The tipping point for digital in the UK console space is approaching faster than previously expected.
Confidential digital data, shown to GamesIndustry.biz, reveals that the digital-to-physical split on some AAA console games now exceed 45% in the UK.
Last year, the split was estimated at between 15% and 25%, depending on the game.
GfK data, which only counts physical sales, showed that some recent games have sold below their predecessors - titles such as Destiny 2, FIFA 18, Wolfenstein II, The Evil Within 2, Forza Motorsport 7 and Assassin's Creed Origins. However, according to the data shown to us, some of these games were actually up over their previous titles due to the significant increase in downloading.
It's a potential blow to the physical retail market, although one publisher told us that it's the lack of discounting from retailers that may have resulted in this rapid switch.
"UK retailers have been selling new games closer to their RRP, so although digital titles are still quite expensive, they're now closer to their physical counterparts in terms of price," a senior source said. "Some consumers have clearly found that the convenience of digital offsets the now slight premium - whereas before they were paying upwards of £15 more for the privilege, that's not the case this year."
Another publishing boss said: "The challenge retailers face is how they react to this. To protect their revenue, the temptation may be to keep prices high, but this might only cause the digital acceleration to speed up further."
EA's financials this week showed that 36% of their PS4 and Xbox One sales are digital on a global basis, and that includes territories with lower broadband penetration. Last year that number was 30%. The firm says that 25% of FIFA 18's sales have been digital after three weeks, whereas FIFA 17's number was just 16%. Madden's download share is also up 9% to 34% of total sales.
EA believes its games may have a lower download penetration generally, with its sports title being more mainstream and therefore appealing to consumers that perhaps don't use download services.
"We were very pleased and a bit surprised at the strength of digital downloads, both for FIFA and Madden," said CFO Blake J. Jorgensen in EA's latest financial call. "FIFA, in particular, since it's such a global game and sold in many markets where digital is not as strong as it is in some of the more mature markets. So it's great to see the movement towards digital. And we attribute that to some digital-only promotions that we did, some special digital packages, as well as the continued involvement of everyone with Ultimate Team, which is 100% digital, and I think that's driving the adoption."
Meanwhile, the latest UK stats from October show that physical software sales were down 16% compared with the year before. However, early reports state that physical pre-orders for upcoming titles such as Call of Duty: WWII and Star Wars: Battlefront II are strong, and coupled with continued demand for Nintendo Switch and the upcoming Xbox One X, the expectation is that Christmas 2017 may still prove to be a strong one for physical stores.