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Digital Games Make 3x As Much As Physical In US, Says Report


JamesD
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"Downloads reportedly made up 74% of the US gaming market in 2016."

"More precisely, NPD figures say 74% of sales in the US came via "subscriptions, digital full games, digital add-on content, mobile apps, and social network games," while 26% came from traditional boxed titles. Together, the categories generated a total of $24.5 billion, with an extra $3.7 billion coming from hardware and $2.2 billion from VR."

https://www.gamespot.com/articles/digital-games-make-3x-as-much-as-physical-in-us-sa/1100-6449459/?ftag=GSS-05-10aaa0a

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But yet on alot of games, the digital version is not cheaper....if by much. (at least on the home consoles)

Why would it be? You're mainly paying for the content, not the medium.

 

 

I know that when I'm buying games for my phone and tablet, I have a very hard time choosing between the download vs the cartridge, disc, or cassette version.

That's an excellent point. The data these days is pretty skewed.

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But the physical version of that content is more expensive to produce and distribute. Thus the digital version should sell at a lower price.

It's an argument I've seen a lot, supposedly the components that make up a physical release are like $2. You're right the digital version should be a couple bucks cheaper. For some reason kids today can't see the value in a couple bucks I guess.

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But the physical version of that content is more expensive to produce and distribute. Thus the digital version should sell at a lower price.

That's what we were always told... that media was expensive because it cost so much to print the discs, label them, ship them, store them, etc. all that cost had to be passed on to the consumer. Then when games went digital, suddenly the publishers got really quiet about why games cost so

Much.

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That's an excellent point. The data these days is pretty skewed.

Probably just the headline and writer that is skewed (as usual).

I bet if you read the actual report, it would break it down by device class-- and you would see that on consoles anyway, quite a large proportion of sales is still physical.

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I'll bet a majority of those digital downloads came from "casual" cell phone games like Candy Crush and such. Those are not what most *gamers*, at least, would even really call "games".

 

If you limit the results to games released for a traditional game system, be it a handheld, console or PC, I'll bet physical sales are a much higher percentage. (Though the PC would still skew the results; I think most PC gamers, including me, use Steam or GoG or something similar these days even for bigger games.) Though I probably wouldn't be surprised if it was still 50/50.

 

I checked the initial report and while it's not totally clear how they're counting, since the public part of the report is mostly a bunch of charts, they are including cell phones in the list of "game systems" so I'm sure they're counting cell phone games as part of the total.

 

I know some people think it's totally legitimate to include casual cell phone games and I understand the argument about why you would, but "gaming" in general is so nebulous that you've got to draw the line somewhere regardless. Otherwise you could end up including electronic gaming, board gaming, card gaming, etc. Even if the criteria is "it needs to use electricity" or "it needs to be programmable" (that seems really arbitrary already), that could still include a large number of outright toys and other things. For me I draw the line at the point where if those games didn't exist, people would just do something else. They wouldn't play other games or buy another system to play them on. Games like that are just time-wasters; something people do on their commute, but if they didn't have them, they'd read a book instead. The act of playing games is not important to them, so to me the games themselves aren't either.

 

I do think it's interesting that $2.2 billion in sales came from VR, and in the report itself, 1 in 3 consumers says they're interested in buying into VR this year. That's bigger than I expected.

 

Also, the average gamer is now 35 years old! The *average*! That number just keeps going up... I remember 10 years or so ago, it was 28. (Though that also implies that gaming is not attracting young people like it once did.) Will gaming one day seem to young people like something "old people" do?

Edited by spacecadet
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It's an argument I've seen a lot, supposedly the components that make up a physical release are like $2. You're right the digital version should be a couple bucks cheaper. For some reason kids today can't see the value in a couple bucks I guess.

 

Actually the physical version's cost is more than just the cost of raw materials - you have packaging/transportation/etc costs that are tied up to it as well which are far more expensive than holding a digital copy on a server somewhere and transferring it after accepting a payment. It should be cheaper - heck, the devs/publishers said it would be cheaper originally.

 

Still, it's essentially admitted that the digital cost is artificially kept high.

 

https://www.gamespot.com/articles/ubisoft-explains-why-digital-games-stay-more-expen/1100-6428760/

 

And as people point out for the potential skewness of the report - it's lumping all of the US together based on the buying habits of 4000 households. It's not actually doing a report based on actual sales data, reports, etc.

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Also, the average gamer is now 35 years old! The *average*! That number just keeps going up... I remember 10 years or so ago, it was 28. (Though that also implies that gaming is not attracting young people like it once did.) Will gaming one day seem to young people like something "old people" do?

Is the average going up because fewer younger people are playing games, or because more older people are?

