Digital game sales in US grew 17% during second quarter - NPD

It's still not enough to offset the massive retail declines though

The NPD Group, in advance of their full July retail sales report tomorrow, today announced that the total spent on video game content (in all forms) in the US during the second quarter (April - June) amounted to $2.88 billion. $1 billion was spent on new physical video and PC game software, used and rentals comprised $386 million, and $1.47 billion was fueled by gaming content in digital format (full game and add-on content downloads, subscriptions, mobile games and social network games).

It's encouraging that digital continues to bolster the industry, but so far it's not been enough to completely make up for the huge monthly declines NPD reports for retail sales every month. The July data is likely to reveal yet another substantial drop-off with the exception of perhaps EA Sports' NCAA Football. Earlier today, Cowen and Company forecast that physical game sales in the US would be down 26 percent for all of 2012.

"In the second quarter of this year, sales of content in a digital format have grown 17 percent over Q2 2011," said Anita Frazier, industry analyst, The NPD Group. "While this growth is in stark contrast to the declines in new physical software and hardware sales, the size of digital sales is not quite large enough to offset these declines, leading to an overall drop in consumer spending in Q2 by 16 percent."

NPD also compared some of its findings to the overall market in Europe. The results were similar. The UK, France and Germany generated $243 million from used and rental, while digital format sales in those three countries led to an additional $983 million in sales during Q2 2012.

"While many European acquisition trends in the second quarter of 2012 mirrored those we saw in the U.S. due to seasonality, Europe differed from the U.S. in terms of softer mobile spending, but greater stability in rental trends," added Frazier. "Growth in full-game and add-on content downloads in the second quarter is surprisingly similar as the content behind this increase is suitable to both markets."

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Latest comments (4)

Bruce Everiss Marketing Consultant 9 years ago
And yet still the luddites are in denial.
Quite simply the distribution of video games by physical means is in its death throws. Anyone who still has this space as their business model is in severe trouble as their platform burns from under them.
MCV had a feature on 20 titles that will save Christmas. They won't. This is just grasping at straws.
Digital distribution is just so much better in so many ways for both customers and the industry that the whole idea of physical plastic and cardboard product is laughable. It is only the 7 year old legacy formats of the living room consoles that are keeping it going, and even they are in severe decline.
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Terence Gage Freelance writer 9 years ago
Copy & paste?
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Nicholas Pantazis Senior Editor, VGChartz Ltd9 years ago
It's also worth noting that NPD isn't actually tracking any of these digital services. Sony, Nintendo, Microsoft and Valve don't offer data to them nor most likely do the publishers themselves... EA certainly doesn't seem to anyway. So there are likely not terribly accurate estimates. I mean, it's obvious that digital sales are growing, but by how much? Who can say. Could be much more than this, or much less.

Edit: For that matter they aren't getting data from Apple or Google either, though those can be estimated with greater ease.

Edited 1 times. Last edit by Nicholas Pantazis on 9th August 2012 7:39pm

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Greg Wilcox Creator, Destroy All Fanboys! 9 years ago
And, how many of those games are cheap dollar games as opposed to more expensive purchases most major publishers rely on for that AAA revenue? Until every sector of digital distribution is revealed as the pesky onion it actually is, these figures will always lie to some extent. Retail isn't dead at all - one would be foolish to think so and even more foolish to wish it disappear entirely. Remember, you can't buy a damn thing if you're in an area where the service isn't available or goes out for an extender period of time and that won't ever change.
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