NPD Group: Digital PC Game Sales Outpace Retail

Andy Chalk

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Nov 12, 2002
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NPD Group: Digital PC Game Sales Outpace Retail


The NPD Group [http://www.npd.com/] estimates that over the first six months of 2010, digital unit sales of PC games actually managed to surpass sales of boxed retail copies.

For a market that's been pronounced dead more times than I can count, PC gaming is doing a remarkably good job of hanging on for dear life. It's declining in the face of consoles and it's changing shape in the face of an increasingly connected society, but it just won't seem to go away. The ease and convenience of digital distribution is a big part of that, so it's not terribly surprising that unit sales of games in digital format have apparently pulled past those of boxed releases.

Over the first six months of 2010, the NPD estimates that digital sales in the U.S. hit 11.2 million units, versus 8.2 million unit sales at retail. Big Fish Games [http://store.steampowered.com] brought home the trophy for the casual market.

"One major finding from this latest report is that the 'big got bigger' in the first half of 2010, with both Steam and Big Fish capturing a bigger share of full-game PC games digital download sales than they did last year," said NPD analyst Anita Frazier.

Overall, however, unit sales of PC games for the first half of the year were down 14 percent, while revenues dipped 21 percent. "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," Frazier added.

It's worth bearing in mind that the figures for digital sales are only estimates based on "weighted and projected" consumer surveys conducted by the NPD. Both Steam and Blizzard told said in the past [http://www.gamesindustry.biz/articles/2010-09-20-npd-downloads-now-bigger-than-retail-on-pc] that the analyst's estimates "don't tend to have much reflection on reality." And although digital unit sales may in fact be ahead of retail, it's a safe bet that the popularity of Steam sales and cheap digital-only games mean that actual revenues still have a long way to go.



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Sebenko

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Andy Chalk said:
Overall, however, unit sales of PC games for the first half of the year were down 14 percent, while revenues dipped 21 percent. "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," Frazier added.
Well I certainty hope that's wrong.
 

Booze Zombie

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People decry PC gaming as some sort of slumbering God which the world forgot about, but it'll always be there.
 

Deathfish15

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How is this surprising when places like Gamestop don't carry a PC game shelf more than 3ft x 4ft and that contains 50% WoW games and expansions?

Honestly, there's more benefit for doing digital instead of retail, which follows

1) No lost installation disc and/or CD-code paper.

2) No dealing with annoying clerks badgering about pre-orders for another system all together.

3) No gas is wasted traveling to the store (greater the distance, the more gas used).

4) Actually able to find the game you're looking for.
 

Jared

The British Paladin
Jul 14, 2009
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Thats a sary thought. I really dont want them to have ammunition to get rid of my precious hardcopies...
 

SnipErlite

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There's so many benefits to using digital distrubtion (ie. Steam for most people) this doesn't really surprise me.

Although sometimes it's nice to have a reassuring hard copy in your hands. And it means you'll never hit your monthly download limit when you buy a new laptop =/
 

Ken Sapp

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Apr 1, 2010
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Deathfish15 said:
How is this surprising when places like Gamestop don't carry a PC game shelf more than 3ft x 4ft and that contains 50% WoW games and expansions?

Honestly, there's more benefit for doing digital instead of retail, which follows

1) No lost installation disc and/or CD-code paper.

2) No dealing with annoying clerks badgering about pre-orders for another system all together.

3) No gas is wasted traveling to the store (greater the distance, the more gas used).

4) Actually able to find the game you're looking for.
I agree. Digital distribution owes alot of its success to the failures and shortcomings of traditional retail distribution. Of course there is also the downside wherein if you do anything serious enough to get your account banned from a service such as Steam you will lose your entire library in the blink of an eye. But I have heard few horror stories about that happening and overall Steam offers a high quality service in my opinion.
 
Apr 28, 2008
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Perhaps more people would buy retail if they didn't put PC games on a single rack behind everything...

Anyway, that picture reminds me Civ 5 is coming out tomorrow. Better tell my family I'll be "gone" for a few weeks...
 

