News Article

Over 61% of Q2 Game Sales in the U.S. Were From Download Products

Posted by Thomas Whitehead

That'll be why Nintendo's pushing the eShop platforms, then

It's been reiterated enough times that, despite the desire of many to maintain physical retail collections of games, the rise of download platforms and products nevertheless continues to gain momentum. While Nintendo weighs in with the eShop platforms on Wii U and 3DS, there's also substantial download business on Sony and Microsoft systems, PC services and smartphones / tablets.

As part of its quarterly Games Market Dynamics: US report, NPD has confirmed that over 61% of game products sold in the U.S. in Q2 were digital downloads ‚ÄĒ $1.77 billion in sales came from subscriptions, full-game downloads, add-on content, or mobile/social games. Naturally that accounts for some products and markets that are far less prominent with physical sales, which reached $769 million, while rentals and used games accounted for $343 million. NPD analyst Liam Callahan said the following.

The decrease in new physical spending is partly due to the decline in the number of new SKUs released at retail, (with 37 percent fewer new SKUs in Q2 '13 compared to Q2 '12) which is to be expected as developers, publishers and consumers alike prepare for the next hardware generation.

Increases in digital format spending offset nearly all the losses from the declines in physical format spending, with digital full game downloads and downloadable content spending experiencing a combined 27 percent increase (when compared to Q2 '12). Spending increases occurred across both video games and PC games in the digital format.

The presence of varied products and mobiles/tablets naturally skews figures to make the odds tougher for physical retail games, though even with those download revenues overall spending dropped 9% in the reported period. It's clear, seeing the continuing upward trend of download sales, why Nintendo is putting such effort into promoting the eShop platforms.

[via gamesindustry.biz]

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User Comments (58)

ikki5

#1

ikki5 said:

makes sense, so this would also mean that take the sales figures in the US from games and double them to get the actual number (actually, it is a bit more but whatever).

If this is the same in Japan, think about Pikmin....... lol

Yellowgerbil

#2

Yellowgerbil said:

People really should think about the games sales on the E-shop than just thinking that the Wii U has weak game sales.

ferrers405

#3

ferrers405 said:

Yeah, personally, I buy all my games for handhelds digitally (Vita/3DS) but for consoles (PS3/Wii) i prefer buy a physical copy.

Judgedean

#4

Judgedean said:

That is why those sales charts need to include BOTH physical and download purchases.

ledreppe

#5

ledreppe said:

Nintendo should sort out the eShop full retail game download prices, if they're REALLY serious about digital sales.

WiiLovePeace

#6

WiiLovePeace said:

I just buy whichever is cheapest, if it's retail I buy there but if it's digital I buy from that. Although saying that I will buy digital just because it's more convenient if it's about $4 max more than at retail haha. Actually since downloading Pikmin 3 & The Wonderful 101 as well as Runner 2 etc. I realised I had forgotten I had physical disc games haha I really need to get back into Nintendo Land one day...

Spoony_Tech

#8

Spoony_Tech said:

Well I did my part as I'm right about 65-70% only games I bought retail were the Three Atlus games soon to be 4! I've downloaded about 7-8 retail games and a few more this year to go!

moomoo

#10

moomoo said:

Everyone should keep in mind that this is for the entire video game market, not necessarily Nintendo. With mobile gaming (an incredibly large portion of the industry) being made up entirely of downloads, this isn't very surprising.

rjejr

#11

rjejr said:

So what does this include and what does it not include? I just read today that Candy Crush does like $85k per day, plus Gung Ho and Puzzle adn Dragons is making like a million, plus you have all those 99c iOS and Android games. Is any of that included or is this strictly home consoles and handhelds? And if it includes home consoles is the digital only Ouya included?

"Game sales" is kind of over broad. I'ld like to see disc based game digital sales, that would tell me something useful.

