I don’t normally cover the software games market here, but I thought this piece over on Joystiq.com quoting a press release from market research company , The NPD Group, was interesting. While US based, it does give us an insight on the PC gaming market, and that sales parity between physical and digital distribution channels has almost been reached. No, at the moment, we are not looking at the Sony Playstation or Microsoft’s XB consoles, but with online networking well established in these formats on both sides of the Atlantic, it cannot be long before we see retailers like GameStop under serious threat and maybe even the gaming manufacturing giants move to mainly digital distribution channels.
Strangely, I have always felt the games market was a far more progressive platform, and yet, the book publishing industry seems to pay stricter attention to what has happened in the music industry to attempt to learn its lessons and direct its current strategy with e-books.
From the NPD Group press release:
PC GAME DIGITAL DOWNLOADS REACHING PARITY WITH
ACCORDING TO THE NPD GROUP, IN 2009, 21.3 MILLION PC GAMES WERE DOWNLOADED IN THE U.S. VERSUS 23.5 MILLION PURCHASED AT RETAIL
PORT WASHINGTON, NEW YORK, July 21, 2010 – According to the PC Games Digital Downloads: Analyst Report, from leading market research company, The NPD Group, in 2009, 21.3 million PC Game full-game digital downloads were purchased online in the U.S. compared to 23.5 million physical units purchased at retail during the same period.
While NPD’s point-of-sale research shows that PC physical retail sales experienced a year-over-year revenue decline in 2009, it was still slightly larger than PC digital download sales on a unit basis. PC digital downloads represented close to half of unit sales across digital and retail at 48 percent in 2009, and accounted for 36 percent of dollar sales.
PC Games Digital Downloads: Analyst Report segments the PC full-game digital download landscape into two Web-based ‘retailer’ segments (offers games for download, and with no physical storefront): Casual Digital Retailers, which often focus on smaller, easily accessible games that typically utilize try-and-buy or advertising revenue models; and Frontline Digital Retailers, which often focus on titles that are also offered in retail stores as physical purchases.
Top 5 Frontline Digital Retailers –2009 (based on unit % share)
Top 5 Casual Digital Retailers – 2009 (based on unit % share)
Frontline Digital Retailers increased their share of the PC full-game digital download market in the second half of 2009, at the expense of the Casual Digital Retailers.
Free Gaming Vs. Digital Retailers
One of the most significant factors contributing to the decline in share captured by Casual Digital Retailers is the increase in popularity of free social network gaming and free mobile gaming.
“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 Anita Frazier, industry analyst, The NPD Group. “This demonstrates how consumers can now experience casual types of games through myriad vehicles, broadening the competitive landscape.”
Free mobile gaming is also capturing the attention of gamers, illustrated by the 30 percent increase in usage of the iPhone and the iPod Touch as gaming devices from Q2’09 to Q4’09. Furthermore, 97 percent of those who downloaded a game app in Q4’09 downloaded a free version of a game.
Information contained in this press release sources from two of The NPD Group’s ongoing consumer services covering the games industry:
– Games Acquisition Monitor
The NPD Group’s Games Acquisition Monitor is a quarterly tracker which measures both digital and physical forms of games acquisition activity, volume, awareness and usage of retailers and services, as well as other technology and entertainment activities that could influence game acquisition trends. It is based on online survey responses from over 8,000 members of NPD’s online consumer panel. Data is weighted and projected to be representative of the U.S. population ages 2 and older.
– NPD Consumer Tracker
NPD collects data on PC game purchases via its weekly video games consumer survey. Each week, over 180,000 individuals are selected from the NPD online consumer panel to participate in one of four weekly studies. The responding sample is demographically weighted and projected through a series of steps to represent the Total Adult (18+) and Total Teen (13-17) U.S. population. Respondents to the survey report whether in the past week they purchased a PC game on a disc or downloaded the game from a web site
directly to their computers.
Only digital purchases of games from the above websites are tracked in this report. Shipped boxed products from these sites are not covered; information about these can be obtained through our PC Retail Tracking service.
About The NPD Group, Inc.
The NPD Group is the leading provider of reliable and comprehensive consumer and retail information for a wide range of industries. Today, more than 1,800 manufacturers, retailers, and service companies rely on NPD to help them drive critical business decisions at the global, national, and local market levels. NPD helps our clients to identify new business opportunities and guide product development, marketing, sales, merchandising, and other functions. Information is available for the following industry sectors: automotive, beauty, commercial technology, consumer technology, entertainment, fashion, food and beverage, foodservice, home, office supplies, software, sports, toys, and wireless. For more information, contact us, visit http://www.npd.com/, or follow us Twitter at https://twitter.com/npdgroup.