If you frequently visit #gaming news websites, blogs or YouTube channels, there is a significant chance that you may have previously come across the opinion that the video game market is headed for a #crash based on the year-on-year decline of #videogame sales.
The basis of such claims had been figures released by #NPD; one of the largest market research companies in the world. However, within the yearly released sales reports only accurate figures for physical sales had been provided, whereas figures for #digitalsaleshad been predicted. These predicted figures indicated a year-on-year decline within the overall video game market.
However, recently NPD has been able to obtain concrete figures for digital sales, including those for #DLC and microtransactions, and basically have changed their entire outlook with regards to the video game market.
Sales are actually indicating a year-on-year steady incline, which does seem to somewhat put to rest any claims of this impending video game crash as it seems that gaming is probably more popular than ever at the moment, with more people spending more money on the hobby each year.
The question you may be asking is what was the reasons for NPD’s large discrepancies in year-on-year sales figures and the answer to that question is that publishers had previously never provided sales figures for digital sales to the research group and thus, as previously stated, estimates were used to craft final revenue figures within the industry.
What NPD had failed to predict was the overall rapid adoption of digital consumption over physical consumption of products; so basically, in other words, they had failed to see the notion of digital sales of games becoming more popular than that of physical sales over a period of six years.
All of this new information about digital #videogamesales becoming more popular than that of physical sales kind of got me about the fact of how and why it became so popular, so quickly and then also whether or not this may also be the case in other areas of the media industry.
So, When Did Digital Consumption Start Becoming The Norm Within The Gaming Industry And Why?
It is hard to say when exactly more individuals begun looking at the idea of digital downloads being a better manner in which to purchase a game than that of a physical copy.
NPD figures, however, suggest that the numbers with regards to digital downloads started growing rapidly in 2010, when about a third of all sales (and this includes video games, DLC and microtransactions) made were digital sales and this figure has increased ever since.
Last year (2016), supposedly saw digital sales make up nearly three quarters of total sales within the market, most likely meaning that there’s probably a big chance that you bought at least one digital product last year, whether it was a game itself, DLC or one of those pesky #microtransactions that everybody claims to hate.
Previously, I wrote about gaming increasingly becoming a hobby that is only limited to those with a strong internet connection and line speed, and these figures as well as the fact that some large publishers, such as EA, have stated in the past that they are increasingly moving towards becoming a digital only producer, definitely seem to suggest so.
The idea of being a digital-only publisher isn’t exactly an unheard-of stance within the gaming industry. While most of the titles that most indie developers create will never carry the same weight as that of an #EA title in terms of popularity, there are already a lot of games that you can only access through #Steam, the #PlayStation Store or #Xbox Live Marketplace.
I have even previously heard somebody suggest that one of the reasons the #PS4 is so successful is Sony’s marketing of their exclusive-content deals, for example, with #Activision and the Call of Duty and Destiny titles.
While it is very unclear as to whether this notion is in fact true or not as we don’t really know how many gamers actually do choose to buy a specific console on the basis of exclusive DLC deals (which is content that is digital only), any attempts to capitalise on such a market may prove to be very beneficial to any company that does so.
In terms of myself, I have definitely seen a large move towards buying digital games and quite simply I attribute this fact to the idea that the ‘store is always in my house.’ All one has to do is switch on their PC or console and go into the online store.
In these instances, you often come across deals on games that you may have not entirely been sold on getting and then decide to buy due to the nature of the deal; the same way that people often buy stuff they weren’t even thinking of getting when they spend extended periods of time walking around in a shopping centre.
I am not going to lie; I buy a ridiculous number of games each year. A third of the way through this year and I can’t even really tell you how many games I’ve bought so far, but I can say that only two (Horizon Zero Dawn and For Honor) were physical copies.
Would I have bought all of the games that I have bought this year if there was no digital marketplace for games on all available platforms? Most definitely not.
Digital Downloads and Other Areas Of The Media
What’s most interesting about this phenomenon, is that most other areas of media (music, film, television, etc.) haven’t exactly had a transition that one could deem as successful. At one point, it was quite hard to think of the idea of digital music or film without thinking about piracy as well.
This is not to say that people don’t buy music or films digitally or that there isn’t piracy within gaming, but rather that it seems that instead of the market becoming digital being viewed as a threat to the overall revenue of the industry, it’s viewed as an area on which companies can capitalise on.
Perhaps, this is down to the manner in which these different types of media are consumed; you can listen to a song on YouTube without actually wanting to buy the artist’s work, but watching somebody play the game has historically worked in compelling others to buy a certain game.
I say this statement as someone who loves all types of media and engages in playing both video games and musical instruments as pass times.
However, the one particular area that is very interesting with regards to digital sales is that of the books, which a lot of sources claim has seen an increase in physical sales as opposed to digital sales, which were very popular at one stage.
The common reason provided for this is the idea of ‘screen fatigue’, where the idea of staring into a digital screen for any longer becomes deplorable, but then this isn’t really a trend that could be seen in the gaming industry because you’re already staring at a screen in order to practice the hobby.
Maybe people will one day just get sick of staring into screens overall? I doubt it though.
At the end of the day, the point of this piece is that if anyone tells you that the video game industry is crashing, they’re spreading around incorrect information as by all accounts it just seems to keep on growing.
Do you buy more digital games than physical games? Did you think that the video game industry was heading for a crash? Please share in the comments down below.