XCWarrior

#13

XCWarrior said:

Ugh. As a person who loves to own the physical copies of games, this saddens me. I feel like in the next year we are going to start seeing more full fledged, $60 games be digital only. And the worst part is, they'll still cost $60, even though they should be cheaper since they are just a digital file.

kivi95

#14

kivi95 said:

What retail games did they release in Q2 anyway for the WiiU. I think this figure is mostly because more downloadable titles where released.

FluttershyGuy

#15

FluttershyGuy said:

@XCWarrior
That's exactly how I feel. I remember the days of glorious gold Zelda cartridges, instruction booklets with beautiful artwork, and helpful maps.

Now, not only are those bonuses a thing of the past (we get water-thin instructions that barely instruct), we're quickly headed toward a digital-only gaming world. I know this is what companies want, to avoid all the costs of production, but as a gamer who only buys physical if he has an option, I won't go quietly into the night! I don't care if Nintendo releases The Wind Waker 2 MONTHS early! I'm not going to be pushed to digital, with nothing tangible to show for my dollars, that are so hard to come by.

And isn't it lovely how we live in a world increasingly about getting less and less for more and more, whether its groceries or video games? Yeah, you're paying the same price, and have nothing you can put your hands on. ūüė°

Mahe

#16

Mahe said:

It's no wonder. Downloadable games are offering a lot variety, fun gameplay experiences and great titles that often just aren't available as physical releases. They offer titles that rival disc releases in scope, like Trine 2: Director's Cut on Wii U, and great 'bite-sized' games that wouldn't be feasible as physical releases, such as Mighty Switch Force 2 and the new Streetpass games on 3DS, or games that would cost a lot more as physical releases, such as Airport Mania on WiiWare/DSiWare.

Peach64

#17

Peach64 said:

This isn't saying 61% of games are bought digitally, so it's no good saying just double whatever the physical release figures are. It's saying 61% of spending is digital. So that means all MMORPG subs (WoW alone makes 360 million in a quarter), all Steam purchases, all IOS and Android purchases, plus DLC for all our console games. You add all those up and that's a big chunk of the digital spend. I'd love to see some actual numbers for digital vs physical on retail games because I'm pretty sure for consoles, and especially Nintendo that digital is a tiny percentage. I don't think those that love displaying their boxes having anything to worry about for at least one more generation.

FiveDigitLP

#20

FiveDigitLP said:

I just bought Rayman Legends digitally, and after seeing how many points I got from that on the deluxe program, I'm certainly contemplating buying more of my games through that manner...lol.

JuanitoShet

#21

JuanitoShet said:

This is pretty awesome; despite the fact that I'd MUFH rather have a physical copy if my software (I only have a small handful of digital titles, as opposed to about 60 physical discs/cartridges), the fact that the digital world is doing well is great news to me. In the end, I'm a supporter of both mediums, simply because I believe (just like Nintendo does) that the consumer should have more than one option when it comes to decidinflg on how they would like to own their product. :)

Zael

#22

Zael said:

ok but there were only few retail games in q2, much more vc games etc

unrandomsam

#23

unrandomsam said:

Never trust any statistics without something written about the methods used.

They are all the same market research / advertising they always say what the person paying wants to hear.

(As there is no way to legally get e.g the Xbox Live figures they get away with it).

unrandomsam

#24

unrandomsam said:

@JuanitoShet If it is digital you don't own it. A big part of ownership is being able to sell what you own if you want. Be interesting (At least for the EU) what happens with the German case about reselling steam games.

Sir_JBizzle

#25

Sir_JBizzle said:

@XCWarrior agreed... Though I'm moving more towards digital, so it doesn't bother me too much, but I would like to see more sales or overall a lower digital price. I doubt we'll see that anytime soon. I think we as digital buyers are helping to pay for physical distribution.

Minny

#26

Minny said:

People need to google anatomy of a $60 game. The cost of production, shipment, and retail cut of that $60 is not high. The games will never be substantially cheaper digitally than retail, because the video game companies need retail to sell the hardware and retail makes their money off software.

