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Digital the only bright spot in an overall 9% U.S. games industry decline
Digital the only bright spot in an overall 9% U.S. games industry decline Exclusive
November 15, 2012 | By Frank Cifaldi




The NPD Group just released its quarterly report on the United States video game industry, showing that Americans spent $2.87 billion on content between July and September of this year.

That's a lot of money, but it's actually down one percent from the same period last year. And if you factor in hardware and accessory sales, it's a little worse.

Altogether, according to subsequent data the NPD Group provided to us in a follow-up conversation, the United States video game industry is down 9 percent for the quarter, from $4.04 billion during those three months last year to around $3.78 billion this time around.

New game sales at retail, as we all know, is in a steep decline. Other physical sales -- primarily used games and rentals -- are down too, around 19 percent in fact. And as players wait anxiously for the next generation of video game consoles, hardware and accessory sales are taking a big hit.

There is one bright spot, however. The group says that the $1.4 billion in digital sales during the quarter is actually a 22 percent increase from the same period last year, as the industry continues its shift away from physical goods and toward the various pervasive digital models.

That's actually down from the April through June quarter, but only by around 5 percent.

The group says the primary drivers for digital growth were mobile app, digital full game downloads, and downloadable add-on content.


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Comments


Guerric Hache
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"The group says the primary drivers for digital growth were mobile app, digital full game downloads, and downloadable add-on content. "

Perhaps I'm tired and confused, but I can't think of much other kind of game or game content that players would pay for and download; to me, that list basically reads "games on mobile devices, games not on mobile devices, add-on content for games (mobile or not)". Is the point to suggest that that is the order of importance of each in generating growth?

Now that I think of it, I suppose in-game/in-app purchases are the major category that is being left out.

Guerric Hache
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Ah, that's it! Thanks.

Kristian Hogberg
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Physical boxes for games are quite unnecessary. Better for the environment without them.

Michael Rooney
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Economies of scale make both of those things better Christian. Especially when the hard-drive already exists anyway whether or not you decide to use it for that.

david canela
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@Christian:
I can't say I know the numbers, but I'm pretty sure distributing a bunch of 1s and 0s digitally is more efficient than sending those to the press, manufacturing boxes and optical discs, transporting those around the planet to retailers, from there to the user (or back in the case of unsold copies), at some point in the future recycle or burn those optical discs (unlike hdds, they can't be used for anything else). Also, at least for PC games, users are going to install them anyway, so the only extra hdds you need are for the distribution system. Which can be reusued for future products, scaling down the initial capacity for that particular game after the first month etc.

It would be interesting to see the numbers, and it's of course true that servers cost a lot of energy, but I'd be very surprised if that were less efficient than all that physical copies entail. Oh, and on the physical side, you'd have to factor in the cost of optical drives as well...

Kristian Hogberg
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Not sure that a bigger amount of digital games would mean more harddrives would have to be manufactured. If you buy a game on a disc you would still install it on the harddrive which means they would take up the same amount of space.
I would like to see an energy and carbon emission comparison between physical and digital too but I think digital would win.
Regarding games being collectible items. I agree with that, but if digital is better for the environment maybe we have to find some other way for games to be collectibles in a digital way.

Edit: This reply should have been a reply to my original post... :)


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