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DFC: Worldwide Digital Game Revenues To Pass Retail In 2013

DFC: Worldwide Digital Game Revenues To Pass Retail In 2013

September 7, 2011 | By Frank Cifaldi

Continued growth in game revenues from online distribution, subscriptions and advertising will surpass slowly declining revenues from retail game sales in 2013, according to a new projection from DFC Intelligence.

According a new report (and from additional data provided to Gamasutra), in 2010 retail games worldwide brought in $29.7B and digital game revenue commanded $19.3B, representing approximately 45 and 29 percent respectively of total industry revenues of $66.5B (the remaining $17.5B coming from retail hardware sales).

In 2013, the group is projecting the industry will grow to $77 billion, with digital game revenues of $29.9B surpassing an estimated retail spend of $27B.

By 2016, the group projects that the industry will continue to see growth on the back of digital sales while retail games continue to decline: the $37.9B in estimated digital revenues would represent nearly half of an estimated $81B games industry.

"On a global basis it looks like retail delivery of physical software peaked in 2008," said DFC analyst David Cole (that peak was estimated at $58B). "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 goes on to say that Nintendo's Wii is the only home system that has peaked in terms of usage: DFC analysts expect both the Xbox 360 and PlayStation 3 to grow their user base over the next few years. The greatest growth area for the industry, meanwhile, is in PC games and mobile devices.

"Overall the game industry is becoming more diversified and global as it continues to grow. This makes the industry challenging because it is hard to know where to place ones bets. At the same time, there are many niches of opportunity that didnt exist in the past," says Cole.

The full report, "Worldwide Market Forecasts for the Video Game and Interactive Entertainment Industry," is available for purchase here.

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