I will also point out that retailers do not like getting stuck with tons of software. They buy a game in bulk to distribute to their stores. If they game doesn't sell, they not only eat their profits, but will end up losing money when it is in their bargin bins. You will see less and less physical copies produced so retailers do not lose money on selling the game. If you enjoy physical games, you will have to have the mindset that pre-ordering the game if you want it since there will not be many physical copies available.

The recent rumors of Microsoft incorporating a buy-back system with digital games (you would sell your digital game back to Microsoft, who would then re-sell it) for the Xbox1 will only drive the digital side more, allowing for 3rd party developers to make money on a used digital sale.

Cohort

#27

Cohort said:

I have a US 3DS so I send the funds to F&F and they email the 3DS credit codes over, so all my games are digital download.

Anything under 2GB for the Wii U i'll download due to space, but major releases are way too expensive on the eshop anyway..

One-Winged-Pit

#28

One-Winged-Pit said:

Then maybe they should make a better account system. Geez, why are they refusing to be modern and consumer friendly?

Chomposaur

#29

Chomposaur said:

When Nintendo makes a account system THEN i will buy digital games .. until then no thanks .. get with the times :-

Chomposaur

#30

Chomposaur said:

@One-Winged-Pit Nintendo has said " We will do things our own way" whether being out of touch or not.

Personally i cannot see Nintendo making an account system. Because they are bankrolling millions by selling us super Mario bros time and time again :- Such a shame ..

Geonjaha

#32

Geonjaha said:

This...doesn't really prove anything seeing as PC users are almost exclusively download users. Y'know, what with those amazing discounts and all. As for consoles? Lol, you can bet the PC is really pushing their statistics up.

Zombie_Barioth

#33

Zombie_Barioth said:

Doesn't really prove much, not with Steam sales, digital only releases, and mobile devices being completely digital. When games sell like penny candy or don't have physical releases of course you'll get a lot of digital purchases.

Subie98

#35

Subie98 said:

@XCWarrior I only buy physical too. The only thing ive ever bought digitally was earthbound for wii u. Its staying that way. I enjoy physical when its requiring my money.

XCWarrior

#37

XCWarrior said:

@DkFluttershyGuy For a moment I thought you were going to start paraphrasing the one speech from Independence Day. If you had, you would have won the Internets forever and ever.

But yeah, I'll pick up things like Earthbound digitally because the physical copy is too expensive, but 98% of the time, if the option is there for physical, I'm sticking with physical. I love my massive shelf of games.

Senario

#38

Senario said:

@JogurtTheYogurt But they are. It has already been confirmed that they are looking into it. It really isn't something that happens overnight. Also, I wasn't aware that nintendo sold anything other than mario if you don't count DK, Zelda, metroid, kid icarus, smash bros, fire emblem, animal crossing, pikmin, andd other games that are exclusive like the wonderful 101 made with plat games. And there surely isn't more I haven't named! My mistake.

FluttershyGuy

#39

FluttershyGuy said:

@XCWarrior
I was actually going to continue with President Whitmore's immortal speech, but did not in the end, to avoid sounding silly on a serious topic. ūüėĚ

I've been thinking more and more lately about even buying used copies of old games from the past I've missed. It takes forever to see new offerings on VC, and more and more I don't want to aid the takeover of digital. But, I have a thing about owning things brand new, and I'd not be supporting Nintendo at a time when it's struggling. So, I'm kind of torn. :/

erv

#40

erv said:

They should have online shops sell retail game download codes instead of boxes. Watch the market for eshop go really big as the prices are becoming more equal then.

PS4WiiU

#41

PS4WiiU said:

That 61% includes indie games, dlc, iOS, ANdroid, facebook microtransactions, MMO subscriptions.
WHen you take it all away pure digital vs disc is probably 10/90 split at most

odd69

#42

odd69 said:

Ive been on the downloadable bandwagon since Wiiware, but i still rather my physical disc anyday

RetroBillyT

#43

RetroBillyT said:

@ledreppe I would say it's got a lot better. For example Pikmin 3 is £39.99 on the E-Shop- if you buy the download code from Game.com it's £34.99- then there's the Nintendo Network Premium- it's looking a lot better than the £49.99 they are charging for Nintendoland!

