News Article

Digital Game Sales Growing 33% Year-on-Year in US and EU

Posted by Andy Green

Analysts reveal new data at GDC

The digital distribution of games has grown substantially in recent years with an increasing number of titles finding themselves in the Nintendo eShop, PSN, Xbox Live Arcade and Steam.

Analysts from NPD, iResearch and Digi-Capital presented data at this week's Game Developers Conference on the state of the global digital game market and it's certainly picking up at a staggering rate. GamesIndustry International was on hand to report the findings.

In the US and Europe, digital game and downloadable content sales are growing at a rate of 33% year-on-year as gamers begin to adopt the new method of consumption.

Liam Callahan, games industry analyst from NPD, revealed the US is the biggest Western force in the download market, forking out $5.9 billion on content - accounting for a massive 40% of total spend on video games. The UK spends $1.7 billion, Germany $1.4 billion and France $1 billion.

Astonishingly, in 2012 the retail market for new games makes up less than half of the total $14.8 billion spent on gaming in the US. Retail games make up 48% of the market, with used games (11%), digital games and DLC (15%), mobile game (14%) subscriptions (7%), social network gaming (4%), and game rentals (1%) making up the rest.

New retail game sales fell over 22% from 2011, and used games dropped 17.1%. Meanwhile, digital full games and DLC combined grew 33.9%, with subscriptions increasing by 12.9% and mobile games gaining 10.4%.

The market is definitely shifting, with more new entrants such as mobile and tablet gaming entering the environment. Interesting, NPD found each particular nation has its own favourite medium for video games. For example, UK gamers like to play on home consoles, while the French prefer handheld systems like the 3DS. Germany prefers PC gaming, and those in the US seem to be adopting mobile and tablet platforms more than any other country.

Mobile gaming is definitely on the increase, however the amount of people willing to pay differs in Europe and the US. While 40% of Europeans will pay for their mobile games, only 27% of those in the US will do the same. Free-to-play is a genre many companies are exploring, with Crytek - the German developer behind the Crysis series - in particular claiming it is working towards offering all of its future titles for free, generating revenue with additional content.

China's gaming market is almost exclusively digital, therefore the download market is maturing in this region. The impact this is having on the global video game market is massive.

Tim Merel of Digi-Capital projected that Asian games could dominate the global online and mobile games markets, if trends continue, and expects many Western companies to carry on merging with and acquiring Asian developers in the coming years. He said while the US tends to consume console and subscription-based games, those in emerging nations like China and Brazil are more open to mobile, social, and free-to-play MMOs.

Digital downloads are definitely playing their part in the evolution of the video game market. Check out our recent talking point on the download or disc dilemma faced by many gamers, where we take a look at the advantages and disadvantages of digital downloads.

Have you switched to digital over retail purchases, or do you like to mix it up a bit? Let us know in the comments section below.


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User Comments (19)



BrightBeing said:

The Wii U is the first console I've gone all-digital with. With a cheap 1TB external drive, I can keep all the retail games I buy right at my fingertips on the Gamepad at all times. The only down side is that pricing can sometimes be out-of-whack compared to retail. I've been using Steam on my PC for years for all my games there. I haven't gone digital with movies yet because BluRay has much higher quality and features than digital equivalents.



Peach64 said:

My top five games of 2012 were Fez, FTL, The Walking Dead, Dishonoured and XCOM, and three of them were only available as digital releases. I don't have a PS3, but another great game, Journey, was the same situation, so all the sales of those games are going to increase the percentage for digital.

For PC gamers, competition is high amongst digital retailers now, so they're all trying to win customers were great deals. Just look at the insane offers you had for Bioshock Infinite recently. For considerably less than the price of a new Wii U game, you could get Bioshock Infinite, and they were throwing in a free copy of the original Bioshock, a free copy of XCOM, plus your choice of another free game out of Bioshock 2, Civ 5, Darkness 2, Spec Ops: The Line and Mafia 2.