 

For example, back in the day, my parents never showed any interest in videogames. Now in their 70s, they are playing all sorts of bejeweled styled games.

 

And my facebook feed was full of middle-aged women playing things like Farmville and Candy Crush, and I'm pretty sure that were never much of a gaming demographic before.

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Probably just the headline and writer that is skewed (as usual).

I bet if you read the actual report, it would break it down by device class-- and you would see that on consoles anyway, quite a large proportion of sales is still physical.

Yep, that was exactly my point, the data is skewed because some devices don't allow physical purchases. The headline would for sure be misleading in that it doesn't mention everything is lumped together. No clue about the writer, maybe he's biased about DLC.

 

One thing is very likely, a decade from now it probably won't matter. With the exception of little indie companies releasing DLC only games on disk for a premium price, there won't be any physical medium to compare to. Then you'll see headlines like "99% of games sales in the US are digital."

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I doubt that the writer is biased towards DLC. He just knows that a title indicating that digital sells more is much more likely to get clicks then saying that physical is still king. Admit it, if an article title says something that you know is completely wrong, you are probably going to read it. If the title said physical games still outsell digital on home consoles, you would say "no shit" and skip right over it to the next article.

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Actually the physical version's cost is more than just the cost of raw materials - you have packaging/transportation/etc costs that are tied up to it as well which are far more expensive than holding a digital copy on a server somewhere and transferring it after accepting a payment. It should be cheaper - heck, the devs/publishers said it would be cheaper originally.

 

Still, it's essentially admitted that the digital cost is artificially kept high.

 

https://www.gamespot.com/articles/ubisoft-explains-why-digital-games-stay-more-expen/1100-6428760/

 

And as people point out for the potential skewness of the report - it's lumping all of the US together based on the buying habits of 4000 households. It's not actually doing a report based on actual sales data, reports, etc.

Also the retail store has to take a cut of game price.

 

So the 2.00 for retail game is incorrect.

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We know that Amazon makes over 20% profit so that is a hefty amount extra to throw on for physical releases.

 

I'd say they're throwing that 20% onto the digital versions as well, given they're typically as expensive as the physical - and stay that way longer.

 

Right now they're using the physical edition as the excuse to prop up the digital price tag, but once the physical versions are gone I don't expect a drop. They'll find a new reason easily enough.

 

(Granted as far as consoles are concerned, once it's digital only I'll be completely PC only, if I'm buying games at all at that point.)

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We know that Amazon makes over 20% profit so that is a hefty amount extra to throw on for physical releases. I like both digital and physical but it feels like physical is starting to become a novelty.

 

As far as I'm concerned, physical will only become a novelty when it becomes considerably more expensive than digital. As long as the price is the same, owning physical isn't a novelty, it's just smart.

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Owning physical isn't a novelty, it's just smart.

Spoken like a true vintage video game collector. Of course tell that to the 20 something who is used to instant content at a press of the button, isn't interested in collecting games and doesn't care about revisiting old games. From what I've seen lately, that represents a lot of people these days. In that case, cluttering up your living space with something you don't care about and holding on to something that usually has very little trade in value might not be so smart. Guess it's all in how you look at it.

 

Many people here at AA will agree with you, but remember, the members of a classic video game site aren't like NORMAL people. :spidey:

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Spoken like a true vintage video game collector. Of course tell that to the 20 something who is used to instant content at a press of the button, isn't interested in collecting games and doesn't care about revisiting old games. From what I've seen lately, that represents a lot of people these days. In that case, cluttering up your living space with something you don't care about and holding on to something that usually has very little trade in value might not be so smart. Guess it's all in how you look at it.

 

Many people here at AA will agree with you, but remember, the members of a classic video game site aren't like NORMAL people. :spidey:

 

 

I understand and agree with you, but I still, at the very least, I would think a 20 something would at least want the chance to sell his game back to recoup some money for the next Call of Duty. I realize that at some point, there will probably be system to trading digital games between people (allowing people to get "used" games for less than new), but at this point, physical media has a significantly better resale value than digital. No matter how anyone looks at it, there is absolutely no reason why a digital game should cost the same as a physical game.

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No reason from the consumer's viewpoint. That's right. But hey, if a company can keep the price high while enjoying significant cuts in production cost, why not artificially inflate it? People will suck it up anyways.. And even clamor for more as its heralded as the latest and greatest!

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Saying having a real one isn't about being a collector. I see it enough and I find it seems more intelligence and laziness based. If you're just stupid or lazy and don't care or read the rules to get you're paying full price to lease a game for awhile it's just bad for them and us because that dumb behavior hurts everyone. People who get it that you set the rules and can use it until you're done in a month year decade and then trade r sell it are smart and know. Applies far more away from games into anything even huge buys like cars.

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