Rect_Pola

#44

Rect_Pola said:

I don't mind the steady encroachment of an all download market, I just have a few issues I hope get resolved (across the industry) before it fully takes over.
1) More space in the box
2) Upgrading space shouldn't be proprietary (& preferably still in the box)
3) An account that actually takes it with you (since we apparently aren't going to a universal storage hub for all devices)
4) Ownership

Windy

#45

Windy said:

For me it will be a sad day when Physical copies are gone. But i'm guilty! I downloaded more games than bought retail this year. I have been against Digital but look at me now. Crys The Eshop has just been so good this year and I cannot resist. I would still rather have a Physical copy. The games I bought are exclusive to the Eshop. I've got a few duds but overall it's been pretty good

chibichibi

#46

chibichibi said:

This isn't why Nintendo is interested in digital sales. They're interested because they can make a much bigger profit from digital than they ever could from physical. With a digital copy, they save the cost of producing and distributing each copy, and they get to keep the share that the retailer would usually get.

More importantly the fewer physical copies they sell the higher the price used copies will be, because there will be less supply but the same demand.

Dogpigfish

#48

Dogpigfish said:

Honestly, I've got too many games to play right now and we haven't even got to the end of the season.

Dogpigfish

#49

Dogpigfish said:

@Rect_Pola You only have ownership on a box that doesn't register online, which last I checked is the Wii U. I think you mean the ability to transfer if the box breaks or it gets stolen. That is a problem.

unrandomsam

#51

unrandomsam said:

As it stands we have most of the disadvantages of digital distribution but none of the advantages.

Disadvantages :
DLC
Cannot give games you have finished with away to others.
Cannot resell games.

Advantages :
GOTY editions at 50% cost with all DLC
Play games you own just by logging in to a friends console as a one off.
Lower Prices - lots of sales (Competing with used to make sure the money goes to the dev's not the used games stores).

element187

#52

element187 said:

@ferrers405 I'm the exact opposite, I'm more likely to do physical for portable and digital for console gaming.

Although if Nintendo had a program where I sent in my physical 3DS games and they would send me a download code I would totally take them up on that. I would like to switch to all digital, but with 20+ physical carts, i don't want to rebuy all those.

ferrers405

#53

ferrers405 said:

@element187 For me, it's convenient, because i can take my portables out and not worry with extra cartridges, while when i'm in home i don't have to worry with space and can put my boxes in the shelf.

Rect_Pola

#54

Rect_Pola said:

@Dogpigfish You checked? Unsettling
I kind of lumped that with the third item. I haven't heard if PS4 upholds your past PSN purchases yet, and whatever's up with Nintendo annoys the heck out of me. On the fourth point I was actually referring to the legality of ownership in a larger sense: selling, trading, etc.

iPlayNintendo

#55

iPlayNintendo said:

Not surprising considering every time I go to Gamestop for a new Wii U game they don't have it in stock unless I preordered it

StarDust4Ever

#56

StarDust4Ever said:

Are we talking net profits, or gross sales? A $60 download makes a lot more profit for the company than an equally priced retail title, once you factor in manufacturing, distribution, and retail costs. That said, as a retro gamer and collector, I will continue to buy retail games for as long as the option to do so is still available. I currently reserve digital purchases for eShop exclusives.

SyFyTy

#58

SyFyTy said:

that's a very eschewed interpretation: Those numbers only reflect a preference based on limited retail availability. If every game was available on BOTH media formats, THEN and ONLY then, would it indicate a preference in e downloads. Fluff articles like this are designed to get everyone (Sheeple= people who act like sheep; without independent thought of their own) psyched so N may push their download only agenda. It is not an accurate assessment of actual purchasers preferences. The word is P-R-O-P-A-G-A-N-D-A. The haven't had a game I've wanted since Fire Emblerm, does that mean I have not wanted to buy games in the past few months? No. And that's just an example of an overly optimistic interpretation, the same as N is doing... They can't be that stupid to believe their own press on this...

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