Therumancer

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Nov 28, 2007
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Well, one has to understand that this is industry tampering as much as anything. It's the DRM and similar things that are hurting PC gaming, and what sales that are going on are happening via digital distribution because the industry as a whole is trying to push things in that direction. Half the time if you go and buy a retail box game nowadays all it does is DL the game off the internet for you anyway.

Reductions in PC game sales in general probably have a lot to do with people not liking this and going to the consoles instead, where for the time being (despite a digital push) you still get a "disc in hand" that contains your game, and you can play most of those games without needing to be connected to the Internet at all (even for verification).

I suspect that if the game industry backed off on the digital push, and knocked off a lot of the DRM nonsense, you'd see something of a recovery in PC gaming given time. Right now the platform just isn't user friendly so to speak.

On some levels I think we've basically seen the gaming industry more or less murder itself to try and stop the pirates, because for all claims of "progress" being made after going after things like "The Pirates Bay", and digital services like STEAM, and various DRM stunts conducted by companies like Ubisoft, it's all come with what seems to be a steady reduction in people gaming on the PC, and while digital services might be doing a decent business to some extent, I think resentment is going to kill even that given time.

Such are my thoughts.
 

Aurora219

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Aug 31, 2008
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Oh, so they're not declining because nobody has any money then? Like me?

That's reassuring.
 

Morgan3rd

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Mar 16, 2010
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I'll tell you why PC gaming in retail is failing.

Go to a game-stop and see how many games they actually have, how much knowledge the employees have about different PC games. And the price compared to Steam.
 

Tom Phoenix

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JaymesFogarty said:
Well, good for them! But I'm not giving up my boxes and discs; nope!
Likewise. At least for me, a digital copy doesn't provide any sense of ownership.

The problem I have with these estimates is that game developers will look at them and then consider that to be reflective of worldwide sales as a whole. Yet, the PC retail situation in Europe is significantly better than it is in the US. This is partially thanks to the fact that european Steam prices are absolutely horrid, both beacuse regular (meaning, not counting special sales) Steam prices drop very slowly and beacuse of the direct 1:1 conversion rate between dollar and Euro (even though the Euro is worth more). I have been able to purchase games from a local online retailer for a fraction of the price they would have cost had I bought them on Steam.

Also, for all it's conveniences, let's not forget that digital distribution is hardly flawless either. Digital copies cannot be resold (although retail copies of games that use Steamworks cannot be either), nor can you make backup copies. There is also the issue that should you lose access to the internet for a period of time, you have no access to the games you don't have downloaded (or even those that you do, provided you get caught outside of Offline Mode). Last, but not least, should the company controlling the digital distribution platform ever go bankrupt, there is little guaruantee that you will ever see the games you bought through it ever again (people mention all the time how Valve said that they would keep the servers online for a short time for people to donwload their games, but that is pure fantasy....should Valve ever go bankrupt, such a thing would be completely outside their hands).

Don't get me wrong, digital distribution has it's conveniences and I think it is a great alternative means of distribution. But quite frankly, I think it would be terrible if it completely replaced retail.
 

Jamash

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Jun 25, 2008
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I wonder how much the figures stand up to scrutiny and how the two would compare if they compared profits made from the sale of games rather than units sold.

I've noticed Steam still charges more for new releases than retail shops, even for games which require Steam to play.

I personally never buy new releases from Steam, I always buy the retail disc which is £5-£10 cheaper, although I do buy a lot of games from Steam when they're reduced by 50%-75%.

Steam may shift a lot of units, but they may make less money than shops on new releases because people may only buy from Steam in the sales, but buy new releases from shops.

Also, how do the sales figures work for retail disc games which require Steamworks to be installed... who gets the credit for the sale, the shop, Steam or does the game get counted twice (once for the sale of the disc and once for the Steam activation)?
 

Rigs83

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Yet GOG.com [http://www.escapistmagazine.com/news/view/103601-GOG-com-Closes-its-Digital-Doors] is no more.