No, digital game sales are not killing retail, according to NPD Group analyst

During a recent interview, a games industry analyst over at the NPD Group discussed how the landscape was changing with the ever-increasing number of digital games being offered to consumers on PC and consoles. With many retail locations in the U.S. struggling to keep their doors open, one could assume that traditional retail sales were under threat from the digital realm. However, the analyst gives some insights into this data from the group's perspective.

NPD Group analyst Mat Piscatella revealed in the interview that according to the group's analysis of the overall industry, which now includes digital sales, the picture is not as bleak as previously assumed. According to the firm, digital hasn't cannibalized the industry, calling it an 'incremental' change instead; as Piscatella explains:

"I've been looking at the interplay between digital and retail sales data for years now, and the data suggests to me that digital sales are more incremental than cannibalistic to full games sales -- meaning that I simply don't see digital and retail competing in a zero sum game for full game sales. Yes, more digital games are being purchased, and the overall share of digital is increasing, but that's not leading to direct offsetting declines in the retail space."

Piscatella went on to say that the so-called 'millennials' and 'gen-Z' consumer group were more likely to purchase physical games since they use it as 'currency' when trading for new games. GameStop and others have offered gamers discounts on new games if they bring in older titles when they were done playing them. Beyond that, Piscatella responded to some in the industry calling the NPD reports irrelevant due to the rise of digital sales:

"As for some critics calling packaged NPD data 'irrelevant' well... the strong majority of full game sales still comes from packaged retail, and will be for some years to come,"

According to reports, 74% of all game sales in the US is through digital channels. However, the majority of those sales are from mobile and PC gaming, where you're required to download the title by default. Piscatella pointed this out during the interview, saying that the group's analysis has not found any correlation between the rise of digital sales on any of these platforms, and that of consoles. Beyond that, games like Final Fantasy 15, which launched last year, managed to outsell all known records at retail, beating digital sales as well, according to Piscatella.

The NPD Group reports on the health of the gaming market in several countries, most notably the U.S., where hardware and software sales are analyzed and reported on a monthly basis. In June 2017, PlayStation 4 outsold both the Nintendo Switch and Xbox One; and Tekken 7 was the best selling game.


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