Analyst predicts game download sales to surpass retail by 2013

For the past few years we have seen that downloading console and PC games, rather than purchasing boxed retail copies, is gaining traction in the game industry. Indeed, many people believe that the PC game business has been saved by the success of downloadable games. Now a new study by DFC Intelligence predicts that the online model for purchasing games will surpass that of the retail game industry by as early as 2013.

According to DFC analyst David Cole, "On a global basis it looks like retail delivery of physical software peaked in 2008. We expect a slow, steady decline for physical game sales, with a steady increase for online delivery of games and new business models such as subscriptions and virtual item sales." The report predicts that by 2016, retail sales of games will go down to $43 billion compared to its peak of $58 billion in 2008. DFC also predicts that by 2016 revenues from online distribution of games (including subscription and advertising revenues) will jump to $81 billion, compared to $66.6 billion in 2010.

The report also takes a look at the future of the console game business, predicting that Nintendo's planned launch of its upcoming Wii U console sometime in 2012 will achieve solid sales. However, it also predicts that the sales won't match the numbers of the current Wii console. And what about the successors to Microsoft's Xbox 360 and Sony's Playstation 3? Cole says the current consoles from those companies " ... are having their best sales ever five or six years into their lifecycle. Unfortunately this means Microsoft and Sony are in no hurry to launch new systems that would generate substantial consumer excitement and spending. The dedicated console business is still the major driver of industry growth, but we feel overall it has peaked with the current console systems."

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9 Comments

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deinabog said,
I prefer to buy my games in retail boxes from Amazon these days.

Its been a while since I've seen a proper game in a box, usually they're limited editions with a tshirt or something extra like that. For the most part, games these days come in a DVD case.

Back in the day, I initially was annnoyed at it - as the price didn't come down and as I saw it, I got a lot less for my money, Going from full on manuals for games, posters a nice box to show off on the shelf to a cheap plastic dvd case with a 4 page insert. They didn't fit on my shelf and they didn't fit in my CD rack.
However I'm quite happy with games that come in the DVD case now, at least I can hide the ones that were terrible among the rest of the over priced and over hyped games.

Its quite funny in a way if we think about how we've got to download games... legally. For years downloading games, software, music movies etc has been seemd illegal, wrong and was fought by the publishers so hard., and while I do own a steam account with 25 or so games on it as well as 20+ xbox live arcade and a few xbox live indie games..... i always have that nagging feeling in the back of my mind that one day, the games I've paid for via these download services I won't be able to play.

Can anyone remember mPlay or Wireplay or maybe the AllSeeingEye? There are lots more services or products like that have faded away over time and I'd hate to see any of the lesser known download services to fade away to the point paid content is no longer useable.

I prefer to buy the games in their retail boxes at the stores or via Amazon. All the games I ever check out on Steam for digital downloads (or on other sites selling digital copies) all cost at least 10€ more than at the store. I don't really get it. You cut out the middlemen and transportation and distribution, DVD printing, etc.., you'd think they were cheaper. If a game in the store costs me 45€, on Steam it would be at least 59,99€.

Odom said,
I prefer to buy the games in their retail boxes at the stores or via Amazon. All the games I ever check out on Steam for digital downloads (or on other sites selling digital copies) all cost at least 10€ more than at the store. I don't really get it. You cut out the middlemen and transportation and distribution, DVD printing, etc.., you'd think they were cheaper. If a game in the store costs me 45€, on Steam it would be at least 59,99€.

Really? Wow, that sucks. I've had quite the opposite experience. I generally get the same price, or slightly cheaper, as the retail version for new games, which is fine for me because I don't much value box art or anything like that. Steam's sales are really where it's at though. I don't often buy new games, save a few titles that I'm committed to playing (Mass Effect, Crysis, Half-life, etc), but the bargains in the Steam sales are unbeatable!

It used to be that Steam was generally cheaper here in Australia, until the retail companies had a cry that they couldn't compete, so now steam sales and other DD stores are taxed to make the prices a little more even. Which totally sucks.

I still buy on steam though, most of the time, but often getting a game shipped from hong kong is a good 30-40 bucks cheapers. Don't much care for the boxes anymore, unless I'm going for a CE of something.

Nice, I'am a PC gamer and since 2 years now i buy my games from Steam and other digital services. I stopped buying from store because there support for PC games are very very poor and most of the time they just don't care or pass a stupid comments like (oh PC, yeah.. poor you, why not get the Xbox version instead). All my PC gaming friend, but 1 now use digital services (about 4 out of 5)..

ryoohki said,
…pass a stupid comments like (oh PC, yeah.. poor you, why not get the Xbox version instead).

Whoa!?