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Retail

Digital sales totaled $1.4 billion in US during Q3 - NPD

Digital sales totaled $1.4 billion in US during Q3 - NPD

Thu 15 Nov 2012 7:21pm GMT / 2:21pm EST / 11:21am PST
RetailOnline

Digital saw sales spike 22% while physical game sales continued to decline

Month after month in the US, The NPD Group sends out its retail data report, revealing abysmal results for the physical games business. As we all know, that's only about half the story these days, and now NPD has issued its Q3 2012 Games Market Dynamics: U.S. report, which shows that digital accounted for $1.4 billion in sales during the third quarter (July-September).

Consumers spent $1.07 billion in the US on new physical video and PC game software and another $399 million on used games and rentals. Importantly, though, the $1.4 billion spent on digital content (full game and add-on content downloads, subscriptions, mobile games and social network games) brought the overall consumer spend for Q3 to $2.87 billion.

“When including overall consumer content spending across both digital and physical formats in Q3 2012, there was a positive story for the industry,” said Liam Callahan, industry analyst, The NPD Group. “Despite declines in physical format spending of 16 percent from Q3 2011, strong growth in digital format spending, up 22 percent, helped offset this decline and led to 1 percent decline in content spending from the same quarter last year. Mobile App spending, digital full game downloads, and downloadable add-on content were the areas within digital format spending that helped drive this increase.”

10 Comments

Daniel Hughes Studying PhD Literary Modernism, Bangor University

436 496 1.1
Hooray! Finally they make these figures available. It'd be good to see more detailed, month by month breakdowns in future.

Posted:2 years ago

#1

Tamir Ibrahim Programmer, Rodeo Games

76 56 0.7
Hmm, they mention numbers but they don't mention how they got these numbers. I'm still dubious as to how accurate they are.

Posted:2 years ago

#2

Rolf Moren Freelance Marketing Consultant

36 22 0.6
I would love to see what is included in these numbers. What we do know is that Steam, Origin, Nintendo, Apple, Sony, Microsoft wont give their actual numbers. So...where the hell do they get these numbers?

Posted:2 years ago

#3

John Bye Senior Game Designer, Future Games of London

484 456 0.9
Pretty sure these are broad estimates, as most of the big players don't release numbers AFAIK.

Posted:2 years ago

#4

Nicholas Pantazis Senior Editor, VGChartz Ltd

1,020 1,467 1.4
Exactly. This is a very broad estimation they're making by tracking user data on those services. They are getting no sales information from 95% of the digital market. They aren't getting it from the publishers either, as all publishers have an NDA that they sign with those services to not disclose sales.

Posted:2 years ago

#5

Morville O'Driscoll Blogger & Critic

1,613 1,475 0.9
@ Nicholas

Kind of... As far as I know, Valve does allow publishers and developers to release sales figures if they so wish. This is why Unknown Worlds went "W00t! Look at our Natural Selection 2 sales" last week. Other devs and publishers have done this too, but it's mostly smaller companies. Possibly because Valve have a boiler-plate contract for the larger ones? Though that seems unlikely.

Edited 1 times. Last edit by Morville O'Driscoll on 16th November 2012 11:22pm

Posted:2 years ago

#6

Nicholas Pantazis Senior Editor, VGChartz Ltd

1,020 1,467 1.4
@ Morville they can release some general sales info with Valve approval but it's a well known policy that disclosing exact sales or providing them to a third party is expressly forbidden.

Posted:2 years ago

#7

Peter Dwyer Games Designer/Developer

482 293 0.6
Is this actually true. Every digital version of a console game I saw on both Sony and Microsoft's platforms was more than the equivalent physical copy by some margin in many cases.

I find it hard to believe that anyone saw those prices and still hit purchase! So what do these sales figures relate to? Is it the steam like services? In which case that would equate to a rise in PC game sales surely.

Posted:2 years ago

#8

John Bye Senior Game Designer, Future Games of London

484 456 0.9
@Peter - Microsoft actually have a definite policy of releasing games late and at a stupidly high price point on Games on Demand, it was mentioned in an article a while back, when they were trying to justify Skyrim's release on the service.
"We don't do Games on Demand on day one, we focus on boxed retail for day one... We release a game roughly six months after it arrives at retail at full ERP. That's our model and we'll be sticking to that. It's a successful model, so why change something you don't need to?"
God knows how that's a successful model. Are people really stupid enough to pay full price for a game six months after release, when it's probably discounted to half price or less in store and online by then? Although to be fair, I think retail and online pricing isn't as competitive in some countries as it is in the UK, so maybe overseas that's not as outrageous as it seems here. But it's hard to believe there's a big market of people willing to wait six months to play a game and then pay well over the odds for it.

On PSN, launch prices are almost always ridiculously high too (I've seen games selling at over £50) compared to UK retail and online stores, but at least they release digitally the same day as retail (like Nintendo), and they've even started introducing digital pre-orders recently.

Older catalogue titles on PSN are often quite reasonably priced though, around the £15-20 mark, similar to UK retail. I've bought a couple of games like that. But prices are set by the publisher, and some publishers try to keep their prices unreasonably high way past the sell by date of the game.

Take Prototype, for example - new IP, modestly successful at launch, free one hour trial on PS Plus to draw new players in, sequel about to launch (at the time I played the trial). Full game upgrade price? £40. In store price? Under £20. That's one sale Activision lost on both the original game and the sequel. The trial was fun enough that if it had been reasonably cheap to unlock the full game I would have done so on the spot, but I wasn't so desperate to play it I was going to go out to a store and buy a physical copy or order one online and wait a couple of days for it to arrive.

By comparison, I quite enjoyed the free one hour trial for Red Faction Guerilla and THQ were selling the full game unlock for about £15 at the time, so as soon as the trial ended I bought the full game and played it for several hours more. If they'd released another Red Faction game in the same style I would have bought that too, but unfortunately they don't seem to know what to do with the franchise and keep changing the gameplay with each new entry.

Edited 1 times. Last edit by John Bye on 19th November 2012 10:14am

Posted:2 years ago

#9

Tom Keresztes Programmer

692 348 0.5
Hmm, they mention numbers but they don't mention how they got these numbers. I'm still dubious as to how accurate they are.
In other words, they are guessing.

Posted:2 years ago

#10

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