boxed version of something will be cheaper on Amazon or somewhere like that in a sale, but at least for PC stuff, being able to keep my average price per game under $10 beats having even more stuff to arrange on my shelf. I'm certainly doing my share to contribute to Steam catching up to retail, just because they give me so much more for my money.

 

[Souplex]

This is it children. The beginning of the end of gaming.

 

[BboyTeddyBear]

mm...not sure if i'm a big fan of this or not.

on one hand i'm big on supporting discless stuff and online copies, but the problem with that that is something i always iterate to my friends is later on down the road how the companies will deal with their content. I always give the chance that something excessively drastic happens. either the distro companies go down, a hacker compromises the service, the servers for w/e reason go down, the network companies get roped into something like legal stuff, or anything extreme. At that point you are Sol unless you already have the game localized and the game is free from it's distro service's chains.

so while i'm happy i'm a bit concerned if things go without physicals.

 

[Deofuta]

This is it children. The beginning of the end of gaming.

Umm how so?

 

[steamweedlegoblin]

This is no surprise to me. Major retailers neglect the PC market all the time. My local Gamestops don't stock PC games anymore. All of the shelf space is reserved for console titles. Even larger electronic stores in my area like Best Buy shove PC games in a tiny shelf at the back of the store. And if you're looking for a specific title, you'll be lucky to find it as the selection of titles is piss poor.

Digital is where it's at for PC gaming. I've known this for a while now. If retailers would still cater to the PC crowd like they used to, then I might still buy PC games at retail. But they don't. Retail is all about consoles. I prefer gaming on the PC, especially when it comes to multi-player. And for that, Steam is reaping the benefits of the retailers' neglect.

 

[Andy Chalk]

these cannot be purchased from Gamestop (unless you know an AWESOME Gamestop!)

I have boxed versions of World of Goo, Plants vs. Zombies, Braid, Trine and more, and I never go to GameStop. The truly hardcore make it happen.

 

[rembrandtqeinstein]

The problem is that boxed games are just a dvd case nowadays and the manual is a PDF.

Here is how boxed games used to look:

Cloth map, big box with art, press printed manuals on good paper, coin.

Something like that is worth owning and displaying. For current games all the goodies are relegated to collectors editions which cost 50 to 100% more than the game itself for the fancy box (that doesn't fit on your shelf) and a pile of plastic crap.

 

[LewsTherin]

Well, a couple of stores in my neck of the woods have altogether stopped stocking PC games, so I can believe Steam is catching on as a real alternative, or even replacement. Oh, and screw you, Gamestop.

 

[Delusibeta]

Not really surprising, since most retail stores are phasing out PC games. Although generally speaking hard copies (via websites such as Amazon and Play) still tend to work out cheaper than digital downloads. That all said, predicting digital downloads as the cause of the death of video games is simple tin-hat talk. Especially for PCs, where there's more digital distributers than there are consoles.

I am surprised that Blizzard has grabbed two spots on the Official Big Five, however.