"Full game downloads are not imminent" - Pachter
Downloads could account for 50 per cent of games sales by 2019, says new report
Industry observers expecting videogames to follow music and offer full console game downloads in the near future may be in for a long wait - digital sales will only account for around 50 per cent of the market by 2019, according to a report by Wedbush Morgan Securities analyst Michael Pachter.
However, Pachter also estimates the market for videogames will almost double to USD 50 billion, with full download titles accounting for USD 25 billion in ten year's time.
Full game downloads won't become a reality until console hard drives get bigger, the report reasons, since game files can exceed 10Gb in size and the average Xbox 360 only has a 20Gb hard drive, with only a small percentage of consumers owning the Elite version of the console with its 120Gb hard drive.
"In ten years, we envision a world where the typical console has a terabyte or more of storage, and where full game downloads are the norm," the report states.
Furthermore, there will always be consumers that place value on owning a physical copy of a game.
Currently, up to one-third of all games traded in the US are used, which logically indicates that one-third of consumers place some measurable value on the ability to resell a game.
Some consumers will also want the portability a physical disc allows - to take their games to different locations and loan them to friends - predicts the report.
"There will always be a sizeable number of consumers who value the trade-in option and portability, and we expect those consumers to favour physical goods over digital downloads. Thus, we expect that digital downloads will represent less that 50 per cent of total game sales in ten years' time."
While storage capacity remains limited, the download model Pachter expects to see more developers emulate is the 'creeping download' one - or selling games in instalments.
"We think that the poster child for this scenario is Grand Theft Auto IV on the Xbox 360, a game first sold in physical form, with additional levels sold periodically thereafter through downloads. After a tepid embrace of its first downloadable episode, Take-Two decided to offer the first and second episodes in a combined physical package, with the two episodes allowing full game play without the purchase of the original GTA IV game disc.
"This model reinforces our belief that packaged goods will capture the majority of game purchases for the next ten years."