The exponential growth in the popularity of digital download services such as Steam and Direct2Drive has led many experts to speculate as to if/when digital consumption would eventually overtake, or possibly even replace outright, traditional retail sales. But thanks to a new report from the industry market research firm NPD Group, that speculation is no longer quite as farfetched as it might have seemed a few years back.
According to NPD figures for 2009, 21.3 million full PC games were purchased via digital download. What’s particularly interesting is that physical unit retail purchases came in at 23.5 million. Digital downloads accounted for 48 percent of sales in 2009, and 36 percent of dollar sales.
The NPD’s report breaks the digital download market into two categories: Casual Digital Retailers, which “often focus on smaller, easily accessible games that typically utilize try-and-buy or advertising revenue models,” and Frontline Digital Retailers, which sell titles that are also offered in retail stores. Here’s how both groups broke down in terms of unit percent share:
Top 5 Frontline Digital Retailers –2009 (based on unit % share)
Top 5 Casual Digital Retailers – 2009 (based on unit % share)
According to the report, Casual Digital Retailers took a hit in the second half of 2009, thanks in large part to the rise in popularity of gaming via social networking sites like Facebook, while Frontline retailers saw an increase in their digital download market share. NPD also cited the free mobile gaming space, specifically the 30 percent jump in iPhone and iPod Touch usage for gaming, as having contributed to the drop in Casual Retailer use as well.
Between the continued rise of digital download services, coupled with the growing popularity of console services such as Xbox Live and PlayStation Network, and even streaming services like OnLive, the industry is rapidly approaching a point where digital consumption will become the majority and physical retail purchases will be the minority. And as this latest report proves, it’s clearer than ever that this paradigm shift is no longer a matter of if, but when.