Online Video Game Sales Near Parity with in-Store Sales, Report Finds

 
 
By Nathan Eddy  |  Posted 2010-07-25
 
 
 

Video game aficionados are increasingly turning to the Web and digital downloads to access PC gaming titles, a report on the subject found. According to the "PC Games Digital Downloads: Analyst Report," from market research company NPD Group, in 2009, 21.3 million full-game digital downloads for PCs were purchased online in the United States, compared with 23.5 million physical units purchased at retail during the same period.

While NPD's point-of-sale research shows that PC physical retail sales experienced a year-over-year revenue decline in 2009, retail sales were still slightly larger than PC digital download sales on a unit basis. PC digital downloads represented close to half of unit sales across digital and retail at 48 percent in 2009, and accounted for 36 percent of dollar sales.

The report segments the PC full-game digital download landscape into two Web-based "retailer" segments (offers games for download, and with no physical storefront): casual digital retailers, which NPD Group classified as often focusing on smaller, easily accessible games that typically use try-and-buy or advertising revenue models; and front-line digital retailers, which often focus on titles that are also offered in retail stores as physical purchases. The report found that front-line digital retailers increased their share of the PC full-game digital download market in the second half of 2009, at the expense of the casual digital retailers.

"The popularity of social network gaming increased from Q3'09 to Q4'09, as 4.8 million more people played games on a social network in the U.S.," said NPD Group industry analyst Anita Frazier, noting that one of the most significant factors contributing to the decline in share captured by casual digital retailers is the increase in popularity of free social network gaming and free mobile gaming. "This demonstrates how consumers can now experience casual types of games through myriad vehicles, broadening the competitive landscape."

Based on percentage of market share, Steampowered.com led the pack for front-line digital retailers in 2009, followed by Direct2drive.com, Blizzard.com, industry powerhouse EA.com and the ubiquitous Worldofwarcraft.com. Bigfishgames.com topped the list of top five casual digital retailers, followed by Pogo.com, Gamehouse.com, iWin.com and Realarcade.com. The report noted that free mobile gaming is also capturing the attention of gamers, illustrated by the 30 percent increase in usage of the iPhone and the iPod Touch as gaming devices from the second the to fourth quarter of 2009. "Furthermore, 97 percent of those who downloaded a game app in Q4'09 downloaded a free version of a game," the report said.

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