For years now analysists have been forecasting a digital revolution, when most people would start downloading most, if not all, of their games rather than buying them physically. Well, it turns the digital revolution isn’t coming after all – it’s already here.
According to the NDP Group, the digital sector completely dominated the video game industry in 2016. Digital sales of subscriptions, full games, add-on content, mobile apps, and social network titles accounted for a whopping 74 percent of the $24.5 billion the video game industry made in North America in 2016. Meanwhile, good old-fashioned boxed games were left with only 26 percent, or around $6.4 billion, of the pie. Sad trombone.
This trend has been developing for a while, as digital sales have been growing consistently since 2010, when digital sales made up 31 percent of gaming industry profits. Now, before you old-school gamers get in a panic, traditional game sales haven’t necessarily been dropping, digital sales have just been increasing big time. Physical game sales are only shriveling in comparison.
That’s sure to be small consolation for brick-and-mortar stores like GameStop, who are starting the feel the squeeze. Traditional game sales are fairly flat, while consumers have a wider range of ways to buy them, including digital stores, online retailers like Amazon, and the mega box stores like Walmart. GameStop’s sales were down 19 percent last holiday season as a result, forcing the chain to close hundreds of stores.
The fact of the matter is, traditional game publisher now cater to a large, but largely set-in-place, niche of customers who first started gaming 10, 20, or 30 years ago. Most of the real growth in the industry comes from mobile and digital sales. How that eventually effects the industry, remains to be seen.
In the meantime, I’m going to go play The Legend of Zelda: Breath of the Wild off a little plastic cartridge.