Digital game sales booming as retail continues descentBy Matthew DeCarlo 7 comments
Typically, market research firms look at retail game sales for their reports and pay no mind to digital distribution services like Steam. Perhaps looking at only retail figures offers enough of a sample to reach a conclusion, but digital outlets are undoubtedly responsible for a sizable share of overall game sales - as emphasized by IGN's recent report.
Despite the economic downturn and slow sales abroad, IGN says that sales on Valve's digital distribution service, Steam, increased a stunning 97% compared to June of 08. IGN's own Direct2Drive service has witnessed a sales growth of 56% in that same period, and Microsoft has experienced a 73% growth in Xbox Live download sales. By comparison, those figures dwarf that of the retail sector. NPD recently reported that June saw the greatest decline in year-to-year sales since September of 2000, 41%.
At first glance, it may seem like the digital alternative is quickly surmounting retail sales, but it's not that simple. According to Michael Pachter of Wedbush Morgan Securities, downloads are probably $1 to $2 billion in global sales this year, compared to the $26 billion packaged goods market. While downloads are growing - and growing fast - there simply aren't enough of them to account for the fall in retail sales.