For console games, downloads are approaching a tipping point


On the PC, video games distributed on discs in bodily packing containers have been a sensible market rounding error for years now. Destiny 2‘s gross sales distribution highlights how the console sport market might lastly (and inexorably) be heading towards that time as nicely.

In an earnings name this week, Activision revealed that greater than 50 p.c of Destiny 2‘s gross sales on consoles got here by way of obtain slightly than on a retail disc. That’s “a new highwater mark” for the corporate, and it is means greater than the “20 to 25 percent” of Call of Duty‘s console gross sales normally represented by digital copies, in accordance with Activision (although Call of Duty World War II is seeing “greater digital preorders… relative to any prior Call of Duty title.”) Even for online-focused video games just like the Overwatch and the unique Destiny, solely 30 to 40 p.c of console gross sales normally come from downloads, the corporate mentioned.

More importantly, Activision would not see Destiny 2‘s digital console majority as an outlier. As Activision CFO Spencer Neumann mentioned within the earnings name, “historically, we’ve been seeing that digital mix increase at about five points a year.” With Destiny 2‘s console digital majority, Neumann says, “we believe we’re seeing some acceleration in that digital shift.”

It’s that acceleration that would rapidly push the console market over a digital tipping level, and Activision is not alone in noting the pace of the console market’s digital shift. Earlier this 12 months, EA mentioned it expects 40 p.c of its console sport gross sales to return from downloads in 2017. That’s an enormous soar from 30 p.c of gross sales in 2016, and an enormous step towards EA’s long-stated expectation that it’s “going to be a 100 percent digital company, period. It’s going to be there some day. It’s inevitable.”

Across the worldwide console sport market, gross sales of digital console video games had been up 25 p.c in September in comparison with the 12 months earlier than, in accordance with SuperData, thanks largely to Destiny 2. And within the UK, information exhibits that digital gross sales now account for a 30 to 45 p.c share of console sport gross sales in comparison with a 20 to 25 p.c proportion the 12 months earlier than.

Projecting these traits out, it is not exhausting to examine 60 to 70 p.c (or extra) of all gross sales for main console video games coming from downloads by 2021, when Sony and Microsoft will most likely be enthusiastic about releasing new consoles. That’s most likely not sufficient to permit these consoles to go fully freed from the usual disc drive, nevertheless it may push console-makers to supply cheaper, disc-free variations as an choice. Even gamers that do not wish to surrender the flexibility to purchase and promote used video games could be satisfied to surrender discs in trade for a closely lowered worth on the itself. And console makers may make up that lowered worth by eliminating bodily video games’ manufacturing prices and retailer income cuts.

One factor’s for positive: these traits could possibly be a significant downside for retailers like GameStop, which already deliberate to shut two to a few p.c of its 1000’s of storefronts this 12 months after closely lowered retail gross sales. Maybe the PSP Go was simply forward of its time.

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