I would LOVE to go fully digital on my consoles too, but there's a lot of work that needs to be done. Microsoft finally seem to be getting there with their sales, but we still don't know if we'll be able to transfer our purchases to the new hardware. Nintendo have even more to do. I buy a lot of Virtual Console stuff on the Wii and 3DS, but I won't be buying full retail games until they sort their infrastructure out with unified accounts and the ability to download my games onto any new console I buy.



Dpullam said:

This doesn't surprise me in the slightest. There are quite a few people who would rather buy digitally rather than drive to their local video game retailer. If digital game distribution becomes smoother in the future I will most likely be doing the same.



sdcazares1980 said:

It's become a reality. I'll still use physical discs to rent, but if I want to buy, I'll digitally download them; let's face it, you don't get a lot in return if you resell the game.



SetupDisk said:

3DS is all digital. As for Wii U it's more of an availability in store issue.



steamhare said:

Yet publishers still seem to track sales exclusively via hard copies...

I'm beginning to suspect "disgraced" executives are wandering off with phat loot.



SpaceApe said:

Digital is just so much better for me. I just recently purchased the digital version of Most Wanted U. I am positive many others have gone the digital route as well.



Mathieran said:

I really like digital, but I buy whatever is the best deal. I've got quite a few buy 2 get one 1 free deals from Target. Amazon also has had some good deals. But the convenience is digital is great. It seems to run better, plus I've noticed the Wii U makes a lot of noise spinning discs. I find myself getting annoyed by it if I'm watching Netflix or something and take discs out. I can't figure out why the disc is always spinning even if I'm not playing a game?



cornishlee said:

Like others have said, I'm happy to go all digital but we need greater competition before that becomes a full reality for me on the Wii U. I'm still hoping that Nintendo will start allowing retailers to sell download codes before the end of the year.



ToxieDogg said:

Like I've said before, I'll happily download a game I can't get a physical version of, and have already downloaded well over 200 indie games and Virtual Console releases that never appeared in Europe to begin with, but (as with Lego City Undercover on Wii U) why would anybody want to clog up their hard drive with a 22gb download when you can buy the physical version cheaper anyway? Plus, the more you clog up your hard drive with big downloads, the sooner you'll have to buy another one....seems like some people have more money than sense to me.



Qeuix said:

I want to go all digital with the 3DS, but the only problem is the amount of space in the SD card it can support though, but I am really going for all digital on the Wii U.



steamhare said:

@ ToxieDogg
Day 1 buyers in the US pay the same for each, but get 10% back via Digital Deluxe promo. They also don't have to pay for gas, and if they have uncapped internet don't pay extra for the download either. For some people digital makes good sense.



Haxonberik said:

I still prefer discs due to how good it feels going through a growing stack of copies, the ability to borrow/trade games and the fact that my internet is sluggishly slow. Next month I'll have my first real step into donwload with steam on my new laptop.



iphys said:

I found I spent more time playing my WiiWare games than Wii discs, and they were cheaper, so I tend to buy more downloadable games since making that realization. When it comes to retail games, I usually only buy them if there's a sale, and I'd rather buy physical copies so I can sell them used if they aren't keepers. I usually don't find sales on digital copies of retail games, and I don't want to be stuck with them forever and unable to recover any money from them if I don't like them.



ToxieDogg said:

@steamhare Fair points, but I don't have to pay for gas either, I just get the games delivered via online retailers, usually with free shipping/postage. I don't think we get the day one 10% back though like customers in the US....there is a point system here for Wii U Premium owners (nothing for 3DS owners though ) but the amount of points you get back for digi downloads pales in comparison to the sheer amount of money you save by just buying the physical copies online. Just seems to me that in the long run many people end up paying more for game digi downloads unless they wait for sales.



ledreppe said:

I'm buying more and more digital all the time, especially on my PC and 3DS. But I mostly buy discs for full retail Wii U games, and stick to digital for download exclusive games, simply because of the higher cost of digtal versions of full retail games on the Wii U eShop.

But there's always the niggling thought in my mind that sticking to discs allows me to get some money back if I decided to trade some games in.

Digital distribution is here to stay, even if you totally hate it!

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